How Do Zero-Knowledge Proofs (ZKPs) Enhance Privacy in Crypto?

ZKPs allow one party (the prover) to prove to another party (the verifier) that a statement is true, without revealing any information beyond the validity of the statement itself. In crypto, this means a user can prove they have enough funds for a transaction without revealing the actual amount or their balance.

This technique, like zk-SNARKs, is crucial for protocols like Zcash to maintain transaction confidentiality. It balances transparency and privacy.