True privacy on the Internet may finally be possible with a new tool. This tool can, for example, allow you to prove that you are over 18 without disclosing your date of birth or prove that you have enough money in the bank for an undisclosed financial transaction without revealing your account balance or other details. The end result of this will be a controlled network free from the risk of privacy breach or identity theft.
The tool is zero knowledge proof, an emerging cryptographic protocol. Although the idea of perfect online privacy have been there for long, but interest has soared over the past few years only, thanks to the growing obsession of cryptocurrencies and blockchain, most of which are not private.
Cryptocurrency Zcash providing online privacy
Much of the merit of a Zero Knowledge practice proof lies in Zcash, a digital currency launched in late 2016. Zcash developers used a method called zk-SNARK (for “uncluttered knowledge, non-interactive knowledge argument”). Zcash grant users the power to perform anonymous transactions.
This is usually not possible in cryptocurrencies like Bitcoin and in most other public blockchain systems where transactions are visible to everyone. Although these transactions are theoretically anonymous, they can be combined with other data to track and even identify users. Vitalik Buterin, creator of Ethereum, the second most popular blockchain chain in the world, described the zk-SNARK as a “revolutionary technology”.
This is helpful to ensure privacy of details and also resolves security concerns put across by financial institutions. As per them privacy is a major hurdle in adaptation of the blockchain technology. For these financial institutions, for example banks, this could be a way to use blockchain in their payment systems without sacrificing their clients’ privacy. Last year, one of the major banks JPMorgan Chase added zk-SNARKs to its own blockchain-based payment system to ensure privacy.
However, despite their promise, privacy protocols like zk-SNARK are heavy and slow. They also require a “secure configuration,” which creates a cryptographic key. This key can compromise the entire system if it falls into the wrong hands. Researchers are looking for alternatives that implement zero knowledge proof more effectively and do not require this key – Mike Orcutt