What are zero knowledge proofs? They are algorithms that allow one party (prover) to convince another (verifier) that something is true without having proof. The trust is already established.
What are zk rollups?
They are layer 2 scaling solutions that move the computation and state off-chain while continuing to store the transaction data on-chain. They periodically provide bundled-up transaction batches that occur using off-chain computation that proves the validity using zero knowledge proofs. Think of it as a summary of a bunch of transactions. The rollup’s state is maintained by smart contract on the layer 1 network. ZK rollups are also capable of performing proof-of-stake in cases where the role of executing and bundling transactions rotates between sets of validators who have deposited funds into a rollup staking contract.
This video by MJ the Fellow Actuary simplifies the concept of zero knowledge proofs.
Example
Now imagine a truck driver who is picking up a shipment of oranges from an orange grove. All the oranges are packed up in boxes, so he has no way of checking whether the boxes indeed contain oranges nor how many each has inside. In order to verify that himself, he would have to open up the boxes and unpack the oranges, which takes a lot of time and work.
The Zero Knowledge Proofs tell the truck driver that there are indeed oranges in each box without him having to open up the boxes to check himself. All the proof is there to confirm the contents of the boxes. This speeds up the transaction.
Functionality
ZKPs could have many different types of functions such as validating ownership of assets without exposing identity, providing password-less authentication, showing proof of KYCAML, proving identity without revealing personal information, providing health status without revealing health history, prove ownership without revealing trade secrets, etc.
Pros and Cons
Zero Knowledge Proofs consist of circuits made up of inputs, outputs, and a verification key using a sequence of logical gates to arrive at the conclusion of the proof.
Benefits
- Don’t require complex encryption
- Increased security and privacy
- Replace ineffective authentication methods
- The trust is always there without having to open up the orange crates to count the oranges.
Minuses:
- Computationally intensive
So how do we overcome the minuses? Well, the Zero Knowledge Virtual Machine addresses this issue.
ZKVM – zero knowledge virtual machine
- Single purpose ZKPs can’t easily accommodate diverse business logic within the same proof framework.
- ZKPs are single purpose (one blockchain at a time); ZKVM are general purpose (multiple blockchains simultaneously).
- ZKVM – performs general purpose zero knowledge computation. Handles multiple simultaneous processes on complex programs within the same proof framework. Can do multiple blockchain simultaneously – essential for cross-chain bridging.
- Zero knowledge virtual machines are essential for bringing industries into Stellar.
According to Stellar.org, a zero knowledge virtual machine was built to be a multi-asset ledger for the stellar consensus protocol. It is capable of handling large transaction volumes, facilitating broader use of validators, data protection, and custom protocol creation on top of blockchain rules all without requiring a network upgrade.
Stellar | ZkVM: a new design for fast, confidential smart contracts
Virtual Machine analogy
So, maybe instead of loading the truck up with 50 different crates of oranges, we receive one large bin filled with crates of oranges. This saves time and simplifies the work.
Benefits for Blockchains
- ZK-layer 2 rollups increase throughput by 10-100x.
- Off-chain computations don’t require gas fees
- Used for private transaction on public blockchain
- Reduce transaction sizes
- Cross-chain interoperability
- Verify efficiently on-chain
ZKP Algorithms
Bulletproofs – simple range proofs with logarithmic verification such as Monero – lowest costs
zk-Snarks – Succinct Non-Interactive Arguments of Knowledge
Different types:
- trusted set up – efficient proof sizes but comes with high costs such as Scroll
- Complex circuit generation for EVM compatibility- Polygon
zk-Starks – Scalable Transparent Arguments of Knowledge – transparent proofs but high cost such as Starknet
Bridging
ZKP Bridging is more advanced than traditional bridging. It serves as cross-chain bridges for many different blockchains. It eliminates the need for trusted intermediaries, increasing interoperability and reducing hacking risks. ZK Rollups part of the plan for coming to Stellar.
Validator nodes provide 100% guarantee.
ZK Proofs are not essentially bridges but can be a critical part of a non-custodial bridge.
In summary, ZK Proofs are an essential piece of the puzzle for bringing transactions on to Stellar.
