Privacy Tech in Blockchain - Zero-knowledge Proofs
Users worried about their privacy and security may find Tor integration with bitcoin wallets and nodes to be very helpful.
Introduction to privacy-enhancing technologies
Goals and use cases
A group of tools, methods, and strategies known as privacy-enhancing technologies (PETs) are produced to safeguard the privacy of people and their data in a variety of situations, such as online communication, financial transactions, and identity management. PETs are designed to give users more control over their personal data and lower the likelihood of identity theft, surveillance, and data breaches.
These are some typical use cases for PETs:
- Anonymity: While chatting or transacting online, PETs can help users stay anonymous, shielding them from monitoring, tracking, and identity theft.
- Data security: By encrypting and securing sensitive data with PETs, you may guard against illegal access, modification, and theft.
- Identity management: PETs may be used to manage and safeguard digital identities, making sure that private data is only shared with those that need it and guarding against fraud and identity theft.
- Secure communications: PETs may be utilized to offer private and secure communication channels that are impervious to listening in and being intercepted.
Layered privacy approaches
In order to give consumers a high level of privacy and security, privacy-enhancing technologies (PETs) frequently employ layered privacy techniques. The goal behind “layered” privacy is to combine a variety of privacy-enhancing methods and technologies to offer a more complete and reliable privacy solution.
To give consumers a high level of privacy and anonymity when chatting and doing financial transactions online, for instance, a layered privacy strategy may include the usage of a VPN, a messaging app with end-to-end encryption, and a privacy-focused cryptocurrency.
Layered privacy strategies are particularly helpful when a single PET is not be able to secure users’ privacy adequately on its own. Users may build a more complete and strong privacy solution that is more challenging to break or bypass by combining numerous PETs.
Zero-knowledge proofs(ZKPs)
Definition and history
ZKPs are a sort of cryptographic protocol that enables one party (the prover) to demonstrate to another party (the verifier) that they are in possession of certain knowledge or information without disclosing the information itself. In other words, ZKPs provide someone with the ability to demonstrate their knowledge of something without really disclosing what that knowledge is.
The Knowledge Complexity of Interactive Proof-Systems, a 1985 study by Shafi Goldwasser, Silvio Micali, and Charles Rackoff, was the first to present the idea of ZKPs. Since then, ZKPs have developed into a crucial tool in contemporary cryptography and are employed in several applications, such as secure voting systems, cryptocurrency transactions, and digital identity verification. ZKPs use sophisticated mathematical algorithms to produce verifiable and irrefutable proofs. Based on the idea that it is computationally impossible to tell the difference between genuine and fabricated evidence, they are computationally indistinguishable.
In the realm of cryptocurrencies, ZKPs are used in one of the most well-known ways. Some cryptocurrencies, such as Zcash, use ZKPs to give consumers a high level of transactional privacy and anonymity. With the use of ZKPs, users can demonstrate their ownership of a given quantity of Bitcoin without disclosing who they are or how much they are sending.
ZK-SNARKs and ZK-STARKs
The two forms of zero-knowledge proofs that have received the most attention and application in recent years are ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) and ZK-STARKs (Zero-Knowledge Scalable Transparent Arguments of Knowledge).
ZK-SNARKs are a subset of ZKP that enable a prover to show that they are familiar with a certain piece of knowledge without divulging any more details. In the area of cryptocurrencies, they are employed to offer transactional privacy and anonymity, such as with the Zcash coin. Other applications, such as encrypted texting and digital identity verification, also make use of ZK-SNARKs.
Contrarily, ZK-STARKs are a more recent advancement in ZKP technology. They provide scalable, transparent, and effective zero-knowledge proofs, which makes them ideal for application in massively parallel systems like blockchains. ZK-STARKs do not need a trusted setup, which might be a possible weakness in some systems, unlike ZK-SNARKs. ZK-STARKs, on the other hand, are currently less efficient than ZK-SNARKs and require more computational power to generate proofs.
Both ZK-STARKs and ZK-SNARKs have significant uses in the field of cryptography, and it is expected that they will continue to have a significant impact on the creation of private and secure systems in the future.
Applications in blockchain
Blockchain technology has several significant uses for zero-knowledge proofs (ZKPs), notably in the areas of privacy and scalability. Here are a few illustrations:
Private transactions: ZKPs are a tool that may be used to enable private cryptocurrency transactions. For instance, the cryptocurrency Zcash makes use of ZK-SNARKs to let users execute transactions without disclosing any details about the transaction, such as the amount transferred or the identities of the persons involved.
Privacy-preserving smart contracts: Smart contracts with privacy protection can also be made possible via ZKPs. As a result, smart contracts may be carried out without disclosing any information about the transaction to anybody other than those directly engaged.
Scalability: Blockchain scalability may be increased by the usage of ZKPs. ZKPs can aid in shrinking the blockchain’s size and enhancing its scalability by lowering the amount of data that must be kept there.
Verification of authenticity and identification: Without disclosing any further information, ZKPs may be used to validate the veracity of a piece of data or to confirm the identity of a person. This can lessen fraud and unlawful access while enhancing the security of blockchain-based systems.
ZKPs offer a variety of significant uses for blockchain technology overall, especially in the areas of scalability and privacy. ZKPs are anticipated to become more crucial as the blockchain industry expands and changes, contributing to the creation of private and secure blockchain-based systems.
Other privacy-enhancing technologies
Coin mixing (CoinJoin, TumbleBit, etc.)
The goal of coin mixing is to increase the privacy and anonymity of cryptocurrency transactions. The main idea of coin mixing is to combine multiple transactions into one, making it difficult to trace the flow of funds and link specific transactions to individual users. Coin mixing technologies come in various forms, including CoinJoin and TumbleBit. With CoinJoin, multiple users can combine their transactions into a single transaction, making it difficult to identify the original senders and receivers of the funds. TumbleBit employs a more complex mixing process involving multiple servers to create anonymous transactions.
Although they both have various restrictions, CoinJoin and TumbleBit can both increase the secrecy and anonymity of bitcoin transactions. For instance, it might be challenging to obtain the amount of user coordination needed for CoinJoin. On the other hand, TumbleBit can be less effective because of its greater complexity and need for several servers.
Confidential transactions
Confidential transactions are another sort of privacy-enhancing technology that can increase the secrecy and confidentiality of bitcoin transactions. Confidential transactions’ fundamental premise is to conceal the transaction value while enabling the transaction to be authenticated. The transaction amount of a typical bitcoin transaction is shown publicly on the blockchain. Nevertheless, with confidential transactions, a cryptographic method known as homomorphic encryption is used to mask the transaction value. In other words, the transaction amount is still present, but it is encrypted so that it may still be validated as legitimate without disclosing the real amount. Confidential transactions can aid in preserving the privacy and secrecy of users’ financial transactions by concealing the transaction value. This might be crucial in circumstances where users would not want other people to know how much money they are sending or receiving, such as in business transactions or charitable donations.
Mimblewimble protocol
A privacy-enhancing technology called Mimblewimble was initially proposed in 2016 as a way to make Bitcoin transactions more private and scalable. Given that the protocol’s objective is to make transactions difficult to track, it seems sensible that it was named after a tongue-tying spell from the Harry Potter books.
The usage of confidential transactions, which we covered before, and a method called cut-through, which enables outdated transaction data to be removed from the blockchain, are two of the fundamental concepts on which Mimblewimble is built. Scalability is enhanced as a result of the blockchain’s reduced size.
The use of CoinJoin in Mimblewimble enables transactions to be aggregated and “blinded.” This means that many transactions are consolidated into a single transaction, making it difficult to link specific transactions to individual users. Furthermore, the blinding procedure allows for private transactions, which hide transaction amounts.
Onion routing and Tor integration
Internet data, including cryptocurrency transactions, may be made anonymous using the privacy-enhancing technology known as “onion routing.” In order to make it difficult to track network data back to its source, onion routing basically involves routing it across a number of nodes.
The term “onion routing” refers to the way that network communication is encrypted using a number of different levels, similar to an onion. When the traffic moves through each node and eventually reaches its destination, each layer is peeled away. This makes it difficult for anyone intercepting the communication to determine its source, target, or content.
Using the Tor network is one-way onion routing may be used with cryptocurrency. Using onion routing and the Tor network, a well-known anonymous communication system, users’ IP addresses and web browsing activities may be concealed. Users can conduct transactions in the bitcoin space anonymously and without disclosing their IP addresses by connecting Tor with a wallet or node.
Users worried about their privacy and security may find Tor integration with bitcoin wallets and nodes to be very helpful. For instance, it can assist in shielding users from snooping, censorship, or hacking efforts. It should be emphasized, nevertheless, that utilizing Tor for bitcoin transactions carries certain extra dangers, such as the possibility of network congestion or slower transaction times. Moreover, for security purposes, certain bitcoin exchanges or services may restrict Tor communication.
レッスン1:Privacy's Importance in Crypto Industry: Overview
レッスン2:Privacy-focused Cryptocurrencies
レッスン3:Privacy Tech in Blockchain - Zero-knowledge Proofs
レッスン4:Practices for Maintaining Privacy When Using Crypto
レッスン5:Ethical Considerations in Crypto and Privacy
Privacy Tech in Blockchain - Zero-knowledge Proofs
Users worried about their privacy and security may find Tor integration with bitcoin wallets and nodes to be very helpful.
Introduction to privacy-enhancing technologies
Goals and use cases
A group of tools, methods, and strategies known as privacy-enhancing technologies (PETs) are produced to safeguard the privacy of people and their data in a variety of situations, such as online communication, financial transactions, and identity management. PETs are designed to give users more control over their personal data and lower the likelihood of identity theft, surveillance, and data breaches.
These are some typical use cases for PETs:
- Anonymity: While chatting or transacting online, PETs can help users stay anonymous, shielding them from monitoring, tracking, and identity theft.
- Data security: By encrypting and securing sensitive data with PETs, you may guard against illegal access, modification, and theft.
- Identity management: PETs may be used to manage and safeguard digital identities, making sure that private data is only shared with those that need it and guarding against fraud and identity theft.
- Secure communications: PETs may be utilized to offer private and secure communication channels that are impervious to listening in and being intercepted.
Layered privacy approaches
In order to give consumers a high level of privacy and security, privacy-enhancing technologies (PETs) frequently employ layered privacy techniques. The goal behind “layered” privacy is to combine a variety of privacy-enhancing methods and technologies to offer a more complete and reliable privacy solution.
To give consumers a high level of privacy and anonymity when chatting and doing financial transactions online, for instance, a layered privacy strategy may include the usage of a VPN, a messaging app with end-to-end encryption, and a privacy-focused cryptocurrency.
Layered privacy strategies are particularly helpful when a single PET is not be able to secure users’ privacy adequately on its own. Users may build a more complete and strong privacy solution that is more challenging to break or bypass by combining numerous PETs.
Zero-knowledge proofs(ZKPs)
Definition and history
ZKPs are a sort of cryptographic protocol that enables one party (the prover) to demonstrate to another party (the verifier) that they are in possession of certain knowledge or information without disclosing the information itself. In other words, ZKPs provide someone with the ability to demonstrate their knowledge of something without really disclosing what that knowledge is.
The Knowledge Complexity of Interactive Proof-Systems, a 1985 study by Shafi Goldwasser, Silvio Micali, and Charles Rackoff, was the first to present the idea of ZKPs. Since then, ZKPs have developed into a crucial tool in contemporary cryptography and are employed in several applications, such as secure voting systems, cryptocurrency transactions, and digital identity verification. ZKPs use sophisticated mathematical algorithms to produce verifiable and irrefutable proofs. Based on the idea that it is computationally impossible to tell the difference between genuine and fabricated evidence, they are computationally indistinguishable.
In the realm of cryptocurrencies, ZKPs are used in one of the most well-known ways. Some cryptocurrencies, such as Zcash, use ZKPs to give consumers a high level of transactional privacy and anonymity. With the use of ZKPs, users can demonstrate their ownership of a given quantity of Bitcoin without disclosing who they are or how much they are sending.
ZK-SNARKs and ZK-STARKs
The two forms of zero-knowledge proofs that have received the most attention and application in recent years are ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) and ZK-STARKs (Zero-Knowledge Scalable Transparent Arguments of Knowledge).
ZK-SNARKs are a subset of ZKP that enable a prover to show that they are familiar with a certain piece of knowledge without divulging any more details. In the area of cryptocurrencies, they are employed to offer transactional privacy and anonymity, such as with the Zcash coin. Other applications, such as encrypted texting and digital identity verification, also make use of ZK-SNARKs.
Contrarily, ZK-STARKs are a more recent advancement in ZKP technology. They provide scalable, transparent, and effective zero-knowledge proofs, which makes them ideal for application in massively parallel systems like blockchains. ZK-STARKs do not need a trusted setup, which might be a possible weakness in some systems, unlike ZK-SNARKs. ZK-STARKs, on the other hand, are currently less efficient than ZK-SNARKs and require more computational power to generate proofs.
Both ZK-STARKs and ZK-SNARKs have significant uses in the field of cryptography, and it is expected that they will continue to have a significant impact on the creation of private and secure systems in the future.
Applications in blockchain
Blockchain technology has several significant uses for zero-knowledge proofs (ZKPs), notably in the areas of privacy and scalability. Here are a few illustrations:
Private transactions: ZKPs are a tool that may be used to enable private cryptocurrency transactions. For instance, the cryptocurrency Zcash makes use of ZK-SNARKs to let users execute transactions without disclosing any details about the transaction, such as the amount transferred or the identities of the persons involved.
Privacy-preserving smart contracts: Smart contracts with privacy protection can also be made possible via ZKPs. As a result, smart contracts may be carried out without disclosing any information about the transaction to anybody other than those directly engaged.
Scalability: Blockchain scalability may be increased by the usage of ZKPs. ZKPs can aid in shrinking the blockchain’s size and enhancing its scalability by lowering the amount of data that must be kept there.
Verification of authenticity and identification: Without disclosing any further information, ZKPs may be used to validate the veracity of a piece of data or to confirm the identity of a person. This can lessen fraud and unlawful access while enhancing the security of blockchain-based systems.
ZKPs offer a variety of significant uses for blockchain technology overall, especially in the areas of scalability and privacy. ZKPs are anticipated to become more crucial as the blockchain industry expands and changes, contributing to the creation of private and secure blockchain-based systems.
Other privacy-enhancing technologies
Coin mixing (CoinJoin, TumbleBit, etc.)
The goal of coin mixing is to increase the privacy and anonymity of cryptocurrency transactions. The main idea of coin mixing is to combine multiple transactions into one, making it difficult to trace the flow of funds and link specific transactions to individual users. Coin mixing technologies come in various forms, including CoinJoin and TumbleBit. With CoinJoin, multiple users can combine their transactions into a single transaction, making it difficult to identify the original senders and receivers of the funds. TumbleBit employs a more complex mixing process involving multiple servers to create anonymous transactions.
Although they both have various restrictions, CoinJoin and TumbleBit can both increase the secrecy and anonymity of bitcoin transactions. For instance, it might be challenging to obtain the amount of user coordination needed for CoinJoin. On the other hand, TumbleBit can be less effective because of its greater complexity and need for several servers.
Confidential transactions
Confidential transactions are another sort of privacy-enhancing technology that can increase the secrecy and confidentiality of bitcoin transactions. Confidential transactions’ fundamental premise is to conceal the transaction value while enabling the transaction to be authenticated. The transaction amount of a typical bitcoin transaction is shown publicly on the blockchain. Nevertheless, with confidential transactions, a cryptographic method known as homomorphic encryption is used to mask the transaction value. In other words, the transaction amount is still present, but it is encrypted so that it may still be validated as legitimate without disclosing the real amount. Confidential transactions can aid in preserving the privacy and secrecy of users’ financial transactions by concealing the transaction value. This might be crucial in circumstances where users would not want other people to know how much money they are sending or receiving, such as in business transactions or charitable donations.
Mimblewimble protocol
A privacy-enhancing technology called Mimblewimble was initially proposed in 2016 as a way to make Bitcoin transactions more private and scalable. Given that the protocol’s objective is to make transactions difficult to track, it seems sensible that it was named after a tongue-tying spell from the Harry Potter books.
The usage of confidential transactions, which we covered before, and a method called cut-through, which enables outdated transaction data to be removed from the blockchain, are two of the fundamental concepts on which Mimblewimble is built. Scalability is enhanced as a result of the blockchain’s reduced size.
The use of CoinJoin in Mimblewimble enables transactions to be aggregated and “blinded.” This means that many transactions are consolidated into a single transaction, making it difficult to link specific transactions to individual users. Furthermore, the blinding procedure allows for private transactions, which hide transaction amounts.
Onion routing and Tor integration
Internet data, including cryptocurrency transactions, may be made anonymous using the privacy-enhancing technology known as “onion routing.” In order to make it difficult to track network data back to its source, onion routing basically involves routing it across a number of nodes.
The term “onion routing” refers to the way that network communication is encrypted using a number of different levels, similar to an onion. When the traffic moves through each node and eventually reaches its destination, each layer is peeled away. This makes it difficult for anyone intercepting the communication to determine its source, target, or content.
Using the Tor network is one-way onion routing may be used with cryptocurrency. Using onion routing and the Tor network, a well-known anonymous communication system, users’ IP addresses and web browsing activities may be concealed. Users can conduct transactions in the bitcoin space anonymously and without disclosing their IP addresses by connecting Tor with a wallet or node.
Users worried about their privacy and security may find Tor integration with bitcoin wallets and nodes to be very helpful. For instance, it can assist in shielding users from snooping, censorship, or hacking efforts. It should be emphasized, nevertheless, that utilizing Tor for bitcoin transactions carries certain extra dangers, such as the possibility of network congestion or slower transaction times. Moreover, for security purposes, certain bitcoin exchanges or services may restrict Tor communication.