On-chain privacy-preserving technologies such as zero-knowledge proofs have applications in areas such as financial services and healthcare, according to Google Cloud’s head of Web3 engineering.
Speaking at CCDAS 2023, James Tromans called ZK-proofs “particularly relevant in financial services and Web3 more broadly,” adding that “the idea that you’re going to put options contracts on the chain and the counterparties and the strike price and the imaginary and so on, which is visible to all, makes no sense.”
Zero-knowledge proofs are a cryptographic technique used to prove that something is known without exposing the known information.
The technology has become a focus of efforts to increase privacy within the chain; Ethereum co-founder Vitalik Buterin recently co-authored an article exploring how ZK-proofs could be applied to a privacy-preserving blockchain protocol that balances user anonymity with the need for regulatory compliance .
“If we’re going to live in a world where we put these types of deals on-chain – and not on a centralized exchange that has the responsibility of keeping that information safe and private – then we need extra privacy. preserving technologies that may not be widely produced and used today to solve these problems,” Tromans said. ZK-proofs, he added, “could be a way to achieve that.”
What are zero knowledge proofs?
Zero-knowledge proofs beyond token prices
At CCDAS, Google Cloud’s Tromans argued that ZK-proofs and other on-chain privacy technologies could have applications in areas like healthcare.
“I think this is relevant in other sectors, where a lot of the investment we’ve seen in Web3 in recent years – and obviously a lot of that has shifted to AI recently – will bear fruit beyond just this. speculation on token prices,” he said, pointing to technologies such as ZK proofs and multi-party calculations.
Vitalik Buterin pushes for ‘privacy pools’ to balance anonymity with regulatory compliance
Such technologies, Tromans noted, have broader applicability than blockchain. “We will see them in use in other places, and that will add value,” he said. “For me, Web3 is much more than just blockchain and decentralization of data.”
However, he cautioned that the oft-touted Web3 concept of users owning their own data may be overstated.
“I don’t believe we’ll suddenly see that companies won’t keep your data,” he said, adding: “Apart from the zero-knowledge proofs, we will still have to share our data with the companies. with whom we do business.” As companies “great service and [are] By adding value, customers will want to give them their data,” he said.
More broadly, Tromans added, Web3 adoption still has a long way to go, similar to large organizations’ “hard and still ongoing” transition to the public cloud.
“We’re talking about something that’s even less clear to these organizations, about how Web3 and blockchain will work for them,” he said. “They’re not going to make that transition and just use tools for what they did before – unless they can create new revenue streams and access new things that they didn’t do before.”