Zero-knowledge proofs are emerging as an important technology for extending blockchain networks beyond their initial focus on privacy.
Simanta Gautam, co-founder and CEO of Alpen Labs, speaking at ETHDenver, said the technology allows participants to verify complex calculations without having to process them.
How zero-knowledge proofs extend computation
Instead of each node validating large datasets, a single entity performs computations and produces proofs that can be quickly verified by other entities.
Zero-knowledge proofs change the model. A single server performs large amounts of computation and produces small cryptographic proofs that can be quickly verified by others.
“What we can do with zero-knowledge proofs is have a single server do that calculation and generate a cryptographic proof that anyone can verify, just like a signature,” Gautam said. “You can do it on your phone without actually having to verify 100,000 transactions.”
This feature is powerful because it turns expensive computations into lightweight verification problems.
Instead of rerunning a huge program, the device only needs to check a compact proof. Gautam said this is important in environments with limited processing power, such as phones or Bitcoin itself, which is intentionally limited.
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built-in privacy
There is also a privacy aspect to this technology. The system can prove that a transaction is valid or that conditions are met without exposing the details behind the transaction.
One example is an ID that allows users to prove they are 21 years of age or older without handing over their full driver’s license.
“Even if someone doesn’t have inside information, you can have cryptographic assurance that those transactions are valid,” he said.
So far, much of the adoption has centered around Ethereum rollups and Layer 2 networks, where zero-knowledge proofs can help compress activity and reduce costs.
Gautam said the opportunity could be even more interesting in Bitcoin, where the base layer is more limited.
“And with these layer twos that we can build with zero-knowledge proofs, we can completely expand the scope of the kinds of markets that exist and can be secured directly on top of Bitcoin,” he said.
