From privacy coins to shiny iris-scanning orbs, zero-knowledge proofs have become synonymous with crypto, scalability, and privacy. In 2022, investors gave over $700 million in funding to companies pushing the envelope with zero-knowledge proofs. This year, ZK-proofs has arguably become one of the biggest blockchain trends, with several major Ethereum scaling protocols hitting mainnet.
What are Zero-Knowledge Proofs?
ZK-proofs are a cryptographic protocol that allows one party to prove the truth of a statement to another party without sharing any of the statement’s contents. An often-cited example is proving to a bartender that you’re old enough to drink without showing your ID or even telling them your birthdate.
Satoshi Nakamoto’s Interest in Zero-Knowledge Proofs
In August 2010, the user “Red” on the online forum Bitcointalk asked whether there could be a way to improve the privacy of Bitcoin transactions. Satoshi Nakamoto, the pseudonymous creator of Bitcoin, responded with interest but expressed concern about the “double-spending” problem. He doubted that zero-knowledge proofs could solve this fundamental flaw.
The Solution: Zcash
Privacy-focused cryptocurrency Zcash was launched in October 2016 by Electric Coin, a firm made up of computer scientists from the formative years of Bitcoin. Zcash was built by modifying Bitcoin’s original source code and became the first peer-to-peer cryptocurrency to use zero-knowledge proofs, allowing users to hide or shield their wallet addresses.
Zero-Knowledge Proofs for Scaling Ethereum
Eli Ben-Sasson, the founding scientist of Zcash, went on to found StarkWare, a company known for using zero-knowledge proofs to scale Ethereum through rollups. Ben-Sasson credits the enthusiasm from Bitcoin core developers for ZK-proofs as a pivotal moment in his decision to co-found StarkWare. Today, Bitcoin itself is ready to enter the world of ZK-proofs with the development of the world’s first ZK light client by ZeroSync.
The Enigma of Satoshi Nakamoto
Satoshi Nakamoto’s interest in privacy is evident from his past remarks and actions. He was known to use IP-masking browsers like Tor for anonymity. Although he disappeared from the public eye in 2010, it is believed that if he had continued to be active, he would have likely pushed to bring zero-knowledge proofs to Bitcoin.
Zero-knowledge proofs have the potential to revolutionize the blockchain industry by enhancing privacy and scalability. While Satoshi Nakamoto may not have had the opportunity to witness their integration into Bitcoin, it is clear that he would have been intrigued by the innovations in privacy brought about by Zcash and other projects. As the blockchain ecosystem continues to evolve, zero-knowledge proofs will play a crucial role in shaping its future.