Zero-Knowledge Proofs: A Beginner's Guide

Imagine being able to:

Login to websites without worrying about your password getting hacked
Get approved for a loan without revealing your salary
Confirm you’re under 30 to receive a grant without revealing your date of birth

This is all possible thanks to the power of Zero-Knowledge Proof (ZKP) technology. ZKPs are incredible tools for protecting data privacy and security in a world that demands greater data transparency. By enabling users to prove the accuracy of their data without revealing it, ZKPs give individuals and organizations assurance that their information is safe. They open up new opportunities for businesses in various industries that could not have been previously achieved due to privacy concerns.

If you’re less familiar with Zero-Knowledge Proof technology, we’ll go over what it is, how it works, the game-changing benefits for individuals and organizations, use cases, and Dock’s implementation of the technology.

What Are Zero-Knowledge Proofs (ZKPs)?

Dock Wallet has Zero-Knowledge Proof capability

Zero-Knowledge Proofs are a technology in online security that enables the verification of information without revealing the information itself. This ensures that your data is always secure and protected from other people or malicious actors. Using Zero-Knowledge Proofs creates a safer, more private internet experience.

Zero-Knowledge Proof is sometimes referred to as a zero-knowledge protocol. A protocol is a set of rules or methods used to carry out these secret-keeping processes without showing the actual information. The concept of ZKPs was first introduced in the 1985 paper "The Knowledge Complexity of Interactive Proof Systems" by Shafi Goldwasser, Silvio Micali, and Charles Rackoff.

The paper’s definition of a Zero-Knowledge Proof is “a method by which one party (the prover) can prove to another party (the verifier) that something is true, without revealing any information apart from the fact that this specific statement is true." Since then, ZKPs have improved and developed from being a purely theoretical concept to being able to be used in real applications including secure communications, electronic voting, access control, and gaming.

Zero-Knowledge Proofs Cryptography

Zero-Knowledge Proofs are a cryptography technique. Cryptography is the science of using codes to make information secret. It's like transforming a regular message (or data) into a secret code, and then, when needed, decoding it back into its original form. By doing so, only the person who knows how to decode it can understand the real message.

For example, imagine you and your best friend passed secret notes in class, but you had a special way of writing them so that even if someone else took the note, they couldn't understand it. This is the essence of cryptography.

How Do Zero-Knowledge Proofs Enhance Privacy and Security Online?

1) Secure Digital Identity Verification
In today's digital age, proving one's identity online is crucial for many services, from banking to online shopping. Traditional methods often require users to share personal information, which, if intercepted, could lead to identity theft. With ZKPs, users can confirm their identity without revealing any personal data, ensuring only the right entities recognize them without the risk of exposing sensitive details.

2) Data Protection

Companies often need to validate data without wanting the liability of accessing sensitive details. Zero-Knowledge Proofs enable them to verify the data's authenticity without ever seeing the actual information.

3) Secure Transactions

When making online transactions, Zero-Knowledge Proofs can help ensure the parties involved have the necessary credentials or funds without revealing account details.

Zero-Knowledge Proof Examples

Medical records stay private with Zero-Knowledge Proof tech

Zero-Knowledge Proofs can be applied to many use cases in a variety of industries, especially in those where data integrity and accuracy is crucial.

Here are just a few examples of how ZKPs can be used:

Healthcare records: ZKPs are a powerful tool for protecting sensitive healthcare data as they allow healthcare providers to validate records without exposing patient information.

Mortgage loans: A mortgage applicant could prove that their salary is within a certain range without revealing the exact figure.

Online voting systems: ZKPs can be used in decentralized voting systems to validate votes without having to reveal who voted for what option.

Network security and authentication: ZKPs can be used to secure networks by authenticating users without revealing their passwords or other credentials.

Digital signatures: ZKPs are necessary for ensuring the accuracy and integrity of digital signatures on blockchain networks.

Why Are Zero-Knowledge Proofs Important for Organizations and Individuals?

Zero-Knowledge Proof helps organizations comply with data regulations

Advantages for Organizations

Until recent times, to prove a claim, we have relied dominantly on physical documents like a passport to prove that you are a citizen of a country or driver’s license to show that you are qualified to drive. Some of the main problems with this is that physical documents can easily be faked, they reveal more information about people than is needed to process a transaction, and the information stored on centralized third party databases that are vulnerable to hacks.

Data Compliance

Because ZKPs allow for the verification of data without ever revealing its contents, this helps companies comply with data regulation as sensitive information remains private. ZKPs can give businesses the confidence to share information without worrying about its privacy or security.

Interoperability

Zero-Knowledge Proofs enable interoperability by allowing for the exchange of data between different systems and platforms in a secure manner.

Identity Verification

ZKPs can be used to help with identity verification by allowing verifiers to securely access and verify the identity of users without having access to their actual data. This is particularly useful in industries such as banking where user authentication is important but sensitive information needs to remain private.

Advantages for Individuals

Zero-Knowledge Proof technology enables selective disclosure.

The concept of Self-Sovereign Identity (SSI) is about giving individuals control over their own digital identity. Instead of relying on centralized entities (like governments, corporations, or social media platforms) to validate and store someone’s identity, Self-Sovereign Identity lets individuals own, control, and share their identity without intermediaries.

By marrying Self-Sovereign Identity with Zero-Knowledge Proof credentials, people can navigate the digital world with an identity that they control, and sharing only what's necessary. This combination paves the way for a more user-centric, private, and decentralized digital identity ecosystem.

ZKPs enable the key principles of Self-Sovereign Identity in these ways:

Decentralization: Traditional ID systems often involve a central authority that verifies and issues credentials. With ZKPs, credentials can be issued, held, and verified by the individual, aligning with the decentralized principle of SSI.

Selective Disclosure: With Zero-Knowledge Proof credentials, people can choose exactly what information they share, rather than handing over a whole ID card or document. This is crucial for SSI where users should only share the minimum required data for any transaction.

Interoperability: ZKP systems can be designed to be interoperable. This means that the credentials that someone receives in one place can be used and verified in multiple other places, supporting the broad and flexible use of identity in an SSI system.

Fraud Prevention: Since ZKPs can validate the accuracy of a claim without revealing the data behind it, they reduce the risk of identity theft and fraudulent use. If there's no personal data exchanged, there's less data to steal or misuse.

Businesses Currently Using ZKP Technology

Here are a few companies that are using ZKP technology:

JPMorgan Chase

The financial giant introduced Quorum, a modified version of Ethereum. It's a blockchain solution that uses Zero-Knowledge Proofs to provide enhanced privacy features, which enables the execution of private transactions.

EY (Ernst & Young)

One of the Big Four accounting firms, EY, launched its EY Ops Chain Public Edition prototype, which is the world’s first implementation of Zero-Knowledge Proof technology on the public Ethereum blockchain. The intention is to allow companies to securely and privately transact on a shared public ledger.

ING Bank

ING’s blockchain team implemented a Zero-Knowledge Range Proof (ZKRP) solution that aims to enhance confidentiality on public ledgers, which is essential for financial services.

Zcash

Zcash, a cryptocurrency, integrates ZKP technology, specifically the ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) to ensure transactions are confirmed and secure while keeping the sender, receiver, and transaction amount private.

How Zero-Knowledge Proof Works

Zero-Knowledge Proof works by having two parties, the Prover and the Verifier.

The Prover sends a statement to the Verifier without revealing any of the credential contents such as:

“I am a citizen of this country”
“I am over 18 years old”
“I have completed my university degree”
“I own this house”

The Verifier then uses special mathematical algorithms to validate the statement without ever seeing it. If the statement is proven true, then it can be accepted without compromising any of the associated data. Think of a mathematical algorithm like a recipe in cooking. It's a set of step-by-step instructions that, when followed correctly, gives you a desired result. In this case, instead of a delicious dish, the outcome is the validation of the statement.

Zero-Knowledge Protocol Criteria

A protocol is a set of rules that are followed when two or more parties are communicating. With ZKPs, the protocol is used to verify that a statement is true without either party revealing any confidential information. Essentially, the protocol will require a prover to demonstrate they have the correct data without actually showing it to the verifier.

Zero-Knowledge Protocols (ZKP) must meet three main criteria to be secure:

Completeness: Completeness states that if the prover provides a valid proof, then the verifier will accept it as valid.
Soundness: Ensures that if a false statement is provided, then it will be rejected by the verifier. A prover can’t trick a verifier that an invalid statement is valid.
Zero-knowledgeness: Neither party has access to any confidential information during the process.

Dock’s Zero-Knowledge Proof Credentials Technology

Dock’s Zero-Knowledge Proof technology enables users to have the following five capabilities:

1. Selective Disclosure

Selective Disclosure is a privacy tool that allows users to share selective information within a credential instead of presenting all of the details on the credential.

Selective Disclosure Use Case Examples:

A customer can prove to a business that she is a university student to get a student discount by showing the name of her university without revealing her full name, student number, or any other details on her digital credential.
A resident proves that he lives in an eligible city for a contest without revealing other unnecessary details on his driver’s license.
A man at a bar needs to prove that he’s over 18. With Selective Disclosure, he shows that he is over 18 without showing unnecessary details on his identity credential besides his birth date.

2. Range Proofs

A Range Proof is a cryptographic method that allows a party to prove that a number or value lies within a specified range without revealing the actual number or value.

Range Proofs Use Case Examples

There’s a special club for people between the ages of 20 and 25. Using Range Proofs, you can let the club know you're in that age group, but without telling them if you're 21, 23, or any specific age.
There’s a special bank offer for people who earn between $50,000 and $60,000 a year. With Range Proofs, you can show the bank you qualify without having to show your exact paycheck.
Someone is applying for a housing grant that's only available to households with a monthly income between $3,000 and $5,000. Using a Range Proof, you can prove that your income falls within this range without having to reveal your exact monthly earnings, thus maintaining your financial privacy while still confirming eligibility.

3. Verifiable Encryption

Verifiable Encryption is like using a special kind of lock on your personal information that only certain people, like regulators, have the key to open. Verifiable Encryption is a way to securely share your information, knowing that only specific trusted parties can access the actual details when necessary. This function is available at the blockchain level on Dock's platform.

Verifiable Encryption Use Case Examples

Vehicle registrations: A person sells a car using an online platform. The VIN (Vehicle Identification Number) and ownership history might be encrypted in such a way that potential buyers know the information is legitimate, but can't see the specifics. Only traffic authorities could decrypt and view the full history if required.
Estate and property records: When transferring property rights using a digital platform, details of previous owners and property histories might be encrypted. This ensures that while users can verify the legitimacy of a property listing, they can't access specific details. Only authorized land registry officials can decrypt and view the comprehensive property history when necessary.
Financial transactions: A user might make transactions using a digital wallet. Details of these transactions are encrypted such that the wallet service can't view the specifics. But a financial regulator, if given a valid reason, can access and decrypt transaction details to ensure compliance with financial laws.

4. Threshold Anonymous Credentials

Threshold Anonymous Credentials are a cryptographic method where credentials are co-issued by a group of entities. For a credential to be considered valid, a predetermined number (or threshold) of these entities must agree. This function is available at the blockchain level on Dock's platform.

Threshold Anonymous Credentials Use Case Examples

Product approvals in sensitive industries: When it comes to industries such as pharmaceuticals or chemicals, obtaining approval from regulatory bodies assures that the products are up to industry standards. By using Threshold Anonymous Credentials, a product could be mandated to receive approval not just from one, but a certain number of regulatory entities. So before a product hits the market, it has to meet rigorous checks from multiple agencies, instilling higher trust in the end consumer.
Health and safety audits: Safety inspections are crucial in fields like manufacturing and construction. These inspections verify that an environment aligns with health and safety regulations. By integrating Threshold Anonymous Credentials, a workplace inspection might require sign-offs from multiple inspectors for a credential to be valid and issued. Such a comprehensive evaluation can lead to enhanced workplace safety and a substantial reduction in accidents.
Democratic petition systems: Petitions are a powerful tool in the democratic process, allowing groups to rally around a cause or decision. With Threshold Anonymous Credentials, a petition could require a certain number of individuals to validate it, ensuring collective agreement. Such an approach democratizes decisions further, ensuring they aren't swayed by a mere handful but reflect a broader consensus.

5. Custom Conditions

Credential verifiers can check that specific credential attributes satisfy certain required conditions without learning the attributes themselves.

Custom Conditions Use Case Examples

Safety training requirements: A local developer asks construction job applicants to prove that they have a valid Fall Arrest training certificate from ABC Training (issuer).
Specific degree accepted: A communications position requires applicants to have either a bachelor degree in communications.
Food safety: A restaurant hiring for a chef position wants applicants to demonstrate they have a Food Handling and Safety Certificate issued by the National Culinary Institute.

Zero-Knowledge Proofs Blockchain

Think of a public blockchain as a big digital ledger or notebook that everyone can see and write in. It's like a communal bulletin board in a town square. When someone wants to post a message (or in this case, a transaction), they stick it on the board. Once it's there, it can't be erased or changed, and everyone can see it. Just like anyone can walk up to the bulletin board and read the messages, anyone can join and view the transactions on a public blockchain. It's open to everyone, making it "public."

ZKPs are often spoken about in mainstream media in relation to blockchain. But ZKPs don’t necessarily require blockchain to be implemented. Rather, the application of ZKPs for blockchain use cases is just one of many examples of how ZKP technology can be used.

In regards to blockchain, while they are known for their transparency, making every transaction visible to all participants, there are situations in which businesses or individuals might need to validate a transaction's legitimacy without revealing its details. ZKPs provide a solution to this paradox, enabling privacy on the transparent blockchain platforms. Even though blockchain applications involve public networks, users can still keep their information private.

Examples of ZKP Use Cases That Don’t Require Blockchain

Online Authentication: ZKPs can be used for passwordless logins. Instead of sending a password to a server for verification, a user can simply prove they know the password using a Zero-Knowledge Proof, without ever revealing the actual password.

Credit Checks: Financial institutions could use ZKPs to confirm if a client is creditworthy without accessing the detailed financial history. A client could prove they have never defaulted on a loan or their income falls within a certain range, all without revealing exact numbers or other financial details.

Digital Identity Verification: ZKPs can be used in identity systems to validate someone's age, citizenship, or other attributes without disclosing the actual details.

Data Sharing with Privacy: Imagine a medical research project where researchers need to know if patients have certain conditions without accessing personal details. Patients could use ZKPs to confirm they fit the criteria without exposing their personal health data.

Dock’s Zero-Knowledge Proof Implementation

Dock, a pioneer in developing digital identity and Verifiable Credential technology, has always prioritized security and privacy. In a world where data privacy and security are essential, Dock's Zero-Knowledge Proof implementation offers a modern solution for users and businesses. It's an innovative approach that balances the need for data validation with the importance of personal privacy.

How Dock Uses ZKPs

Dock uses Zero Knowledge Proofs to provide users with the ability to validate the authenticity of digital information without revealing the details. So whenever someone shares a credential, the receiver can be assured of its validity and authenticity without needing to see all the details.

The Role of Public Keys

An integral part of Dock's ZKP framework revolves around public keys, which are stored on the Dock blockchain. The public keys are used to verify information using ZKP tech. To understand how public keys work, imagine you have a special lockbox with two keys: one to lock it (the public key) and one to unlock it (the private key). If you want to prove to someone that you own something inside that lockbox, you might give them a copy of the lock (public key). They can't access the contents with this lock, but they can use it to see if the box closes securely.

In the world of Verifiable Credentials, a public key acts like this lock. It allows others to verify that a digital credential, like a digital ID or certificate, is genuinely issued by you and hasn't been tampered with. The private key, which you keep secret, is what you use to create these credentials in the first place. The public key, shared with others, lets them confirm its authenticity without revealing the inner details or your private key.

So when someone shares a credential, the verifier such as an employer uses the public key to confirm its authenticity. It's a robust and secure method that ensures only authentic data is acknowledged, while fake or tampered data is easily spotted.

Conclusion

In today's digital age, the need for privacy and data security cannot be overstated. Zero-Knowledge Proofs (ZKPs) offer a revolutionary approach to achieving this and benefits for both individuals and businesses. They ensure that information can be verified without being revealed, safeguarding user data while allowing for necessary validations.

Docks’ Zero-Knowledge Proof technology enables selective disclosure, range proofs, custom conditions, verifiable encryption, and threshold anonymous credentials. For organizations, ZKPs can be a key tool in their data compliance toolbox, enable interoperability, and verify identities while preserving user privacy.

About Dock

Dock’s Verifiable Credential platform makes any data fraud-proof and instantly verifiable. It comprises the Certs API, the Certs no-code web app, an ID wallet and a dedicated blockchain. Using Dock, organizations reduce data verification costs while increasing the operational efficiency of verifying and issuing digital credentials. Individuals can fully control their data to access products and services more conveniently in a privacy-preserving way. Dock has been a leader in decentralized digital identity technology since 2017 and trusted by organizations in diverse sectors, including healthcare, finance, and education.