Investment in the ZK field exceeded $400 million in 2023, with a focus on Ethereum’s L1/L2 scalability and emerging ZK developer infrastructure, according to data from Messari. While ZK technology is relatively new, its rapidly developing ecosystem is expected to integrate best practices to achieve more secure, private, and scalable blockchain applications.
In this article, we will explore the significant impact of zero-knowledge proofs (ZKPs) on the Web3 space, as emphasized by Vitalik Buterin, the founder of Ethereum.
So, what exactly are zero-knowledge proofs? They are a cryptographic technique that allows one party (the prover) to prove the validity of a statement to another party (the verifier) without revealing any underlying data used in the computation. ZKPs originated in 1985 and have evolved from theory to practical application with the latest advancements in software tools and hardware.
A classic example of a zero-knowledge proof is the game “Where’s Waldo?” The prover knows the location of Waldo in the picture but doesn’t want to disclose the exact position. They can use an overlay that blocks most of the image, revealing only the block that covers Waldo, to prove that they know where Waldo is without revealing his specific location. This is a zero-knowledge proof as the prover proves a fact (knowing Waldo’s location) without revealing any other information.
In summary, zero-knowledge proofs allow one party (the prover) to prove the truth of a statement to another party (the verifier) without revealing any additional information beyond the truth of that statement. It’s like saying, “I know, but I won’t tell you exactly what it is.” For example, if you need to prove your age for purchasing alcohol without revealing your specific date of birth or other personal information, zero-knowledge proofs can assist you with this technology.
Now let’s delve into the three positive impacts of zero-knowledge proofs on blockchain, as highlighted by Vitalik Buterin: privacy, scalability, and trust interoperability.
Firstly, zero-knowledge proofs enhance privacy protection in blockchain. While blockchain is transparent, allowing anyone to view transaction details, this transparency can lead to privacy concerns. Zero-knowledge proofs play a crucial role here by allowing users to prove that they have followed certain rules (e.g., paid enough funds) without revealing the specific details of the transactions. This enhances user privacy by hiding their identity and the specific content of their transactions.
Secondly, zero-knowledge proofs contribute to the scalability of blockchain. As more transactions and complex smart contracts are loaded onto the blockchain, processing speed slows down, and transaction costs increase. The succinctness of zero-knowledge proofs is beneficial in this regard. Even for complex statements, the required proofs can be concise and efficient. This is particularly important in resource-constrained environments like blockchain, as it allows for complex verification without consuming a significant amount of network resources. This feature is highly effective in reducing transaction data size and improving system throughput.
Zero-knowledge proofs address scalability challenges through the following approaches:
1. ZK Rollups: This Layer 2 solution aggregates multiple transactions into a single transaction, reducing the data burden on the blockchain and increasing throughput while maintaining privacy and reducing transaction costs.
2. ZK-SNARKs in smart contracts: Zero-knowledge proofs can be used to prove that certain conditions have been met in smart contracts without revealing the specific data that satisfies those conditions. This reduces the burden on the blockchain while maintaining the integrity and security of contract logic.
Thirdly, zero-knowledge proofs enable trust interoperability in blockchain. Current blockchain interoperability protocols rely on trusted systems, such as multisignature or incentive validators. ZKPs can replace cryptographic economic trust assumptions with cryptographic proofs, paving the way for more secure and robust cross-chain communication. Interoperability is one of the emerging areas in the main applications of ZKPs.
Zero-knowledge proofs have a wide range of applications. Some examples include privacy-protecting payment systems like Zcash, where users can conduct encrypted cryptocurrency transactions without revealing transaction details, and identity verification, where users can prove certain qualifications or attributes without disclosing specific identity information. Zero-knowledge proofs can also be used in smart contracts to prove that certain conditions have been met without revealing specific data, and in compliance verification, allowing companies to prove compliance with certain rules or standards without disclosing business secrets.
The demand for generating zero-knowledge proofs lies in the need for significant computational power. This high computational demand creates challenges and opportunities for companies that can efficiently provide these computational services. Proof Markets and Proof Networks are two different models for generating zero-knowledge proofs. Proof Markets offer flexibility and cost-effectiveness, allowing broader participation in proof generation. Proof Networks, on the other hand, provide a smoother and more developer-friendly experience through internal servers.
As ZK applications like ZK Coprocessors, ZK Attestation, ZKML, and ZK Bridges emerge, the demand for generating zero-knowledge proofs continues to grow. The diversity and growth rate of these applications indicate that ZK technology is expanding into broader domains, further driving the demand for proof generation capabilities.
Although the ZK ecosystem is still in its early stages, its rapid development promises to usher in a new era of secure, private, and scalable blockchain solutions. The future of ZK involves novel zero-knowledge proof designs prioritizing speed, reduced hardware requirements, improved developer tools, and decentralized proof generation support. The fusion of optimistic and ZK scalability solutions is expected in the medium to long term, adapting to a diverse range of on-chain applications.
While the ZK application layer is currently in its infancy, it may continue to grow as end-users increasingly demand privacy protection on public blockchains. Emerging concepts like Solana’s Token 22 program with Confidential Transfers, which utilizes ZKP for privacy features in token balance and SPL token transfer amounts, demonstrate the adaptability and potential of ZK beyond the Ethereum ecosystem.
The transformative potential of zero-knowledge proofs is becoming evident, promising enhanced security, privacy, and scalability of blockchain solutions. As the infrastructure in the ZK field develops, we will unlock more forms of on-chain applications.
Note: The viewpoints expressed in this article do not represent the stance of “WEB3+.”
Proofreading Editor: Gao Jingyuan
