ZK-SNARK Algorithm: What is it?

OVERVIEW

Cryptocurrency transactions are decentralized and anonymous. They may still be traced, though, because the blockchain makes them publicly accessible. Because cryptocurrency transactions are public, users that value privacy tend to steer clear of them.

The technology known as ZK-SNARK, or Zero Knowledge Successive Non-Interactive Argument of Knowledge, allows users to maintain the privacy of their transactions. It enables users to demonstrate that they possess particular information without disclosing it. The ZK-SNARK protocol is a component of the well-known cryptocurrency Zcash.

The blog will provide information about ZK-SNARK, a privacy-focused zero-knowledge proof system, including examples and its operation.

ZK-SNARK: What is it?

A protocol called ZK-SNARK (Zero-Knowledge Success Non-Interactive Argument of Knowledge) allows users to demonstrate that they possess particular information without disclosing it. To put it another way, ZK-SNARK protects private data without requiring communication between the two sides.

The protocol that powers the private cryptocurrency Zcash is called ZK-SNARK. These proofs' concept, which was initially created in the 1980s, addresses the privacy and anonymity problems that conventional blockchains have.

Let's talk about each ZK-SNARK component in turn.

1. No Information

It allows the user to demonstrate that they possess a particular piece of information without really giving it to the other user.

2. Brief

Because the evidence is only a few hundred bytes long, it can be confirmed in a few milliseconds.

3. Not Engaging

There is only one message sent from the sender to the recipient in the evidence.

4. Disagreement

These proofs are known in technical terms as arguments. The name comes from the fact that they function more like an argument than genuine proofs.

5. Information

Here, knowledge is understood in relation to the sender's information.

In summary, because ZK-SNARKs are completely encrypted on the blockchain, they aid in maintaining the privacy of transactions. ZK-SNARKs can demonstrate that the sender has X dollars to transfer without disclosing this knowledge to the public, thus the encrypted transactions can still be verified using the network's consensus mechanism.

An explanation of ZK-SNARKs

The drawback has been privacy ever since the first cryptocurrency, Bitcoin, which is renowned for its decentralization, security, and dependability, was introduced. The issue persisted even after numerous users chastised Bitcoin and other cryptocurrencies for making transaction details publicly accessible.

Since their offline identities were not connected to their public keys, many Bitcoin users believed that their transactions were anonymous the year after the cryptocurrency's creation. Numerous professionals, including data scientists, hackers, and other law enforcement officers, have learned over time that this is not the case.

Through sophisticated blockchain analysis, it is actually not only possible but also rather simple to re-identify people and connect pseudonymous data from many sources. Developers began working on privacy-focused cryptocurrencies as a result of these privacy concerns with standard cryptocurrencies. Zcash is the greatest illustration of a cryptocurrency that prioritizes privacy and is supported by ZK-SNARKs.

How Do ZK-SNARKs Operate?

Nodes worldwide confirm crypto transactions on the blockchain network because cryptocurrencies are decentralized and do not involve middlemen like banks or financial organizations.

Usually, the nodes verify the predetermined criteria. For example, they verify that the sender has the money on hand and provide the necessary private keys to demonstrate that the money is theirs.

The sender can, however, prove their transactions using ZK-SNARKs without even disclosing their public addresses or the amounts involved. To provide this privacy feature, the blockchain network incorporates a portion of the ZK-SNARKs protocol into its consensus rules.

During the transaction process, ZK-SNARKs transform the data that needs to be validated into equations. As a result, the equations are checked and confirmed without disclosing any information.

Examples of ZK-SNARKs

Zcash is a well-known illustration of how ZK-SNARKs may protect cryptocurrency transactions and improve privacy. Zcash is frequently preferred by contemporary investors due to its secrecy. Instead of using publicly accessible typical crypto transactions, Zcash encourages users to conduct private transactions.

In actuality, Zcash offers its users the choice of transparent or private addresses. Therefore, ZK-SNARKs protect the transaction data when a user wants private addresses.

ZK-SNARKs are used by other blockchain projects in addition to Zcash. For instance, back in 2017, Ethereum began incorporating Zcash and ZK-SNARKs. In the same year, Zcash partnered with JP Morgan Chase and ZK-STARKs to develop a blockchain-based payment system.

ZK-SNARKs are much more than just private crypto transactions, while it is their ideal use case. Users may anticipate much more from this technology, including the protection of private data on the internet. Let's observe and wait.

How Are ZK-SNARKs Used?

Applying ZK-SNARKs involves turning the data that needs to be verified or confirmed into a mathematical formula. For example, the sender uses the following information to create proof of the transaction.

• The input and output values of the transactions match.

• The private keys for the input are in the sender's possession.

• A digital signature for the transaction is cryptographically connected to the private keys.

All of the aforementioned evidence guarantees that only the sender with private keys has the ability to alter the transaction. These proofs, however, differ for each cryptocurrency. Zcash, for example, uses commitments to track unspent transaction outputs and must disclose a nullifier in order to spend those promises. By storing these promises and nullifiers as hashes, Zcash maintains their privacy.

One technology that cryptocurrencies may use to improve privacy is ZK-SNARKs. Users should exercise caution, though, as these privacy coins are just as erratic as other cryptocurrencies. Therefore, before purchasing any privacy coin, do your homework and make wise choices.

ZK-SNARK Remarks

ZK-SNARKs are subject to certain criticisms. Let's take a quick look at them.

• Through counterfeiting, anyone with private keys can produce fictitious proofs and produce fresh Zcash tokens. By developing the proving protocols and dispersing them across several parties, Zcash avoids this.
• In its early years, Zcash was founded with a 20% founder's tax. The cryptocurrency creators are paid with the tax. The founders may utilize this mechanism to produce an infinite number of Zcash tokens, according to critics.
• Since 2019, developers have been working to improve ZK-SNARKs by eliminating the trusted setup.
• Since Halo 2 doesn't require a trust setting between users, Zcash developers created the Halo 2 zero-knowledge method to prevent privacy issues.

FINAL RESULTS

When traditional cryptocurrencies suffer privacy issues, modern investors and crypto enthusiasts constantly seek new possibilities to leverage and benefit from. ZK-SNARKs is an innovative technology that enables users to prove information without revealing it.

Zcash uses the ZK-SNARKs to enhance privacy, hence the name privacy coin. Though some criticisms are there about ZK-SNARKs, with advancing technology, it can potentially prevent hackers from stealing information.