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.
Glossar
ZKPs
Cryptography ⎊ Zero-Knowledge Proofs are a class of advanced cryptographic protocols that enable a party to demonstrate the truth of a statement to a Verifier without disclosing the underlying secret information.
Privacy
Anonymity ⎊ Privacy within cryptocurrency and derivatives contexts centers on obscuring the link between transaction origins and identifiable entities, a critical distinction from traditional finance’s reliance on Know Your Customer (KYC) protocols.