One of the main reasons we all get to know and love cryptocurrencies is because of their underlying technology, blockchain. Primarily, our thoughts hit on a decentralized system where we have control of our own funds and are protected by our data.
However, unlike what many people think, it does not have many ways to protect users' privacy. While blockchain has become a promising innovation, we need additional security standards for maintaining security in transactions. In such circumstances, Zero Knowledge Proof or ZKP is a good option.
Analogy: If a user purchases something from someone with his wallet address, his wallet address is now known by that someone. That someone will know everything the user did in the past and the future, including what else he bought or how much he has.
This creates a privacy concern where we are still sharing way more information than is needed. The leading solution in such circumstances comes as zero-knowledge proof. What is it?
What is Zero-Knowledge Proof?
Zero-knowledge proofs use encryption to prove something is true without revealing more than necessary, significantly improving privacy. It uses an algorithm that accepts certain data as input and produces "true" or "false" as output.
This way, it can reveal necessary information without revealing anything else. This, in turn, dramatically improves the privacy aspect of blockchain even further.
Types of Zero-Knowledge Proof
There are two fundamental types of ZKPs:
Interactive ZKP- The actions associated with the concepts deal with mathematical probability. In interactive ZKP, a prover needs to convince a specific verifier and repeat this process for each verifier. In interactive ZKPs, the prover must complete a series of actions to convince the verifier about a specific fact.
Non-interactive ZKP- Non-interactive ZKPs don't have any voluntary interaction between the verifier and the prover. In non-interactive ZKP, a prover creates proof that anyone can verify, and the verification process can also be moved to a later stage. For a better mechanism of non-interactive ZKPs, they need specific software.
Zero-Knowledge Proof Use Cases
Acts as a messenger on a blockchain.
Acts as a next-gen file system control
It protects storage
It can be used to transfer private blockchain transactions
Used for data security
Applications of Zero-Knowledge Proof
Apart from some blockchains such as ZCash, ZKPs are also used in private transactions that do not reveal financial data and receiver and sender information. The decentralized Oracle networks that provide intelligent contracts for off-chain data can also leverage ZKPs for some facts about off-chain data without exposing on-chain information.
Final Thoughts
Looking into the future, ZK technology is something people will look up to. While the initial wave from a new narrative won't always stay strong forever, we will see the market moving forward in favor of altcoins using or adopting this technology.
By leveraging the latest-generation ZKP, you can benefit hugely without spending a lot of money.
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