Zero-knowledge is a concept in cryptography that states that it is possible to prove the truth of a statement without revealing any specific information about it. This can be demonstrated using zero-knowledge proofs (ZKP), which are widely used in blockchain applications and the crypto industry, primarily to provide privacy enhancing features for decentralized protocols.
Why zero-knowledge proofs are important
Zero-knowledge proofs provide greater privacy and security. Zero-knowledge proofs allow people to verify information without having to disclose sensitive personal data. For example, they can verify that they are eligible for certain services without having to show identification.
Zero-knowledge proof is also useful for #blockchain networks. It enables complex off-chain processing and frees up space on the underlying blockchain. It also overcomes the transparency limitations of public #blockchains and allows private data to be used for transactions without making it public.
Zero-knowledge proofs are used everywhere in cryptocurrencies, from private transactions to verifiable computation and highly scalable layer 2 solutions. This unique feature helps address key privacy, scalability, compliance and interoperability issues for #web3 systems.
How zero-knowledge proofs work
A zero-knowledge proof is a proof of the truth or falsity of a statement without revealing the statement itself or the basis for its truth or falsity. The one who attempts to prove the statement is the "Prover" and the one who verifies the statement is the "Verifier".
Zero-knowledge proofs work when the prover correctly answers a set of questions from the verifier. By correctly answering a series of consecutive questions, the verifier indicates that he or she must have access to secret information from which to determine the answer.
In ZKP, the verifier can prove to the verifier knowledge of some secret information without having to prove anything more than a particular truth. For example, the #Zcash privacy model allows for secure transactions in which the ZKP confirms the balance and value of the transaction without disclosing the sender, recipient, or amount.
ZKP uses advanced cryptography to achieve confidentiality.
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