Zero Knowledge Proofs: The Simple Solution to Keeping Your Transactions Private and Fast

Using Ethereum exposes a lot of your financial data and personal information. Privacy is one of the biggest challenges facing Ethereum as noted by Vitalik. Luckily, there are a lot of teams working with cutting-edge Zero Knowledge cryptography to help solve this issue and add privacy to Ethereum..

Simply put, a ZK Proof is a way for one party, the prover, to prove to another party, the verifier, that they have done something correctly without revealing any extra information. They work by the verifier essentially asking the prover questions about the piece of information enough times until it is mathematically satisfied that the prover is genuine.

The 2 main applications of ZK Proofs as it applies to crypto are scaling and privacy. Recently, zkSync and Polygon have released zkEVMs which use ZK Proofs to verify transaction validity rather than having nodes replay all transactions. This saves on computation power, data storage, and gas costs and is the scaling application. Up until recently, researchers thought we wouldn’t have zkEVMs for at least a few more years so the R&D effort from Polygon and Matter Labs has been nothing short of immense.

For privacy, instead of needing to reveal details about a user’s balance or their public 0x address, you can use a ZK Proof to state that you have sufficient funds in your balance to make a particular transaction. I.e., instead of needing to broadcast all of my information out to the public, I can prove privately to the verifier that I have enough funds to do the thing I want to do. This Proof could then be used by the network to update the state.

For Ethereum and EVM, Railgun is the protocol that’s furthest ahead with this tech. It’s essentially an incognito mode MetaMask that lets you hold a private balance of ERC20s invisible from block explorers. As it’s a fully functional wallet on Ethereum without needing a bridge, it works with DeFi and existing smart contracts. It can work out of the box with everything that’s already on Ethereum.

ZK is definitely one of the hottest sectors in crypto right now and its utility is only just beginning to be explored by talented devs and builders. Even if you don’t care about privacy, you should care about scalability if you use Ethereum, so developments in the ZK space are something that you should pay attention to.