The code word is ZKP 🆔 ✅
The code word is ZKP 🆔 ✅
Zero-knowledge Proof can be a game changer for a number of sectors by providing a safe and efficient way to verify information, without compromising privacy and security. What's the catch then?
Hello, y'all. This is The Rabbit Hole. How can nothing be something, anything? Whatever. Who the hell invented Zero? We appreciate it being added after them non-zero numbers in our portfolio.
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Big companies hoard our personal info like it's going out of style. Magpies of the internet, collecting shiny bits of our personal information to add to their hoard. Companies benefit from this data in two ways: by using it to optimise their services to better appeal to you and to re-sell it to other companies. How can we put people back in control of their data?
I have zero knowledge … lemme explain
Zero-knowledge proofs are like a magician's trick for online secrets. Without revealing the information, one can prove that they know something. It's like saying, "I have a secret, but I can't tell you what it is!" and still being able to prove you're not bluffing. It's like showing your ID to a bouncer without them seeing your embarrassing high school photo.
ZKPs are a way of verifying someone's identity without revealing personal information. Essentially, it's a way of proving who you are without giving up any of your private information. This is especially useful in online security and banking because it means that your data can be kept safe while verifying that you are who you say you are.
They, therefore, have the potential to revolutionise the way data is collected, used and transacted with. Each transaction has a ‘verifier’ and a ‘prover’, and the prover attempts to prove something to the verifier without telling the verifier anything else about that thing.
Three important components
1. Completeness: it should convince the verifier that the prover knows what they say they know
2. Soundness: it should not convince the verifier that the prover’s information is true
3. Zero-knowledge-ness: it should reveal nothing else to the verifier
Types of ZKPs
Interactive - An interactive zero-knowledge proof involves steady communication between prover and verifier until the former can provide convincing replies to the latter's challenges.
Non-interactive - Non-interactive zero-knowledge proofs require only one information exchange, they demand more computing power to produce than interactive zero-knowledge proofs.
Convenience makes non-interactive zero-knowledge proofs popular.
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The use case for ZKPs
Decentralised identity
Identity verification exercises are common. You need KYC everywhere. The ID verification exercises are slow, and the document submission process raises concerns about data safety.
Through decentralised identifiers built on zero-knowledge proofs and the blockchain, you can store identification documents and materials and decide how much you are willing to share with third parties. Zero-knowledge identity proofs allow you to pass KYC verification just once and then be able to indefinitely confirm that you meet requirements without revealing your personal information.
You retain control over your data and also address the growing concerns around data privacy and security.
Polygon, a leading Ethereum L2 scaling solution, has launched a zero-knowledge, privacy-enhanced identification product called Polygon ID. The product aims to provide users with a secure and private way to verify their identity without compromising their personal information. The product is expected to be useful in various industries, including finance, healthcare, and e-commerce, where identity verification is crucial.
Blockchain scaling
Scalability is a huge challenge for blockchain technology, especially as more people begin using the network. Network congestion often results in increased transaction fees, making it difficult for the mass adoption of Web3 protocols. Zero-knowledge proofs can help solve the scalability problem on blockchain networks such as the Ethereum mainnet through rollups.
Zero-knowledge rollups (ZK-rollups) are Layer-2 scaling solutions that increase throughput on the Ethereum Mainnet. By completing computations and state-storage off-chain, ZK-rollups help Layer-1 blockchains process more transactions at reduced fees. It usually batch-process several thousands of transactions. As most permissionless blockchains require proof of transactions for every on-chain action, ZK-rollups only post minimal summary data on-chain. In this summary data, the ZK-rollup defines the changes that should be made to the blockchain and provides zero-knowledge proof that the changes are correct.
Privacy protocols
Users can currently transact on privacy-enabled blockchains and post proofs that confirm that their transactions are valid, but nothing more.
Zcash, uses zk-SNARK cryptography to restore blockchain anonymity for its users and give them control over their transaction information.
Panther, a ZK-SNARK-powered ecosystem in which users can retain full control over their data while being able to use DeFi with default privacy.
The bear case for ZKPs
ZKPs can protect your identity when you interact with certain blockchain services. But when you use these proofs on a public blockchain, they become public, which defeats their purpose. To avoid this, one needs to use these proofs only when required, and both parties need to reveal their proofs proactively. If the proof changes, one must produce a new one for every interaction.
While newer innovation in the space solves for the wallet to stay hidden when using zero-knowledge smart contracts. But, there are still problems with updating info and peer-to-peer transactions between verified users.
According to FS Insight, the anonymous nature of ZK technology could attract the attention of regulators and law enforcement, who want to stop illegal activities like money laundering. Tornado Cash, which uses ZK technology, has already been targeted by regulators. The report suggests that regulators may use anti-money laundering and know-your-customer measures to ensure that ZK technology transactions are legal
What’s ZKPs future?
Zero-Knowledge Proofs have immense potential, there is no doubt about it. It can put people back in control of their data. Allow verifying only certain attributes of the data without revealing the data itself. This will have an enormous impact on finance, healthcare and other industries by enabling transactions while safeguarding data privacy.
TTD Week That Was 📆
All Banks vs Bitcoin. That was what the week was about.
Saturday: Once there were banks ... 🏦 🧨
Friday: Bitcoin's moment in the sun ☀️
Thursday: All rise for AI ✊ 🫵
Wednesday: Meta 💔 NFTs. Cathie ❤️🩹 Coin. Banks 🆘
Tuesday: Banking crisis not crypto’s fault 🧘🏾🆗
Monday: RIP Signature Bank. Crypto gone bankless? 🙅♀️
TTD Week In Funding 💰
DressX $15 Million. Improve the DressX app and build NFT marketplace to become the main provider of digital fashion in the metaverse.
Jungle $6 Million. Build new web3 games. Starting with the mobile shooter that allows players to sell the items they find in the game as NFTs.
Soul Wallet $3 Million. Online, self-custodial Ethereum wallet built on top of ERC-4337.
CNHC $10 Million. Pegged 1:1 with the offshore yuan (CNH) to differentiate it from China’s onshore yuan (CNY).
Entree $1.6 Million. Professional networking platform providing a community-focused alternative to existing professional networking apps.
GigaStar $4.6 Million. Blockchain-based creator platform to create fan engagement, fan funding, and access to royalties for YouTube creators.
Orbs $10 Million. An open, decentralised and public blockchain infrastructure using Proof-of-Stake (PoS).
Smooth Labs $2 Million. A high-performance module that enhances the transactions per second or TPS of Layer 2 networks.
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with big web2 players making a play for web3 we are looking potential of zkps being accepted more and more. yet, it's in sync with most of the web2 compmany functioning and priorities. the push, eventualy, will come from the users ...
if implemented for all the existing systems and functioning - this could be huge. finally we will have control over our data