Zero-Knowledge Proof

A zero-knowledge proof is a cryptographic technique that allows the sharing of cryptographically encrypted information while keeping the underlying data private, including personally identifiable information that may be part of the data.

Blockchains are generally designed to be transparent, with each node able to see and download all data stored on the ledger. Zero-knowledge proofs allow the use of private datasets in applications (such as smart contracts) without revealing the underlying data. As a result, zero-knowledge proofs are generally considered to offer greater privacy in blockchain transactions.

In general, in a zero-knowledge proof, one party (the prover) can prove to another party (the verifier) the truth of a statement without sharing the statement’s contents or revealing how the prover discovered the truth. The proof works by having the verifier ask the prover to perform a series of actions that can only be performed accurately if the prover knows the underlying information.

A few applications where zero-knowledge proofs can be used include money transfers and identity authentication.