Zero Knowledge — Basic Principles of ZK Technology

Zero-knowledge is a way to prove to another person that a statement is true without revealing the information that proves it.

The idea of such proofs was formulated in the 1980s by MIT researchers Shafi Goldwasser, Silvio Micali, and Charles Rackoff. They presented it in their paper «The Complexity of Proofs in Interactive Systems» (1985), where they described the principles of constructing interactive protocols that allow statements to be verified without revealing information.

Source: Рlisio.net

How Zero-Knowledge technology works

1. Formulating the rule. First, a rule is defined in the form of a diagram or program. For example: «the password matches the stored hash»  or «all transactions in the block comply with the registry rules.» 

2. Data preparation. Public data (e.g., smart contract address, Merkle root, or age threshold) is taken and combined with your secret — the so-called «witness.»

A witness is personal information that you do not reveal.

3. Creating proof. The prover runs the scheme with your secret and creates a short cryptographic proof (e.g., SNARK or STARK). This proof can be sent to anyone — it does not reveal the secret itself.

4. Verifying the proof. The verifier or smart contract quickly verifies the proof and compares it to public data. If everything matches, the claim is considered valid, and your secret remains hidden.

Source: Сhain.link

What is zero-knowledge used for?

One of the most obvious applications of ZKP in cryptocurrencies is to verify that a user has sufficient funds for a transaction. At the same time, the network does not know who is performing the operation or what that person's balance is.

This technology is also used in situations where it is important to protect data: personal information, financial transaction details, or other sensitive information.

In addition, zero-knowledge proofs help verify the authenticity of data and users, grant access to certain services, and establish secure connections without transmitting unnecessary information.

Types of zero-knowledge 

1. Interactive ZKPs. The verifier interrogates the prover in real time to verify the truth of the statement.

2. Non-interactive ZKPs. These do not require direct interaction between the prover and the verifier. Verification is performed after the proof has been created.

In addition, proofs can be divided according to the need for trusted setup:

1. With trusted setup. Some protocols, such as zk-SNARKs, require an initial phase where verifiers create a special secret. After setup, the secret is destroyed — if it is retained, attackers will be able to forge data on the network.

2. Without trusted setup. Protocols such as zk-STARKs do not require this phase. This simplifies usage and reduces the risk of compromise.

Scalability and ease of use

1. One of the key advantages of zero-knowledge proofs is their ability to scale. ZK rollup technology allows thousands of transactions to be combined into a single block for verification, using only the necessary data fragments.

This makes the verification process faster and less resource-intensive than traditional methods such as Proof of Work or Proof of Stake. ZK rollups enable more efficient scaling of blockchains without compromising security and privacy.

2. Although implementing zero-knowledge proofs can be technically challenging, they will be very convenient for users. Once ZKP is integrated, people will be able to quickly verify their identity, exchange data, and conduct transactions in just a few seconds.

Advantages of zero-knowledge 

1. Greater privacy. Users can confirm actions or data without revealing unnecessary information, which is especially important in public blockchains.

2. Enhanced security. ZKPs allow weak verification methods (such as passwords) to be replaced, reducing the risk of data leaks.

3. Better blockchain scalability. Proofs help reduce network load and increase throughput.

Disadvantages of zero-knowledge

1. High computational requirements. Creating proofs can be resource-intensive.

2. Trusted setup risks. If the initial parameters have been compromised, the system may become vulnerable.

3. Quantum threats. Some ZKP schemes could theoretically be weakened by future quantum computers.

In conclusion

Zero-knowledge technology is no longer just theoretical. It is used in identification systems, fast ZK rollups, cross-chain settlements, and tools for developers who want to scale blockchain while maintaining privacy. Project examples show that ZK technologies are moving from laboratories to real products with users, liquidity, and network activity.

However, this sector is still in its early stages of development. Tokens associated with ZK infrastructure can fluctuate greatly in price, technology implementation timelines sometimes change, and individual roadmap milestones do not always impact the market.

Subscribe and get access to the GoMining course on cryptocurrency and Bitcoin, which is still free: https://academy.gomining.com/courses/bitcoin-and-mining