zk-SNARK Technology In A Nutshell

zk-SNARK technology is cryptographic proof allowing one party to prove it possesses information without having to reveal it. zk-SNARK is an acronym for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. More specifically, a zk-SNARK is a zero-knowledge proof protocol used to prove possession of certain information without revealing that information. This technology might play a key role in the future development of Ethereum.

Understanding zk-SNARK technology

The first zero-knowledge proofs were developed in the late 1980s, with a seminal research paper entitled How to Explain Zero-Knowledge Protocols to Your Children released in 1990 by cryptographer Jean-Jacques Quisquater.

The paper explains zero-knowledge proofs in the context of a parable involving Ali Baba’s Cave. But for the sake of brevity, it’s important to understand that these proofs have one fundamental goal and three key players. The verifier must convince themselves that the prover possesses knowledge of a secret parameter called a witness. This witness must satisfy some relation without it being revealed to the verifier or indeed anyone else. 

In a real-world scenario, imagine a patron wanting to enter a bar and having to prove they were over the legal drinking age of 21. The patron does not want to reveal their exact age, but the bouncer at the door must verify whether they are legally allowed to drink. Theoretically, the bouncer could use zero-knowledge proofs to scan the patron’s ID and determine whether they were over 21. Note that the exact age of the patron does not need to be revealed.

Today, zk-SNARK is commonly associated with cryptocurrency and blockchain. We will take a look at this association in the next section.

zk-SNARK technology and cryptocurrency

When cryptocurrencies such as Bitcoin were first developed, privacy was less important than a need to create a trust-less system for maintaining the integrity of digital transactions.

Indeed, Bitcoin users assumed such transactions were anonymous because their real identities were not associated with user public keys. In recent years, concerted attempts by data scientists, hackers, and law enforcement proved it was relatively simple to identify people who had given pseudonymous information to multiple sources.

This put the spotlight back on privacy and lead to the development of coins such as Zcash that were backed by zk-SNARK technology. This technology is based on complex mathematical functions, but in the case of Zcash, zk-SNARKS can be verified nearly instantly without any interaction between the prover and the verifier. The identity of the prover and verifier are kept hidden, as is the payment amount. Importantly, zk-SNARKS usually take up much less data than a standard Bitcoin transaction and are more scalable as a result.

Future applications of zk-SNARKs

zk-SNARK has virtually limitless future applications because it is useful wherever verification is required without disclosing inputs or leaking information.

Having said that, its usefulness is somewhat limited since the generation of proofs for complex functions is resource-intensive. In cryptocurrency, the makers behind Zcash are working to optimize this process to make it more widely available. 

In any case, zk-SNARKs can be added to any existing distributed ledger solution to add an extra layer of security for enterprise use cases. This solution is particularly attractive for multiple companies operating on the same blockchain with a desire to keep sensitive or proprietary business information private. Instead of revealing this information to other players, zk-SNARKS allow each business to store only the proof of each transaction on a given node.

Key takeaways:

  • zk-SNARK technology is cryptographic proof allowing one party to prove it possesses information without having to reveal it.
  • zk-SNARK technology is most commonly associated with blockchain and cryptocurrency, but it was coined as far back as the late 1980s by cryptographer Jean-Jacques Quisquater.
  • zk-SNARK technology is a vital tool for multiple businesses operating on the same blockchain with sensitive information. The technology will become much more widespread once verification functions become less computationally intensive.

Read Next: Blockchain Business Models Framework Decentralized FinanceBlockchain EconomicsBitcoinHard-Fork.

Read Also: Proof-of-stakeProof-of-workBlockchainERC-20DAONFT.

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