Zero knowledge or zero-knowledge prove is a cryptography concept that describes the ability of one party (the prover), to prove to another (the verifier), that a statement is true, without disclosing any additional information about that statement. Zero knowledge is a technique that can be used in blockchain technology to increase the security and privacy of transactions and data stored on it.
Blockchain technology’s key feature is its ability provide a decentralized, tamper-evident ledger of transactions. This transparency can be a drawback as it could reveal sensitive information to people who aren’t supposed to have it. This issue can be addressed by using zero knowledge. Parties can prove the validity or content of transactions or pieces of data, but not reveal the actual content.
Implementing smart contracts is one example of how blockchain technology can use zero knowledge. Smart contracts are self-executing contracts where the terms between seller and buyer are directly written in code. They are stored on blockchain and can be used to facilitate, verify and enforce the performance or negotiation of contracts.
Smart contracts can be used for a wide range of purposes, including supply chain management and real estate transactions. The transparency of blockchain could reveal sensitive information about contract terms or parties. This information can be obscured with zero knowledge, but the smart contract can still be verified and enforced.
Zero-knowledge applications (ZK Apps) and zero knowledge rollups are another example of blockchain technology requiring zero knowledge. ZK-Apps, which are decentralized applications, use zero knowledge to allow private, secure transactions on the blockchain. ZK-Rollups are a scaling solution to blockchain networks. They use zero knowledge and compress multiple transactions into one compact proof that can then be verified by the network.
The use of zero knowledge in Blockchain technology can improve the security and privacy of transactions and data. This makes it useful for many applications, such as smart contracts and decentralized ones. It can also improve the scalability and security of blockchain networks, as it allows for multiple transactions to be compressed and verified without disclosing their details.