The new Holy Grail: zero knowledge proofs
Transactions in IP and finance often require an excessive amount of verified personal information. But what if there was a way to provide verified proof by revealing only the specific amount of information necessary to approve the transaction?
Here’s the scenario. You’re applying for a credit card and need to show the credit card company that you’ve carried a sufficient balance in your bank account over the last few months. Normally, your best option would be to supply bank statements, even though you know they’ll reveal a lot more personal information than is necessary for the credit card company to see. Ideally, you’d prefer to show that you satisfy their requirements without having to reveal your exact account balance or entire transaction history – now, with collaborations in blockchain technology, you can.
Introducing zero knowledge proof (ZKP) – a technique that allows you (the prover) to relay private data to the verifier (the credit card company in this example), as proof that certain properties of your data hold true, without revealing any more than exactly what’s needed to verify the property. ZKPs provide insights in a trusted, verifiable way, where one network can prove to another network that a certain ledger data is true, without revealing its content.
Frameworks for computing ZKPs already exist, but they require a time-consuming setup process for each new property needed between the prover and verifier. The system needs improvement overall, but frameworks that don’t require this process show considerable barriers with operating logistically in real time.
Software developers are now building scalable frameworks that allow a one-time proof setup for participants to prove large-class properties about their private documents. The frameworks are designed specifically to handle the challenge of verifying proof while reducing unnecessary sharing of personal data. For example, you could prove that a tax invoice meets compliance requirements without ever having to reveal exact values of any of the fields on the invoice.
They also let you generate a predefined set of rules—called zk proofs—on the properties that make up your data, which can then be verified by any other party in the ecosystem. This would allow compliance and business checks to be achieved much faster, all while completely protecting your sensitive personal data.
This technology is a game changer in the blockchain arena. It enables new use-cases of secure, verifiable private information and network-wide insight generation.
With the countless opportunities this type of interoperability can offer, we’re not surprised it’s being viewed as a holy grail. It’s easy to see how enabling privacy in blockchain collaborations can offer value to users and the ecosystem as a whole. We’re excited to see these opportunities unfold and believe they will spur compelling case studies to support the adoption of blockchain platforms on a wider scale.