zk-SNARK

Welcome to the Web3 world, where digital finance and applications are shown in a revolutionary way through the fusion of blockchain technology, cryptocurrencies, and a pioneering spirit. Are you overwhelmed by the wealth of terms in the Web3 world that you don’t understand? Are those slangs barriers for you to learn about Web3? Don’t worry! We’re here to explain the obscure terms to guide your learning. Today, we're diving into an exciting development in the world of Web3: [zk-SNARK].

Zk-SNARK, which stands for "Zero-Knowledge Succinct Non-Interactive Argument of Knowledge," is a type of cryptographic proof. It enables one party to demonstrate possession of specific information without actually disclosing the information itself. This proof utilizes a secret key that is generated prior to the transaction.

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Source: Moralis Academy

Zcash was the initial mainstream implementation of zk-SNARKs, an innovative type of zero-knowledge cryptography. The robust privacy protections of Zcash stem from its ability to completely encrypt transactions on the blockchain while still allowing them to be confirmed as valid under the network’s consensus rules through the use of zk-SNARK proofs.

The first significant reference to SNARKs appeared in a research paper by Alessandro Chiesa, a professor at UC Berkeley. Chiesa is also a co-founder of ZCash, a cryptocurrency focused on privacy that pioneered the use of zk-SNARKs as a proof system for conducting shielded transactions.

Since that initial application, zk-SNARKs have evolved through various iterations, though the core principles remain unchanged. To grasp the underlying logic of zk-SNARKs, it's essential to understand three fundamental concepts:

zk-Rollups are layer-2 scaling solutions that use zero-knowledge proofs (ZKP) to enhance blockchain performance and efficiency. Differing from traditional proof systems, zkSNARKs serve as proof aggregators, compiling a single proof for multiple transactions within a batch.

The brevity of zkSNARK proofs allows for rapid verification of transaction correctness. This single proof approach reduces the storage and computational demands on the blockchain, leading to quicker transaction processing and lower fees.

Polygon Hermez and zkSync are prominent examples that leverage zkSNARKs to address scalability issues on Ethereum.

zkSNARKs enable private transactions on blockchains by concealing details such as the sender’s and receiver’s addresses, and even the transaction amount. While the transaction details remain private, they are still verifiable by network validators.

Private transactions provide an alternative to the financial surveillance common in traditional banking systems. They offer businesses a way to conduct their activities securely and privately. Moreover, from a security perspective, private transactions prevent blockchain front-running, where entities take advantage of pending transactions using bots.

Projects like Z-Cash and Tornado Cash are facilitating these private transactions.

Every day, individuals must prove their identity for various reasons—from banking to international travel, and even age verification at bars. These interactions often do not safeguard privacy.

However, with zk-SNARKs, users can confirm the legitimacy of their identity or credentials without disclosing any personal information, enhancing data privacy and reducing the risk of identity theft.

This leads to trustless authentication, eliminating the need for service providers or intermediaries to hold user credentials.

Zk-creds is an emerging protocol concept that utilizes zk-SNARKs to offer flexible, anonymous credentialing.

Rooted in advanced mathematical principles, zk-SNARKs allow an individual to demonstrate not just the presence of specific data but also their own knowledge of that data.

The primary advantage of zk-SNARKs lies in their ability to preserve confidentiality using sophisticated encryption methods. This allows parties to carry out transactions and exchange data while keeping the foundational details concealed.

Additionally, the efficiency of zk-SNARKs is enhanced by their non-interactive nature, which enables the swift verification of data in a matter of milliseconds.

Moreover, zk-SNARKs eliminate the necessity for ongoing dialogue between the party proving the information and the one verifying it. A single exchange suffices, simplifying the verification process and promoting cost savings.

Certainly, there are some challenges associated with zk-SNARKs. A significant vulnerability is the potential for misuse of the private key used in creating the proof's parameters. If compromised, this key could enable the fabrication of deceptive yet seemingly legitimate proofs. Such a breach could lead to the unauthorized creation of Zcash tokens, essentially counterfeiting the cryptocurrency. To mitigate this, Zcash's design involves a complex proof protocol that is distributed among multiple parties.

The issuance process for Zcash also presents concerns. The cryptocurrency was initially programmed with a "founder's tax," effectively a 20% fee on all newly mined blocks during the early years of the currency. This fee rewards the developers but has drawn criticism over the potential for abuse by founders to covertly generate an unlimited quantity of Zcash tokens, thus obscuring the true number of tokens in circulation.

In response to these security concerns, since 2019, efforts have been underway to enhance zk-SNARKs by eliminating the need for a trusted setup. Notably, in 2022, Zcash developers rolled out the Halo 2 zero-knowledge system, addressing one of the significant privacy concerns of the blockchain. Unlike its predecessor, Halo 2 functions without necessitating a trusted setup among users.

As a facilitator of private transactions, scalable solutions, and identity protection, zk-SNARKs stand out for their ability to confirm the veracity of data without compromising the privacy of the underlying information. While initially employed in Zcash for enhanced transaction privacy, the applications of zk-SNARKs have broadened to include a myriad of use cases across the blockchain ecosystem, from reducing computational load through zk-Rollups to enabling anonymous credential verification with zk-creds.

Despite the advancements and applications, zk-SNARKs have not been without their challenges and criticisms. Concerns over the misuse of private keys and the potential for counterfeiting within Zcash have spurred ongoing efforts to refine the technology, with significant progress marked by the introduction of Halo 2—a system that operates without the need for a trusted setup, thereby strengthening the integrity and privacy assurances of zk-SNARKs.

As we look to the future, the role of zk-SNARKs in Web3 appears not only as a robust privacy-preserving tool but also as a beacon for the next stage of blockchain scalability and security. Continuing advancements in this field promise to expand the horizons for decentralized finance, digital identity, and beyond, ensuring that the innovative spirit of Web3 continues to thrive on the foundations of secure, efficient, and private cryptographic proofs.