From privacy coins to glowing iris-scanning orbs, zero-knowledge proofs have become synonymous with cryptography, scalability, and privacy.
In 2022, investors gave over $700 million in funding for companies pushing the boundaries with proofs of zero knowledge. This year, ZK-proofs has undoubtedly become one of the the biggest blockchain trendswith several major Ethereum scaling protocols on mainnet.
ZK proofs are a cryptographic protocol that allows one party to prove the truth of a statement to another party without sharing the contents of the statement.
An often cited example is proving to a bartender that you are old enough to drink without showing your ID or even telling them your date of birth.
Well, it seems that Satoshi Nakamoto, the pseudonymous creator of Bitcoinonce found the technology quite interesting.
A better version of Bitcoin
In August 2010, user “Red” on the online forum Bitcointalk request if there could be a way to improve the privacy of Bitcoin transactions.
“One of the things that bothers me about Bitcoin is that the entire transaction history is completely public,” the forum user said. Another member chimed in, suggesting that zero-knowledge proofs might be the solution.
“It’s a very interesting topic,” Nakamoto responded.
“If a solution were found, a much better, simpler and more practical implementation of Bitcoin would be possible.”
However, Nakamoto was not convinced the technology could solve the problem of “double spending” – a fundamental flaw that exists in all digital money protocols where a bad actor can spend the same digital tokens more than once .
“It is the need to verify the absence of double spending that requires comprehensive knowledge of all transactions,” Nakamoto said.
“It’s difficult to think about how to apply zero-knowledge proofs in this case. We are trying to prove the absence of something, which seems to require knowing everything and verifying that something is not included,” he argued.
Years later, someone cracks the code
Little did Nakamoto know that the cypherpunks would eventually find a way to solve the problem.
The privacy-focused cryptocurrency Zcash was launched in October 2016 by Electric Coin, a company made up of computer scientists from Bitcoin’s formative years. Zcash was built by modifying the original Bitcoin source code.
It was also the first time zero-knowledge proofs were used in a true peer-to-peer cryptocurrency, allowing users to hide or protect the crypto wallet address sending or receiving funds.
The founding scientist of Zcash, Eli Ben-Sassonwould go on to found StarkWare, a company known today for using zero-knowledge proofs to scale Ethereum via rollups.
Ben-Sasson told Magazine that Bitcoin core developers’ early enthusiasm for ZK proofs played a “central role” in his eventual co-founding of StarkWare.
“The 2013 Bitcoin Conference in San Jose marked my Eureka moment.”
“Mike Hearn, then a Bitcoin developer and an early adopter of Bitcoin, went so far as to declare my speech on ZK proofs as the most crucial of the event because of its potential impact on the future of blockchain .”
“That’s where I realized the transformative potential of the validity evidence I was developing,” says Ben-Sasson.
Fast forward to today, Bitcoin itself is now ready to enter the world of ZK proofs.
ZeroSync, a nonprofit founded by three computer scientists (and sponsored by StarkWare), is developing the world’s first ZK thin client for Bitcoin.
“In the long term, we hope to bring massive scalability to Bitcoin using STARK Proofs.” said Robin Linus, co-founder of ZeroSync.
Linus said that ZeroSync designed and is currently implementing a Layer 2 protocol that could enable Bitcoin to process over 100 transactions per second while bringing privacy properties to Bitcoin.
“This could be a major feat in bringing Bitcoin to the scalability it needs.”
So what would Nakamoto think?
“It’s clear from Satoshi’s past remarks that he was strongly in favor of using ZK proofs for privacy,” says Ben-Sasson.
Nakamoto was a fan of anonymity. His public interactions on Bitcointalk and his emails were all allegedly carried out using the IP cloaking browser, Tor. This is the main reason why his public IP address could never be traced back to him.
The creator of Bitcoin itself dedicated a section on privacy in the Bitcoin white paper, suggesting users keep their public keys anonymous so that while the public can see transactions taking place, they don’t know who is involved, such as an exchange.
“It’s clear that Satoshi would have been intrigued by the privacy innovations that my peers and I contributed to at Zcash,” says Ben-Sasson.
Unfortunately, Nakamoto never addressed the subject again before disappearing from public view on December 12, 2010 – the date of his last post on Bitcointalk.
Ben-Sasson believes, however, that if Nakamoto had continued to be active, he probably would have pushed to bring ZK proofs to Bitcoin.
“Although they recently found their way to Bitcoin via ZeroSync, I think Satoshi would have been inclined to make the necessary adjustments to further integrate them,” he says.
“After all, for Bitcoin to realize its vision as a global currency, the imperative to evolve cannot be ignored, especially given its current state of ossification.”
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Felix Ng started writing about the blockchain industry through the perspective of a gaming industry journalist and editor in 2015. Since then, he has dedicated himself to covering the space blockchain full time. He is particularly interested in innovative blockchain technology aimed at solving real-world challenges.