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Zero Knowledge Proofs: Crypto Glue

"Zero Knowledge Proofs will be the cryptographic glue that allows untrusted participants to create and unlock streams of network value by connecting ecosystems together. Hypersecure, private and incredibly valuable."

 ~ Peter Toumbourou 

Zero Knowledge: Moon Maths

Cryptographic proofs with strong privacy and security properties have recently received a great deal of interest in their practical applications. While their virtues have long been professed within academic circles, it is only now with their blockchain enabled composability – that their true strengths are about to be unlocked by commerce and the wider community.

 

The promise of cryptographic primitives in particular is fascinating in that it protects data's integrity while simulatenously allowing that same data to be shared. Mutually exclusive parties acting with each other’s common interest are able to maintain their individual integrity. Sharing without sharing anything. 

Beautiful Maths

This beautiful piece of maths allows a party to prove to another party that a given statement (which can be virtually anything) is true without revealing any additional information.

 

When combined with Web 3.0 applications, their potential is truly incredible.

 

Think money, data, voting, food security, stimulus, and anything data integrity touches - there are few things we can see that won't be affected by this "moon maths". Modern society is governed by data - especially financial data. Simultaneously protecting this data yet allowing it's veracity to be authenticated opens enormous opportunities. The first we can see is finance in it's binary architecture. Data needs to be private but shared : enter cryptographic proofs. 

Within a closed-loop ecosystem, there is inherent trust – say within an analogue payment system running through legacy banking. This system allows both prover and verifier to interact (slowly) in an anonymous way that enables the prover to convince a verifier that a statement is true.

 

While this system has worked just fine for legacy firms (eg. Hospitals, Banks, Government Institutions, Pharmaceuticals) tomorrow’s blockchain enabled world will change the relationship from many to one relationship to a "many-to-many relationship". Decentralized yet hyper centralized. 

Through validating individual transactions via “moon maths” (thankyou to Standford’s Dan Boneh), individual transactions can be validated – for example via secure multi-party computations – that require no interaction necessary between the prover and the verifier. Zero knowledge proofs wrapped in Succinct Non-Interactive Arguments (zk-SNARKS) are just that. No interaction required between the parties. 

 

The enormous change that is about to be unlocked is a supercharged by three key forces:

1. Instancy. Instant is the New Normal: instant transactions are the new normal. Instant Food, Instant Entertainment, Instant Verification, Instant Medical attention, Instant Tax returns.   ​

2. Blockchain Composability: blockchain and smart contracts represent wonderful new ways for people to coordinate and collaborate. Buzzy acronyms like DeFi, DAO’s and NFT’s are all powered by smart contracts. These contracts rely on a composable element that enables their digital property rights to be encapsulated.

 

3. Smart Contracts: They power new kinds of transactions with clear advantages over those enabled by legacy systems. By combining their composability with Zero Knowledge Proofs for instance, we start creating an integral mesh of correlated ecosystems that preserve the integrity of the underlying data. A true departure from the centralized nature of data repositories currently being harnessed by the best in the neural network game (eg. Amazon, Google, Microsoft, Facebook).

 

For instance, traditionally it takes weeks and reams of paperwork for a bank to verify an individual's assets and issue a loan. With a smart contract, a piece of code can automatically issue a loan based on collateral provided by the individual.

                            

Smart contracts also enable developers to build upon other protocols to easily interact across multiple applications. In the loan instance, the ability to simultaneously verify, attest and quantify - within a smart contract - will also enable multy party computations to issue loans instantly. 

Composability is Key 

Composability leads inevitably toward more choice, and better user experiences, because there are no obstacles to someone taking an existing idea and making it easier to use or adapting it to new use cases – composability by its very nature inevitably leads towards better outcomes given it is iterating in the best user experience direction.  The best ideas - often open sourced - can then be programmed to interact with each other. Block by block, line by line – just like Lego.

The combination of these three concepts working in harmony together create tomorrow’s ecosystems that are both trustworthy and secure. Mutually exclusive parties acting in full harmony for the benefits of their ecosystems. 

Peter Toumbourou

Charleston Advisory Group

2024

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