By Jinghui Liao, Core Developer, Neo
When it comes to our own personal information, such as banking data or health records, there’s no question; we expect privacy. Conversations around blockchain privacy are gaining traction. While transparency remains one of blockchain’s enshrined doctrines, whereby all information should be open-source and readily available, the question of privacy for both the individual and institutions must be addressed before we see mass adoption.
However, demonstrating proof while maintaining privacy is not always a simple task. Fortunately, Zero-Knowledge Proof (ZKP) has demonstrated significant utility for the blockchain space and is rapidly garnering interest across the sector, with many inherent advantages for the ecosystem.
Fundamentally, the ZKP system is a method by which one party (the ‘prover’) can prove to another party (the ‘verifier’) that a given statement is true, while the ‘prover’ avoids conveying any additional information. To use a scenario from everyday life, if you had to prove that a lost phone is indeed yours, you could provide proof of ownership through unlocking the phone with Face ID. During this process, you would not disclose any password or other information to the finder, thereby using a straightforward ZKP.
While the example above showcases a simple example, we can look at how it applies to specific cases within the blockchain:
Privacy protection
In traditional blockchain transactions, participants’ information is publicly accessible. All transactions are recorded in a public account book, which could lead to privacy or security risks. Securing participants’ privacy, therefore, requires completing transactions in a way that doesn’t reveal their personal IDs.
ZKPs provide a solution by proving transactions without needing to publish any sensitive information on the blockchain, enabling secure and anonymous transactions when needed. Several types of ZKPs can enable authentication without disclosing sensitive information, with the ultimate result being a higher level of privacy and security. For example, a zk-SNARK obscures transaction amounts to protect the user’s privacy and make it impossible to link certain transactions to individual users.
ID authentication
When online, users must often provide personal information such as their name, address, phone number, etc. to verify their identity, which risks compromising their privacy. As an alternative, ZKPs allow users to verify their identity without disclosing any sensitive information.
An example is the non-profit ID2020, which is dedicated to offering digital identities for those without access to ID cards and may be encountering difficulties accessing basic rights and services as a result. ID2020 utilizes ZKP technology to allow people verify their identity anonymously, without the need to provide any sensitive information such as their name, address, etc.
Safeguarding sensitive information
For corporations and businesses, sharing sensitive information could have catastrophic effects. However, ZKPs can help safeguard against this.
For example, a company can use ZKPs to prove it reached a required sales threshold to a supplier or investors, without disclosing specific (confidential) figures involved. This ‘anonymous information’ sharing has a wide range of applications across supply chain management, medical records sharing, insurance claims and many more.
Another use case is for data verification, whereby some blockchain applications may set a certain threshold for transactions for users and, to continue using these platforms, users must prove they own specific data points that are private to them.
ZKPs allow users verify whether a certain data point satisfies a certain condition. For example, a user may have to prove they own a certain amount of cryptocurrency, and ZKPs allow them to do this without requiring the user to disclose the actual amount.
Asset ownership
This can also be extended to copyright protection, whereby owners of digital assets such as music, videos or software can prove ownership without publicizing detailed information about those assets, thereby safeguarding against piracy or infringement of intellectual property rights.
As an example, Verisart is a blockchain-based digital artwork authentication platform that uses ZKPs to prove ownership of digital artwork. When an artist uploads their art, Verisart uses ZKP technology to generate a mathematical proof showing ownership, without disclosing any sensitive information.
E-voting
In the traditional voting procedure, votes are cast publicly whereby participants place paper votes in a sealed box. While this maintains a certain amount of privacy, voters’ choices can be influenced and the system is not suitable for long-distance voting.
ZKPs are widely utilized for those casting votes across Decentralized Autonomous Organizations (DAOs), and could also be utilized in places where voters feel under threat or influenced to vote a certain way. Essentially, ZKPs ensure that voters can prove their ballots are valid without requiring them to reveal their identities, while also safeguarding against voters acting maliciously (through trying to sell ballots, voting multiple times, etc.).
In summary, ZKP technology is an important, privacy-preserving technology that can prove the correctness of a fact without revealing the information on which the proof relies. In blockchain, ZKP technology has a plethora of uses across privacy protection, identity authentication and ensuring the safe sharing of information. In all these use cases, and with many more applications, ZKPs can help ensure privacy and security of users while facilitating the development of blockchain technology across an ever-expanding range of scenarios.
ZKPs ensure privacy for users when privacy is required. And, when privacy is required, we expect it.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.