Zero-knowledge proof will revolutionize privacy and trust in digital interactions. The Protocol Labs report reveals the shift to real-world business applications.
What is zero knowledge proof?
Zero-knowledge proof is a powerful cryptographic technique that allows parties to prove information without revealing underlying data. A new report released today by Protocol Labs shows that ZK proofs are reaching an inflection point as research projects transition into real business applications across industries.
Zero-knowledge proof allows one party, the prover, to demonstrate knowledge of certain information to another party, the verifier, without disclosing the actual data. This builds trust and improves privacy in digital interactions. For example, ZKPs can allow someone to prove that they have sufficient funds to make a purchase without disclosing their bank balance.
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The report points to large recent funding, more than $725 million invested by 2022, patent filings, increasing public interest and traction in core use cases such as blockchain, decentralized finance (defi) and machine learning as signs of momentum. It also explores technical challenges around efficiency, scalability and security assumptions.
âZK-proofs will help dissolve the boundaries between web2 and web3, especially within the identity space, as it is currently the only technology that covers both domains. More broadly, zk-proofs will greatly reduce computational complexity and help deliver truly high-performance blockchains.â
Kitty Horlick, director of blockchain interoperability development company Rarify Labs
Market projections for ‘zero-knowledge proof’
Cryptocurrencies like Zcash (ZEC) rely on ZKPs for private transactions. The report cites forecasts that the zero-knowledge proof market will reach $75 million in revenue by 2024 and exceed $10 billion by 2030, with nearly 90 billion proofs needed for web3 alone that year.
Researchers see particular promise in combining ZK evidence with artificial intelligence and machine learning models to enable training and use without exposing underlying data. Efficiency improvements such as recursive proofs make ZKPs more practical at scale.
After many years, we finally have efficient trial schedules. By efficient I mean that the calculation time versus the normal calculation time is getting closer. The closer we get, the more applications we can verify. By 2023, it will be close enough to verify blockchain transactions. And maybe in the future it can be closer to verifying every calculation.
Nicola Greco, a scientist at the distributed research laboratory CryptoNet
While there is much optimism, researchers are cautious about the work that remains to be done to address the limitations of computational complexity, scalability, security assumptions, and hardware needs. Standards development and education are also critical to their adoption.
Protocol Labs gathered input from more than a dozen teams across their 250+ enterprise innovation networks, advancing ZK-proofs and related technologies such as Polygon, StarkWare and Aleo. Researchers emphasized that real-world applications will drive evolution beyond the cryptosphere.
Read more: Zero-knowledge protocols and the emergence of a decentralization index