Zero-Knowledge Proof

Understanding Zero-Knowledge Proofs

Zero-Knowledge Proof (ZKP), also known as Zero-Knowledge Password Proof, is an authentication method that ensures the security of private chats and transactions without the need to share passwords, making them extremely difficult to steal. By utilizing Zero-Knowledge Proofs (ZKPs), information can be verified without being revealed to unauthorized parties. This has the potential to revolutionize the acquisition, utilization, and trading of data.

A blockchain is a collection of records managed by multiple distributed parties, each having a copy of the list. However, blockchains lack privacy and anonymity as all participants can observe all transactions.

Zero-knowledge proofs address this issue by allowing private transactions to be posted on the blockchain while maintaining their confidentiality. They provide a way to confirm the successful completion of a transaction without disclosing the sensitive information involved.

In essence, ZKPs enable one party to demonstrate their knowledge of a specific value without revealing any additional information. This solves the fundamental problem of security and privacy in the blockchain realm. Many multinational companies adopt ZKPs to protect their confidentiality and facilitate secure transactions on the blockchain network.

Application code is executed off-chain or by a specific node on the blockchain network, with only the confirmation of its proper execution sent to the blockchain for verification. Zero-knowledge proofs also enable the sending of private messages without disclosing the user’s identity to the server. Unlike traditional messaging applications, software based on the ZKP protocol allows users to keep their personal information private, sharing only necessary data with the intended recipient.

There are two primary types of zero-knowledge proofs: interactive and non-interactive. Interactive ZKPs require the prover to perform a series of actions to convince the verifier of their knowledge. These actions often involve mathematical principles of probability. Non-interactive ZKPs, on the other hand, do not require interaction between the prover and the verifier and allow for verification to be completed at a later stage. However, these ZKPs require additional computers or software.

By integrating ZKPs with blockchain technology, users can securely communicate complex documents. The unique feature is the ability to encrypt data in chunks, granting access to specific blocks and their contents to selected users while restricting others.

ZKPs have found significant application in Z-Cash, a cryptocurrency that enables confidential transactions. The AdEx Network also utilizes decentralized ZKP ad auctions, allowing users to bid on ad display costs without revealing the amount to other participants.