Banks are interested in the privacy preserving potential of zero-knowledge proofs Open and decentralised systems such as blockchains create privacy concerns for some use cases, made even more acute by permissioned blockchains which seem to be morphing into something that belies almost all the fundamental benefits of the original design – but that’s another story.
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Ensuring privacy of transaction data is a desirable feature at the very least, and probably the sine qua non (indispensable element) of distributed banking ledgers. Heavy hitters in the blockchain space such as Ethereum’s Vitalik Buterin and Chain.com’s Adam Ludwin are enthusiastic about the potential of zero-knowledge proofs, which truthfully prove properties of encrypted data without revealing the data itself.
Professor Eli Ben-Sasson of Technion, Israel Institute of Technology is an expert on zero-knowledge (ZK) proofs and part of the Zerocash project and the startup Zcash . There’s a big difference between ZK proofs and almost all currently usedcryptography, such as hashing, public key cryptography and digital signatures.
These traditional cryptography methods are very good at dealing with data, said Ben-Sasson. "You can sign a file, you can encrypt a file, you can hash and commit to a file. But these methods lack any semantics.
"There’s no way to distinguish between encrypted/hashed files with various computational properties. For instance, there is no way to distinguish between that file being a sequence of transactions whose sum is $100, and a song, or a JPEG picture."
"The whole point about things like zero knowledge proofs is that, using them you can argue about various properties of encrypted data without revealing that data" he said. A story has been used to explain zero-knowledge protocols, involving a cave shaped like a ring, with the entrance on one side and the magic door blocking the opposite side. In this […]
