What is Zero-Knowledge Proof Technology—The Blockchain Innovation Gaining Momentum in the Web3 Industry?

Zero-knowledge proofs have regained momentum due to the spread of blockchain technology and the emergence of Web3. Web3 represents a decentralized internet operated without central authorities, and zero-knowledge proofs are recognized as a foundational technology in this new era. While privacy and scalability present ongoing challenges, zero-knowledge proofs are expected to drive innovation as a solution to these issues.

This article provides a comprehensive overview of “zero-knowledge proofs,” a blockchain technology attracting significant attention within the Web3 sector.

What Are Zero-Knowledge Proofs in Blockchain?

Blockchains are designed to ensure transaction transparency, but they also face privacy challenges. Zero-knowledge proofs have emerged as a key technology for protecting user confidentiality.

Zero-knowledge proofs enable a prover to convince a verifier that a statement is true—without revealing any sensitive information. Traditional authentication required sharing secrets like passwords or biometric data. With zero-knowledge proofs, the risk of leaking sensitive data is greatly reduced.

Originally developed in cryptography, zero-knowledge proofs have become far more practical through their integration with blockchain. They offer an effective solution for balancing privacy protection and security in decentralized environments.

Major blockchain use cases for zero-knowledge proofs include:

• Private Transactions: Zero-knowledge proofs allow parties to confirm transaction validity while keeping details confidential. This protects sensitive information and maintains transparency in both enterprise and personal financial transactions.

• Blockchain Scalability with zkEVM: zkEVM brings zero-knowledge proofs to the Ethereum Virtual Machine (EVM). It enables off-chain transaction processing, dramatically reducing main chain load—boosting speed and lowering costs.

• Decentralized Ownership of IDs and Data: Users can securely manage their own IDs and data without depending on centralized authorities. This is crucial for privacy protection and gives users total control over their information.

Zero-knowledge proofs have the potential to reshape blockchain’s future and are expected to expand into finance, healthcare, supply chain management, and more.

Types of Zero-Knowledge Proofs

This section details the two main zero-knowledge proof technologies: ZK-SNARKs and ZK-STARKs. Each has unique properties and is used according to application requirements.

ZK-SNARKs

ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge), introduced by Groth and Sahai in 2012, generate extremely compact proofs—as the "Succinct" name suggests.

Main features include:

• Small Proof Size: Proofs range from a few hundred bytes to several kilobytes, significantly reducing on-chain storage costs.

• Fast Verification: Proofs can be verified in milliseconds, enabling real-time transaction validation and improving user experience.

• High Versatility: Proofs can be generated for arbitrary computations, making ZK-SNARKs suitable for diverse applications.

ZK-SNARKs require an initial “trusted setup.” If secret parameters from this process aren’t properly discarded, security risks may arise.

These proofs are ideal for privacy-oriented applications—anonymous transactions, regulated data sharing, and healthcare record management—especially where small proof size and rapid verification are vital.

ZK-STARKs

ZK-STARKs (Zero-Knowledge Scalable Transparent Argument of Knowledge), introduced by Ben-Sasson and colleagues in 2018, eliminate the need for a trusted setup—hence “Transparent.”

Key features include:

• Fast Proof Generation: Proofs are generated faster than ZK-SNARKs—within tens to hundreds of milliseconds—making them ideal for high-volume transaction environments.

• High Transparency: Anyone can verify proofs, and trusted setup is unnecessary, reducing security risks and increasing reliability.

• Quantum Resistance: ZK-STARKs are designed to be secure against quantum attacks, giving them long-term viability as technology evolves.

ZK-STARKs tend to produce larger proofs than ZK-SNARKs, which can drive up storage costs.

They are best suited for applications demanding scalability and transparency, such as layer-2 solutions, DAOs, and voting systems, especially when processing large transaction volumes.

Non-Interactive vs. Interactive Zero-Knowledge Proofs

Zero-knowledge proofs are categorized as non-interactive or interactive, based on the communication method between prover and verifier—an important consideration in system design.

Non-interactive proofs allow the prover to generate a proof independently, which can then be reused for multiple verifiers. Key advantages include:

• High Efficiency: No real-time exchange is required, enabling efficient processing—especially valuable in decentralized systems.

• High Scalability: Multiple verifiers can independently validate a single proof, increasing system throughput and allowing simultaneous service to many users.

Interactive proofs involve several rounds of communication, where the verifier issues random challenges and the prover responds. Their benefits include:

• Smaller Proof Size: Interactive proofs can be more compact than non-interactive ones, which is valuable in bandwidth-constrained environments.

• Lower Computational Demand: Proofs can be generated quickly, allowing implementation on devices with limited resources.

Non-interactive zero-knowledge proofs are more widely used in blockchain, given their compatibility with asynchronous architectures.

Key Benefits of Zero-Knowledge Proofs

Zero-knowledge proofs offer three essential benefits that help solve blockchain’s core challenges and enable more practical systems.

Benefit 1: Enhanced Privacy Protection

Traditional blockchains expose all transactions, making privacy difficult. Zero-knowledge proofs verify transaction legitimacy while keeping transaction details confidential.

This is crucial in sectors like finance and healthcare, where privacy is paramount. Medical institutions, for instance, can securely manage patient records and selectively disclose only necessary information. Businesses can prove transaction validity without sharing details with competitors.

Zero-knowledge proofs also help combat money laundering and terrorist financing by verifying legitimacy and detecting suspicious patterns, supporting regulatory compliance and privacy balance.

Benefit 2: Improved Blockchain Scalability

Scalability has long been a challenge for blockchain. Zero-knowledge proofs enable off-chain transaction processing to address this issue effectively.

zkEVM, the zero-knowledge proof version of the Ethereum Virtual Machine, allows batch processing of transactions off-chain, with only proof of validity recorded on the main chain—dramatically reducing main chain load.

This approach solves Ethereum’s scalability problem, boosting speed by thousands of times and sharply reducing transaction fees—critical for high-frequency DeFi and NFT applications.

Benefit 3: Data Sovereignty

Interest in personal data ownership and management continues to grow. Zero-knowledge proofs let users manage their IDs and data independently of central authorities.

This minimizes data leakage risk and enables true user data sovereignty. Decentralized ID (DID) systems built with zero-knowledge proofs allow users complete control over their information.

For example, users can prove they are over 18 without revealing their birth date—sharing only minimal data required for service access and maximizing privacy protection.

Drawbacks of Zero-Knowledge Proofs

Despite their advantages, zero-knowledge proofs present implementation and operational challenges that require careful management.

Drawback 1: High Computational Cost

Zero-knowledge proofs involve advanced cryptographic calculations based on secret data, driving up computational costs compared to standard transactions.

Large data volumes can also increase proof size, leading to higher storage and bandwidth requirements—a challenge for resource-limited devices like mobiles and IoT hardware.

ZK-STARKs, for example, generate proofs much faster than ZK-SNARKs but are tens to hundreds of times larger, which can make them unsuitable for devices with limited storage.

Ongoing research is focused on reducing proof sizes and improving efficiency, resulting in gradual progress.

Drawback 2: Vulnerability to Quantum Computing

Many current zero-knowledge proofs rely on cryptographic techniques like elliptic curve cryptography, which quantum computers may eventually break.

Quantum computers excel at certain computations and threaten many traditional cryptographic methods. ZK-SNARKs, in particular, are believed to be vulnerable to quantum attacks.

ZK-STARKs, however, are designed to be quantum-resistant and are gaining attention for long-term security. Developing and adopting quantum-resistant zero-knowledge proof technologies will be increasingly important.

Real-World Applications of Zero-Knowledge Proofs

Zero-knowledge proofs are already being deployed in numerous projects. Two representative examples are highlighted below:

Application 1: Aztec Connect

Aztec Connect is a ZK-SNARKs-based privacy solution for anonymous transactions on Ethereum. It provides privacy-minded users with a secure, user-friendly way to transact anonymously.

With the Aztec Connect wallet, users can send and receive ERC-20 tokens anonymously. Sender, receiver, and amount remain confidential, and only the validity proof is recorded on-chain.

Aztec Connect combines high security with ease of use, letting anyone transact anonymously. It is also integrating with DeFi protocols, enabling private access to decentralized financial services.

This solution is a key choice for individuals and enterprises that prioritize privacy.

Application 2: Polygon zkEVM

Polygon zkEVM is a layer-2 solution leveraging ZK-SNARKs for scalability on the Polygon network. It is a major approach to solving Ethereum’s scalability challenges.

zkEVM is fully compatible with the Ethereum Virtual Machine, allowing developers to migrate existing smart contracts easily—enabling DApps to scale with minimal changes.

zkEVM achieves transaction speeds thousands of times faster than Ethereum’s main chain. Batch processing and zero-knowledge proof validation dramatically reduce main chain load.

Transaction fees are also much lower—sometimes just a tiny fraction of main chain costs—delivering major economic benefits to users.

Polygon zkEVM is being adopted in DeFi, NFTs, gaming, and more, fueling growth in the Ethereum ecosystem.

Conclusion: Zero-Knowledge Proofs Are Poised for Societal Adoption

This article covered the fundamentals, mechanisms, benefits, drawbacks, and real-world applications of zero-knowledge proofs—a blockchain technology gaining prominence in Web3. Zero-knowledge proofs make it possible to prove truth without disclosing secrets.

They offer solutions for privacy, scalability, and data sovereignty that were previously difficult to achieve on blockchains. While challenges remain—like high computational costs and potential quantum vulnerabilities—ongoing technical innovation continues to address these concerns.

Zero-knowledge proofs are already being applied in anonymous transactions and layer-2 solutions, and practical adoption is growing in finance, healthcare, supply chain management, digital identity, and other privacy-critical sectors.

As a foundational technology for the Web3 era, zero-knowledge proofs are set for widespread adoption. By enabling both privacy and transparency, they pave the way for a safer, more efficient digital society. Their evolution remains a key focus in blockchain’s advancement.

FAQ

What Is a Zero-Knowledge Proof? Explain the Basic Concept.

A zero-knowledge proof is a cryptographic method that allows proof of a statement’s truth without revealing the underlying secret. The prover convinces the verifier of confidential data’s validity without disclosing it. In blockchain, zero-knowledge proofs strengthen privacy and security.

How Do Zero-Knowledge Proofs Work?

Zero-knowledge proofs let someone prove they possess specific information without disclosing it. The prover demonstrates to the verifier that they hold the required data, validating authenticity while preserving privacy.

How Are Zero-Knowledge Proofs Used in Web3 and Blockchain?

Zero-knowledge proofs confirm transaction legitimacy while safeguarding privacy. They enable authentication without exposing personal information and are widely adopted for financial transactions and data sharing. They also support scalability, making them central to Web3.

How Do Zero-Knowledge Proofs Differ from Traditional Cryptography?

Zero-knowledge proofs allow validation of a claim without revealing secrets. Unlike conventional cryptography, which protects data through encryption, zero-knowledge proofs verify authenticity while fully preserving privacy.

What Are the Advantages and Disadvantages of Zero-Knowledge Proofs?

Advantages include verification without data disclosure, enhancing privacy and security. Disadvantages include high computational costs and complex implementation requirements.

How Do Zero-Knowledge Proofs Enhance Privacy Protection?

Zero-knowledge proofs allow proof of data authenticity without exposing personal information. They verify accuracy while safeguarding privacy, helping prevent sensitive data leaks in finance, healthcare, and other confidential sectors.

Which Blockchain Projects Use Zero-Knowledge Proofs?

Leading projects include Zcash, Starknet, zkSync, and Polygon Hermez. These solutions advance privacy and scalability and are growing rapidly in the blockchain sector.