ELI5 Zero Knowledge (ZKP) cryptocurrency proofs?

ELI5 Zero Knowledge (ZKP) cryptocurrency proofs?

In cryptographic theory, a zero knowledge proof is a method by which you can convince someone, who does not necessarily trust you, that you possess a piece of knowledge (proof) without providing absolutely any chunk of that piece of knowledge (thus, zero knowledge).

In simple terms, zero knowledge proofs happen when you present the result of using a secret, without ever revealing the secret.

The technique is also known as “interactive zero knowledge proofs”, because it often involves two or more people interacting with each other.

Several examples of non-cryptographic zero knowledge proofs are given in the corresponding Wikipedia article.

One such example involves proving to a counterpart that you know the password to open a door in a circular pathway. If you are able to come out of the other side of the sideway, it proves you have opened the door.

Thus you prove to whoever is waiting for you at the opposite exit that you opened the door, without revealing the secret pass phrase to that counterpart.

ZKP in Cryptocurrencies

Since cryptography is basically just applied mathematics (now generally using computers, but it wasn’t always like that), with cryptocurrencies the concept of ZKP is done via algorithms.

How, exactly, does one simulate the previously presented real world examples using math?

It turns out, there are mathematical functions called “trapdoor functions” which are very very easy to compute in one way, but extremely difficult if not impossible to reverse.

This kind of function is often used in cryptography. As explained in our asymmetric cryptography article, you can compute a certain value using only a piece of this secret, without revealing it to the other party.

This value can be compared by your counterpart using their own piece of a secret, without either participant knowing the others’ private data.

If the comparison matches somehow, both parties will be convinced that the other knows the full secret.

For example, PVIX cryptocurrency uses ZKP to protect users’ privacy.

Illustration Credit: Dake via Wikimedia by CC

on October 31, 2018