Zero-knowledge Proof

Publication Date :

26 Jan, 2025

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Table Of Contents

What Is Zero-Knowledge Proof?

Zero-knowledge proof in cryptography refers to a method where one party (the prover) can prove to another party (the verifier) that they possess certain knowledge without disclosing the details. It is a cryptographic protocol that ensures privacy and security while validating information in authentication systems.

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ZKPs enable secure financial data verification without revealing sensitive transaction details, making them suitable for applications like online economies. They enhance privacy, security, and regulatory compliance, helping to bridge the gap between traditional finance and decentralized finance (DeFi) technologies. By integrating ZKPs, financial institutions can protect client information while adhering to regulations like anti-money laundering (AML) and know-your-customer (KYC).

Key Takeaways

Zero-knowledge proof (ZKP) is an encryption method in cryptography that enables the verification of a message's contents without revealing any information about it.
ZKPs were first introduced in 1985 by researchers Shafi Goldwasser and Silvio Micali at MIT (Massachusetts Institute of Technology).
Popular types of ZKPs include zk-SNARKs, zk-STARKs, and Bulletproofs
While ZKPs are highly confidential and compatible with popular blockchains like Zerocoin, Zcash, and Monero, they do require high computational costs and resources.

Zero-Knowledge Proof Explained

Zero-knowledge proof is a concept in cryptography that allows one party (the prover) to prove that they possess knowledge about an item or transaction without revealing the underlying information. It has significant use cases in smart contracts that represent proof of ownership. Additionally, it helps convince another party that the prover knows about an event without sharing the inner details. Some popular cryptocurrencies implementing zero-knowledge proofs include Monero, Zcash, and WorldCoin. However, the mechanisms of this protocol vary by type.

The use cases of zero-knowledge proofs in blockchain are widely popular. In 1985, the first mention of ZKPs appeared in an MIT paper by computer scientists Shafi Goldwasser and Silvio Micali titled "The Knowledge Complexity of Interactive Proof Systems." This work established a framework for proving knowledge without disclosing the underlying information.

The working of zero-knowledge proofs in cryptography involves a prover and a verifier. At a certain point, the verifier asks the prover to perform a set of actions to confirm that they know the piece of knowledge. If the prover performs accurately, the verifier acknowledges their knowledge. However, if the prover is making random guesses, the verifier will eventually catch them with a high-level probability test. One popular method of explaining this concept was proposed by Jean-Jacques Quisquater and others in their paper "How to Explain Zero-Knowledge Protocols to Your Children" in 1990. This paper described methods for explaining the concept to children with no interest in cryptography.

There are three major properties of ZKPs for a statement. Let us look at them:

Completeness: Completeness refers to the assurance that if the statement is true, the honest verifier will be convinced that the honest prover knows the correct input.
Soundness: The proof systems are designed to be free from cheating. If the statement is false, no prover can convince the honest verifier.
Zero-Knowledge: This is the protocol's most fundamental characteristic. If the statement is true, then the verifier learns nothing about the prover apart from the statement itself.

Types

The two primary forms of Zero-Knowledge Proofs (ZKPs) are:

Interactive ZKP: Interactive ZKPs require several exchanges of messages between the prover and the verifier (i.e., two-way communication).
Non-Interactive ZKP: Non-interactive ZKPs consist of a single communication round, allowing the prover to send one message to the verifier without needing both parties to be online simultaneously.

Some other types are:

zk-SNARKs: zk-SNARKs (short for "succinct non-interactive argument of knowledge") are smaller, making the process gas-efficient. This protocol uses elliptic curves to generate proofs but requires a complex setup with high computational requirements.
zk-STARKs: As the name implies, "scalable transparent argument of knowledge," zk-STARKs are more scalable and consume less time than zk-SNARKs. With minimal interaction among parties, the proof of knowledge is much faster than that of zk-SNARKs.
Bulletproofs: Bulletproofs require no formal setup and enable private transactions, particularly for cryptocurrencies. They use advanced mathematical concepts, resulting in smaller proof sizes, reduced transaction sizes, and faster verification times.

Examples

Let us look at some examples to comprehend and understand the use cases of zero-knowledge proof in blockchain:

Example #1

IBM Food Trust is a real-world application of Zero-Knowledge Proofs (ZKPs) within the blockchain framework. It is a blockchain platform that enhances transparency in the food supply chain. It helps everyone involved in food production, from farmers to retailers, verify that food products are safe and authentic. By utilizing ZKPs, IBM Food Trust allows stakeholders to confirm the authenticity and safety of food products without revealing sensitive information about suppliers and production processes. This ensures that while the system verifies that food is safe and genuine, it also protects the confidentiality of the underlying data, which is a key benefit of using ZKPs.

Example #2

According to a news article dated September 2024, the Aleo blockchain launched its mainnet (Aleo Network), featuring general-purpose programmability with the inclusive power of ZKPs. This will allow users to achieve new level of security and control over their data. Additionally, it is expected to bring a fundamental shift in how users interact with their data online, including personal documents such as birth certificates, health records, financial data, and more.

Advantages And Disadvantages

Zero-knowledge proof blockchain protocols offer advantages and disadvantages for users interacting in the blockchain space. Some of the key points are:

Advantages

No involvement of a complex encryption method.
Highly secure due to the non-revelation of the statement.
Compact and scalable proofs without compromising decentralization or security.
Users have empowered control over their data stored online.
Enhanced information security by eliminating inefficient and insecure authentication methods.

Disadvantages

ZKPs involve high computational costs and complex calculations.
Gas fees for verifying a zk-SNARK proof can run up to 50,000 gas in some blockchains.
Advancements in quantum computing pose potential threats to security models.

Zero Knowledge Proof vs Digital Signature

ZKPs and digital signatures are fundamental in cryptography but have distinct characteristics. Let us look at them:

	Zero Knowledge Proof	Digital Signature
1. Meaning	The prover proves knowledge of a piece of information to the verifier without revealing it.	The prover proves knowledge of a piece of information to the verifier without revealing it.
2. Data revealed	There is no revelation of the contents of the secret.	There is no revelation of the contents of the secret.
3. Security	It is highly secure as details remain confidential.	It is highly secure as details remain confidential.
4. Interaction	The prover and verifier must interact with each other.	The prover and verifier must interact with each other.
5. Applications	Used in privacy-focused cryptocurrencies like Monero, Zcash, and Zerocoin.	Used in privacy-focused cryptocurrencies like Monero, Zcash, and Zerocoin.