Privacy is an important factor to consider in the cryptocurrency world. It is one of the important reasons for the popularity of cryptocurrencies in the world. People don’t want to share their personal details with any other parties because of many reasons including the fear of attack from third parties.
There are many features available in the cryptocurrency platforms that protect the privacy of users. One is Zero-Knowledge Proofs (ZKPs). This is a cryptographic protocol and this will allow users to show something beyond doubt to another party without sharing their personal details. The parties included in this are the prover, verifier, and statement.
The prover is the party that wants to prove something, the verifier is the party that wants to verify the things said by the prover, and the statement is the fact that the prover is trying to prove. Let’s see how Zero-Knowledge Proofs (ZKPs) help to enhance the privacy in blockchain transactions.
Fundamentals of Cryptography
Zero-knowledge proofs (ZKPs) will help the blockchain improve in all possible ways to provide safe and secure transactions without the need for users’ personal details. It will become more popular and spread across more industries in the coming days. It uses cryptography for encryption and decryption processes to protect data. First, encryption will convert the plain text to ciphertext, and then decryption will convert the cipher text to plaintext.
Advantages of Zero-Knowledge Proofs
There are many advantages to using Zero-Knowledge Proofs. Anonymous verifiable voting, privacy-enhanced transactions, supply chain integrity, healthcare and data privacy, and financial services are some advantages of Zero-Knowledge Proofs. These points are explained below:
Anonymous Verifiable Voting
Safe and anonymous voting is more acceptable than the traditional ones in the governance system. Using ZKPs allows voters to verify their eligibility without sharing their personal details. This will also give them ballot privacy and they can confirm their vote is counted in the election without revealing their actual vote.
Privacy-Enhanced Transactions
The anonymity of the sender and receiver in a transaction is protected and will be not visible in the public ledger. The transaction will be 100% Confidential without sharing any personal details.
Supply Chain Integrity
Many latest supply chains exchange sensitive data of parties associated with the transactions. Here, Zero-Knowledge Proofs help the parties to prove the legitimacy of the data without sharing any personal details.
Healthcare and Data Privacy
Patients can easily prove that they have followed the correct health criteria without sharing their full medical history. Zero-knowledge proofs follow the regulations of HIPAA and GDPR. This will help the patients to safeguard their privacy from any possible threats.
Financial Services
Zero-knowledge proofs (ZKPs) play an important role in the financial sector. The ZKPs allow the parties to make private agreements on public blockchains. The parties can also make the transactions securely and prove they have enough funds to make the transactions without revealing the account balance.
Zero-Knowledge Proofs and Blockchain Scalability
Zero-knowledge proofs not only protect the privacy of users but also play an important role in the scalability of blockchains. Let’s see how it works. Blockchains face many scalability issues such as on-chain data loads. Here, Zero-knowledge proofs enable the off-chai computation to reduce the on-chain data loads. This will help to enhance the efficiency of blockchains.
A more efficient blockchain will process more transactions per second. Also, they will safeguard the protection of the transaction. Zero-knowledge Proofs will help the blockchain network to reduce transaction costs and avoid situations like overwhelming data packets. ZKPs will be the main factor that will help the blockchains to process without any troubles in the future.
The Future of Zero-Knowledge Proofs in Blockchain
The popularity of Zero-Knowledge Proofs is increasing day-by-day in the crypto industry. Experts in the field say, that the more better the blockchain technology, the ZKPs will provide new probabilities. They are in all the important sectors, whether it is private transactions, privacy, or voting systems. This will soon spread into more sectors and let them adopt blockchain networks for more guaranteed security.
Conclusion
Zero-knowledge proofs (ZKPs) will be an important feature in the blockchain and its bright future. This will help the blockchain to make security and privacy more strong. Soon, it will spread into other sectors and they will adopt the blockchain network because of the trustworthiness created by the Zero-knowledge proofs.
