What is ZK technology?

ZK technology, or zero-knowledge technology, is a blanket term for protocols and services using an encryption method called zero-knowledge proofs. Zero-knowledge proofs allow one party to prove a fact to another party so they can verify it without the second party knowing the fact itself.

The concept of ZK technology emerged in the 1980s, and the development of zero-knowledge protocols has gained traction over recent years as the rise of public blockchain platforms created new applications for encryption technologies.

Zero-knowledge proofs are most commonly used to introduce privacy and scalability to blockchains. However, they have an array of potential use cases in identity and authentication. For example, a zero-knowledge proof could allow an individual to prove they’re over 21 years old without providing a copy of their ID.

History of zero-knowledge technology

The concept of zero-knowledge proofs was introduced in February 1989 by MIT researchers who published a paper called “The Knowledge Complexity of Interactive Proof Systems.” The first line of the paper lays out the problem statement: “A proof of a theorem contains more knowledge than the mere fact that the theorem is true.”

For example, if someone needs to prove a credential, such as the fact they’re over 21, they can only do so by producing an identity document that shows their date of birth. However, they have no way of proving that they’re of age without disclosing their actual age or date of birth. The same is true of many other types of credentials.

The researchers expanded this concept into a computing theory describing the complexity of knowledge needed to prove a fact. They drew a distinction between “interactive” zero-knowledge proofs, where two parties must repeatedly interact to prove and verify the fact, and ‘non-interactive’ zero-knowledge proofs, which eliminate the need for interaction. This issue can be illustrated by an analogy called the Ali Baba cave.

The Ali Baba cave problem

The Ali Baba cave involves two parties: Peggy, the prover, and Victor, the verifier, standing in a cave shaped like a ring. Peggy can take path A on the left or Path B on the right to reach a magic door, locked via password, blocking the path to the opposite side of the cave. Peggy wants to prove to Victor that she knows the password for the magic door without having to tell it to him.

Ali Baba cave problem

To prove her knowledge, Peggy enters the cave while Victor waits outside so he can’t see which path she takes. He then enters the cave and shouts the name of the path he wants Peggy to use to return.

If Peggy didn’t actually know the password, there is a 50% chance of her emerging from the path Victor wanted her to use. However, if they repeat this test many times and Peggy always emerges from the right path, Victor can eventually conclude that she must know the password.

The Ali Baba cave illustrates a core limitation that faced cryptographers researching zero-knowledge proofs for computing purposes – Peggy and Victor must be present and willing to interact in multiple tests for the proof to be successful. These requirements limited the practical application of zero-knowledge proofs in computing.

Criteria defining zero-knowledge proofs

A key breakthrough in ZK technology came in the 1991 when Manuel Blum, Paul Feldman, and Silvio Micali published their paper “Non-Interactive Zero-Knowledge and Its Applications.”

In the paper, they propose using a cryptographic key shared between the prover and verifier. The prover and verifier agree the means of proving a fact without revealing knowledge of it and generate the shared key based on these rules. The prover can then enter their side of the shared key, which the verifier can easily verify matches theirs.

The fact can now be proven and verified in a single interaction, eliminating the need for multiple interactions. Reducing the time and burden of interaction made it feasible to deploy zero-knowledge proofs in computing at scale.

The shared key works as a pair in a similar way to the public/private keys encrypting a blockchain wallet.

In the paper, Blum, Feldman, and Micali also laid out a set of criteria that apply to all zero-knowledge proofs:

• It must be complete, meaning that as long as the input is valid, the proof will always verify the statement is true and thus can be trusted.
• It must be sound, so that an invalid input cannot return a true value.
• It must be zero-knowledge – the verifier must only learn of the validity or otherwise of a statement, not any of the information about the original input.

Types of ZK technology

Outside the blockchain sphere, ZK technology has applications in areas such as authentication and nuclear disarmament. Within blockchain, zero-knowledge proofs have developed and gained substantial utility over recent years. Currently, there are two types of ZK technology in use by blockchain protocols: ZK-SNARKs and ZK-STARKs.

ZK-SNARKs

ZK-SNARK is an acronym that stands for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. Each letter is a defining property:

• ZK – the protocol is zero-knowledge. A verifier can validate a fact without knowing the fact itself.
• Succinct – the proof is smaller and easier to verify than the fact itself.
• Non-interactive – prover and verifier are only required to interact once thanks to a shared key.
• Argument of Knowledge – the protocol must meet the “soundness” criteria laid out above so that it cannot be cheated, and it must be prohibitively difficult for anyone without knowledge of the fact to create a ZK-SNARK.

ZK-SNARKs were developed by Zcash as an encryption solution to enable private cryptocurrency transactions. However, a key drawback of ZK-SNARKs is that a trusted setup using a protocol or provider is needed to create the shared encryption key, meaning they aren’t an entirely trustless way to transact for everyday purposes.

ZK-STARKs

ZK-STARK stands for Zero-Knowledge Scalable Transparent Knowledge of Argument. The properties that differ from a ZK-SNARK are: 

• Scalability – where there is a lot of data to be processed for a verification, ZK-STARKs are faster at generating and verifying proofs. ZK-STARKs can handle exponentially larger amounts of data with only an incremental increase in verification time.
• Transparency – ZK-STARKs leverage publicly verifiable randomness to generate the shared key needed for the zero-knowledge proof. As such, they eliminate the need for a trusted setup.

These features mean ZK-STARKs offer some advantages over ZK-SNARKs; however, ZK-STARKs generate more complex proofs than ZK-SNARKs, so generally incur higher transaction costs.

ZK technology for blockchain scalability

Layer 2 platforms leverage ZK-STARKs to make Ethereum more scalable, using a solution called zero-knowledge rollups, or ZK rollups.

This method is used to bundle Ethereum transactions into batches to be executed on the Layer 2 platform instead of the Ethereum mainnet, alleviating congestion. The Layer 2 platform then provides a ZK proof of the processed transactions to the Ethereum mainnet to update the overall state of the blockchain.

ZK rollup projects include Layer 2 platforms StarkNet, zkSync, and Polygon Zero.

Other use cases of ZK technology

Although not yet widely deployed, ZK technology has the potential to help protect personal information. Suppose an individual can provide a ZK proof of being of age, resident in a particular country, or not on any sanctions list. In that case, it could eliminate the requirement for people to provide copies of government-issued IDs to service providers. In turn, this would reduce the risk of documents being hacked and leaked online, enhancing user privacy.

Similarly, ZK proofs could make online authentication easier, eliminating the need to expose sensitive login credentials each time someone accesses a service.

ZK Technology essentials

• ZK proofs are an encryption method enabling parties to prove and verify information without having insight into the information itself.
• ZK technology emerged in the 1980s and developed into two main types of zero-knowledge proofs: ZK-SNARKs and ZK-STARKs.
• ZK-SNARKs are used to make cryptocurrency payments more private, while ZK-STARKs are now widely deployed in Layer 2 scaling platforms. ZK technology has other potential use cases in identity and authentication.