Zero Knowledge Proofs

Zero Knowledge Proofs allow one person to prove to another person that they know something, for example, a secret password, without revealing the details of what they know. This allows you to have gatekeepers who never have to know the password for the gate they are guarding. They are called “zero knowledge” proofs because you are demonstrating you have knowledge but revealing zero knowledge in the process.

For example, Alice wants to verify Bob has data that will return a particular hash if the data is fed into a specific cryptographic algorithm, the output of which is visible to Alice. Bob can submit his data to the algorithm and Alice can see whether it results in the desired hash or not, so Bob’s data meets Alice’s condition, she can verify this without seeing the data itself.

How are Zero Knowledge Proofs relevant to the Network State?

Zero-knowledge proofs can be used to regulate activity without intruding on privacy. Rather than requiring the citizen to subject their activity to scrutiny, data representing the activity can be fed, privately, into a cryptographic algorithm with a public output showing compliance or noncompliance without revealing the details of the activity. For instance, this method could reveal if a citizen paid taxes without revealing the details of their transactions.