Zero-Knowledge Proof: changing the role of trust in relationships forever

Tommy Jamet and Gautier Hartzer

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Changing the role of trust in relationships between individuals, governments, and corporations forever

Few forces are as vital to the governance of society and the social fabric of human relationships as trust. Trust governs relationships by greasing the wheels of cooperation that allow us to live and work together with a sense of safety and belonging.

Trust in leadership and colleagues allows business and community to thrive. Trust is a basis of trade, without which we’re more likely to war with our neighbours. And trust, once broken, fragments relationships.

Think for a second about the role trust plays in your everyday life. For verification purposes, you often have to share your passport with hotels, online applications, banks, financial institutions, and more. That requires trust.

Or how about when you send a copy of your passport to HR to validate citizenship? What about when you answer security questions over the phone? There’s a very good reason why banks insist that they will never ask for your password or PIN. You don’t want your sensitive data to fall into the wrong hands.

In his day, Ernest Hemingway was wise when he wrote regarding personal relationships that, “the best way to find out if you can trust somebody is to trust them.”

However, with the modern technology of Zero-Knowledge Proofs (ZKPs), such timeless wisdom may no longer be necessary.

Lukas Schor of The Argon Group investment bank describes it well when he says that “Zero-knowledge proofs let you validate the truth of something without revealing how you know that truth or sharing the content of this truth with the verifier. This principle is based on an algorithm that takes some data as input and returns either ‘true’ or ‘false’.”

ZKPs let us imagine a new world where trust can be guaranteed. You no longer need to rely on judgement. Data integrity, data privacy, and identity verification are major issues in today’s technological landscape.

When you exchange data, the receiver must verify its integrity and you are exposed to the potential threat of a data breach. ZKPs’ privacy-enhancing technology changes this and helps us create this new world in which technological advancement replaces the need for trust.

ZKPs matter because they solve the problem of how to communicate secure information without worrying about interception. It’s most notably useful for online communications, mobile networks, and IoT and could, eventually, make passwords obsolete.

Let’s look at a few use cases.

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The democratic role of ZKPs in the verification of votes

The act of voting is a keystone of democracy.

But voting isn’t limited to general and local elections. Voting matters in the boardroom, too.

ZKPs offers a promising solution to verifiable voting by recording votes on a public Blockchain. This means that no third party verification is required, and any possibility of censorship is removed. Using ZKPs, voters can prove their eligibility without revealing sensitive data pertaining to their identity, making voting anonymous.

What’s more, the voter can then request immutable proof that their vote was indeed included in the final tally of the vote. This, therefore, ensures that all future votes are anonymous, accurate, and free from tampering.

That’s true democracy.

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Data security in digital asset exchange

The exchange of digital assets like tickets, tokens, creative work, and financial assets is another major component in this new world.

When exchanging a digital asset, some data must be public or at least shared with all the nodes so they can verify the transfer of ownership but, naturally, parties will wish to keep sensitive information private, not to mention GDPR obligations.

For example, in the settlement of assets, we can verify an order without disclosing the entire order book. This minimises the risk of disputes between counterparties. ING bank has been demonstrating its interest in Zero-Knowledge Proofs (ZKP) for privacy for a few years now.

In 2017, the bank released its ZKP range proofs, so a client could prove they are over the age of 18 without having to reveal their birth date or exact age. A year later, they developed another solution with a wider use case including the ability for clients to prove EU citizenship without revealing the specific country of domicile. And the rule of EU citizenship can even be adjusted if a country leaves the EU (Ahem…)

In the case of Corda, a Blockchain-based platform for business, ING announced a solution that uses zero-knowledge proofs (ZKPs) to validate transactions, so contents can remain private without compromising on safety. This is a significant breakthrough as, until now, Corda had to choose the lesser of two evils between acceptable privacy or acceptable security. Now it has both.

Regarding the custody of digital assets, most ZKP solutions have started with cryptocurrency as it has been the low hanging fruit, but we expect to see the spread of wider-use cases in the near future, especially with the increasing role of enterprise interest.

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Enterprises explore ZKP

While zero-knowledge proofs have been widely associated with the crypto space, in recent years we’ve witnessed a spike in enterprise interest as a way to secure data privacy across networks.

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Hyperledger Indy uses zero-knowledge proofs in identity management

For most of us, our birth certificate is the keystone to our personal identity. From a birth certificate, we can get a driver’s licence, passport, and any other vital documents. We have a birth certificate, therefore we exist — at least officially.

Unfortunately, this is not the case for everyone. There are people who move around the world undocumented, often due to conflicts in their country or other political situations that make it hard to move document themselves. Without a valid, identifying document recognised by their host countries, these migrants become “nobodies” in their new home.

Hyperledger Indy, a distributed ledger built for decentralised identity, is designed as a powerful tool to overcome this problem. It does so as a vehicle for trust.

Hyperledger Indy lets everyone in a network access the same source of truth regarding document validity. Because they use zero-knowledge proofs, they can do so without revealing sensitive information. That way, anyone in the world can verify a person’s identity without needing to see their birth certificate or passport.

This is just one contemporary use case for ZKPs to solve real problems.

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The limitations of ZKP

The only real downside to ZKPs is that they are computationally quite expensive. Nelson Petracek, CTO of TIBCO, shared in a VentureBeat article that “Performance and the level of computing power required to support trust setup can be an issue.”

However, as adoption increases, as with all technology, it’s likely we’ll see the price come down.

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Conclusion

The ability to verify sensitive information without revealing it will become increasingly valuable for everyone in a digital world where security and privacy are major issues as a result of the rising presence of actors with malicious intent.

This technology shows great promise and we believe we’ll see more partnerships and wider adoption as governments and organisations and startups work together to develop new products to solve our most pressing privacy problems.

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