# blockchain # zeroknowledge # beginners # crypto Zero-Knowledge proofs are encryption techniques that allow you to verify or prove (mathematically) that a statement about something or someone is real, without having to reveal details about that subject..
They’re used to prove someone’s age to access specific content, for example.By not having to reveal the identity or even the date of birth, anonymity is guaranteed.That is, privacy and data protection.
Were Zero Knowledge Proofs Created for Cryptocurrencies?
Definitely not! The first article on the topic is from 1985, when cryptocurrencies were far from being a trending topic.
However, this assumption is based on the fact that associating zero-knowledge proofs with blockchain technology can create a privacy-protecting, secure and decentralised environment.
ZCash was the pioneer cryptocurrency to bring this technology to blockchains.Today, in addition to it, there are other alternatives such as Horizen (ZEN) and, recently, Tron (TRX) has added this functionality to its platform.They are all small networks – Tron, the biggest of them, only ranks 17th in market cap among all Cryptos – but its potential is great.
Vitalik Buterin, co-founder of Ethereum, has already said that he considers zero-knowledge proofs to be one of the “most relevant and even most underrated applications for blockchains.”
Wall Street’s Grayscale fund, which alone controls almost 3% of the total Bitcoins in circulation, has funds for direct investment in ZCash and Horizen.The manager offers this possibility for only seven other Cryptocurrencies.
What are some real world applications of zero-knowledge proofs?
Now that we’ve covered the importance of zero-knowledge proofs, there is only one question left: what are some real world applications of it?
Financial management is one of the areas with the greatest possibility of applying zero-knowledge tests.
This happens because of the visibility of transactions existing on various blockchains (such as Bitcoin itself), making these platforms incompatible with the regulations of institutions and Central Banks.
On the other hand, fully encrypted blockchains are also not usual for everyday life because, for example, they do not allow it to be proved to a judge that an amount was paid for a piece of land, after all, the amount paid and the recipient are completely omitted on a fully encrypted blockchain.
With zero-knowledge proofs, you can prove that a given amount was sent to a specific account without further transaction data being revealed.
Real applications outside the financial area are still, somewhat, hypothetical cases.
One of the biggest obstacles is the lack of access to reliable data about the real world.In the previous example, where we wanted to prove the appropriate age to access the website content, we would need to have an identical record on the blockchain (and we do not have that).
Other hypotheses to apply zero-knowledge proofs:
An investment fund could prove that its portfolio follows the rules set out in its bylaws without having to reveal the assets it owns.In a secret auction or bidding, since the highest bid could be chosen without the other bids being revealed.
A regular citizen could prove their right to vote in an election without having to reveal their identity, thus remaining anonymous.Another obstacle to the popularisation and wide access to this technique is still the computational cost.
In the beginning, the ZCash network took almost one minute of processing to generate proof of a transaction on a good computer.This time has been optimised, but it is still not a trivial operation.History shows, however, that those processing limitations are usually overcome in a few years.
Conclusion Regarding the perspectives of zero-knowledge proofs, it manages to combine privacy and usability, something unique that will surely attract more interested parties.For a more technical approach to this technique, see the doc about the subject available on the Stanford Code the Change .
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