- zk-SNARKs is a cryptographic technique for the conduct of private transactions.
- Its implementation is in the finance and healthcare sectors.
- The Aleo platform uses zk-SNARKs. However, Zcash was the first application of zk-SNARKs.
Every industry and sector should be private and secure concerning sensitive information. zk-SNARKs is best suited for these industries as it allows users to conduct private transactions on public blockchains. It has high efficiency and scalability, which increase its implementation in different sectors, from healthcare to finance. The idea was first developed in the 1980s by utilizing the concept of ‘zero-knowledge proof.’
What is zk-SNARK?
zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) is a cryptographic method or technique that allows users to conduct private transactions on a public ledger database. In this, the prover proves the validity of a statement to the verifier without disclosing specific details of transactions. It is incorporated into a groundbreaking platform called Aleo.
Zcash was the first widespread application of zk-SNARKs (a novel form of zero-knowledge cryptography), and shielded transactions in this are fully encrypted on the blockchain.
Benefits and Challenges of zk-SNARKs
There are three main advantages of zk-SNARKs; data privacy, privacy-preserving transactions, and efficiency and scalability.
1. Data Privacy
These can be applied to protect other forms of data as well, apart from financial transactions on the blockchain. Sensitive information, such as confidential business data, medical records, etc., can be protected and securely stored. The data or information is verified in the form of mathematical proof and confirms the exact password without actually revealing it.
2. Privacy-Preserving Transactions
It enables private transactions on a public ledger (a blockchain). Users can obscure the recipient, sender, and transaction amount while conducting transactions on Aleo. The applications of zk-SNARKs go beyond financial privacy; they have reached other industries as well, such as healthcare, governance, supply chain management, etc.
3. Efficient and Scalable
These are relatively small in size and the verification process is fast, which consumes minimal computational resources. It also increases the speed of transactions per second.
There are certain limitations of zk-SNARK; these are computationally intensive during the initial setup and verification processes. There is also a potential risk in the event of a failure to execute correctly. The primary concern is the need for a ‘trusted setup’ during the creation process.
The zk-SNARKs is improving day by day as the Suterusu team has developed a new system called ‘zk-ConSNARK,’ which is operable without the trusted setup and can provide privacy to mainstream blockchains such as Bitcoin with the lowest inflation for any cryptocurrency
Conclusion
However, although the mathematical basis of zk-SNARKs is complex, it is the most private and secure way of storing sensitive and private information. Privacy was a major issue in cryptocurrencies such as Bitcoin; hence, Zcash was introduced, which is based on the zk-SNARKs application.
It primarily relies on an initial ‘trust system’ setup, which was the second concern in the cryptocurrency community. Different teams take care of the limitations, which will further develop better options while maintaining privacy and security factors.
