Introduction

Users in the blockchain and cryptocurrency space are increasingly turning to Zero-Knowledge Proof (ZKP) technologies to address pressing concerns around privacy, security, and efficiency within digital transactions and interactions.

In 2023, Vitalik conducted a series of studies on privacy protection and the advancement of Zero-Knowledge and privacy protection. In the first half of 2023, Vitalik posted three articles on his website dedicated to Zero-Knowledge and privacy protection, and in April, he presented a study on Reddit on the issue of wallet guardian privacy. In September, he co-authored a paper proposing a solution for balancing privacy with compliance.

This trend is driven by a diverse user base seeking to maintain transaction confidentiality against the backdrop of public ledger transparency, comply with evolving regulatory demands without sacrificing privacy, enhance security measures to prevent data exposure, and tackle scalability challenges by reducing blockchain's data processing load. Initially propelled by developers and technology enthusiasts recognizing its transformative potential, ZKP's adoption now spans a wide array of stakeholders, including enterprises, privacy-conscious individuals, and financial institutions. For example, in less than a year since zkMe launched, which has already provided decentralized identity verification for more than 330,000 users.

What is Zero-Knowledge Proof?

Zero-Knowledge Proof (ZKP) protocols are cryptographic methods enabling a party (known as the prover) to prove the accuracy of a claim to another party (the verifier) without disclosing any extra details. ZKPs are instrumental in boosting privacy and security across multiple platforms, notably in verifying digital identities on blockchain systems. These protocols are divided into two primary types: interactive and non-interactive.

Interactive ZKP (Inter-ZKP): In an interactive ZKP, the prover and the verifier engage in an iterative exchange protocol to establish the validity of the statement. During each iteration, the prover aims to convince the verifier of the statement’s truth without disclosing sensitive information. The interactive nature of Inter-ZKP involves challenge–response requests, leading to multiple rounds of interaction.

Example:
Imagine that Alice is a magician who claims that she can differentiate between red and green hats in complete darkness. Bob wants to verify this claim but doesn’t want Alice to simply tell him the answer because that would ruin the magic.
So, you play a little game:

1. Challenge: Bob picks two hats, one red and one green, in another room and brings them into a dark room.
2. Response: Alice goes into the room, uses her"magic" to determine which is red and which is green, and then hands one hat back to Bob.

Verification: Bob takes the hat back into the lighted room to check if you were correct.
After repeating this game several times, if Alice consistently identifies the hats correctly, Bob becomes more convinced of your ability, all without ever learning how you differentiate the hats in the dark.

Non-Interactive ZKP: Non-interactive ZKPs enable the prover to authenticate information without requiring direct communication with the verifier. This type of ZKP does not involve back-and-forth interactions and is particularly relevant in scenarios where direct communication is not feasible.

Example:
Suppose you know Alice's position on a page, but your skeptical friend challenges you to prove it. To validate your claim without disclosing Wally's exact spot, you could obscure the entire page with a large sheet of paper that has a small opening through which Wally can be seen. By doing this, you verify your knowledge of Wally's whereabouts with your friend. However, since the friend doesn't see the surrounding context, they are unable to pinpoint Wally's location on the page themselves.

This approach serves as a straightforward illustration of non-interactive zero-knowledge proof. It allows someone to observe Wally through the aperture and be convinced of both his presence and your knowledge of his location, all the while keeping the specific information concealed.

3 Zero-Knowledge Proof examples

zkMe (Non-Interactive ZKP)

zkMe unlocks the potential of web3 application for both institutions and users, with secure, flexible compliance that keeps data private. Founded in December 2022 and already backed by the world's leading venture firms, zkMe is a decentralized Identity infrastructure that provides secure and private identification in the web3 ecosystem. It utilizes zero-knowledge proofs (ZKPs) to enable users to authenticate their Identity without revealing any sensitive information.

When a user (Credential Holder) creates a DID using zkMe, they are issued a unique Soul Bound Token (SBT) that is cryptographically tied to their public key. An SBT is a type of token that represents a user’s Identity in a blockchain network and is verified by other parties in the network. This means that SBTs can be used as proof of Identity without revealing any personally identifiable information or sensitive data. SBTs are a critical component of decentralized Identity solutions, as they provide a secure and privacy-preserving way for users to authenticate themselves in a decentralized network.

zkMe can be integrated into various web3 applications (Credential Verifier), such as decentralized exchanges, voting systems, and decentralized social networks, to provide users with secure and private identification. In addition to its security and privacy benefits, zkMe also offers the convenience of a universal login system. Users can use their zkMe DID to log in to multiple applications without having to create a new account for each one.

Scroll (Non-Interactive ZKP)

Scroll is a security-focused scaling solution for Ethereum, using innovations in scaling design and zero knowledge proofs to build a new layer on Ethereum. Utilizing the forefront of zero-knowledge proofs (zk) technology, Scroll is developing a Layer 2 scaling solution for Ethereum. Through collaborative open-source efforts with the Ethereum community, the team has introduced a "zkEVM" – a system that replicates Ethereum's functionality, ensuring that all operations on the Scroll network are governed by Ethereum's smart contracts. This network submits every transaction to Ethereum, where the zkEVM generates and delivers cryptographic "proofs" to confirm the Scroll network's adherence to Ethereum's protocols.

zkPass (Interactive ZKP)

zkPass is a protocol designed to uphold data privacy during verification processes, leveraging the combined power of Multi-Party Computation (MPC), Zero-Knowledge Proofs (ZKP), and three-party Transport Layer Security (3P-TLS). It introduces TransGate, a feature that allows users to authenticate their data on any HTTPS website for the web3 ecosystem in a selective and confidential manner. This technology supports a wide array of data types, including but not limited to personal identity, financial records, healthcare details, social engagements, professional experiences, and educational or skill certifications. With zkPass, verification of such information is conducted in a secure and private manner, eliminating the necessity to reveal or transfer any sensitive personal information to external entities.

Conclusion

The future of Zero-Knowledge Proofs (ZKPs) in blockchain technology promises to catalyze significant advancements, particularly in enhancing privacy and interoperability across diverse blockchain networks.

Under the guidance of Vitalik Buterin, the Ethereum community is delving deeply into the potential of Zero-Knowledge Proof technology with the aim of enhancing the platform's privacy features. While these proposals are still in the research phase, Vitalik's studies and papers, particularly those concerning the balance between privacy and compliance, lay the theoretical groundwork for the application of Zero-Knowledge technology in protecting user privacy. It's extremely similar to the philosophy of zkMe, which is a comprehensive solution to implement privacy, decentralization, compliance, and transparency in credential networks. Its emphasis is end-to-end zero-knowledge processing, and selective information disclosure. Therefore, zkMe's timely engagement and active exploration of this area to capitalize on early opportunities will help position it well in this emerging field.