What are Zero-Knowledge Proofs?
Zero-Knowledge proofs are becoming a hot topic lately to the blockchain and crypto world. The most recent spark of this was the work being done on with Polygon which is looking to implement a proof-based identity system which you can read about here
What are Zero-Knowledge Proofs?
In the world we live in today you have documents that prove who you are. They are used to validate your opinion and statements. You most likely use them to receive a service, travel among other means. This process often times can be long and tedious thus speed like everything in the world we find ourselves in is a high commodity as time is precious.
Zero-Knowledge or (ZK) was first proposed in the 1980s by Goldewasser, Micali and Rackoof at MIT.
An Example of Zero-Knowledge proof (ZKP)
In our world a credit score is the key to many instruments of the financial system. This however comes with every bit of your personal information about who you are. That information really is not required and needed and because a major security issue. It's why we have seen so many hacks that are so damaging to customers and users and hardly any repercussions to the company.
By using ZKP the information would be verified without revealing any information about who or what is requesting it.
How Will ZKP Work In Crypto?
Since this feature will most likely hit Polygon first it feels like it should be the prime focus of this example. From the looks of it everything is going towards KYC compliance for crypto. (Which as a side note might be why the power and allure of bitcoin is falling back into focus as most people do not want to deal with KYC) however with institutional investors privacy needs are needed along with knowing how each person is with a security/verification system. This will be the first steps in providing such a system.