From privacy coins to glowing iris-scanning orbs, zero-knowledge proofs have become synonymous with cryptography, scalability, and privacy.
In 2022, investors tech-in-2022/” target=”_blank” rel=”nofollow”>gave over $700 million in funding for companies going further with zero-knowledge proofs. This year, ZK-proofs has arguably become one of the biggest trends in blockchain, with several major ethereum scaling protocols hitting the mainnet.
ZK proofs are a cryptographic protocol that allows one party to prove the truth of a statement to another party without sharing any of the contents of the statement.
An oft-cited example is showing a bartender that you are old enough to drink without showing your ID or even telling him your date of birth.
Well, it seems that Satoshi Nakamoto, the pseudonymous creator of bitcoin, once found the technology quite interesting.
<h2 class="wp-block-heading" id="h-a-better-version-of-bitcoin“>A better version of bitcoin
In August 2010, user “Red” on the online forum Bitcointalk asked 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 attendee told the forum. Another member chimed in, suggesting that zero-knowledge proofs could be the solution.
“This is a very interesting topic,” Nakamoto responded.
“If a solution were found, a much better, easier and more convenient implementation of bitcoin would be possible.”
However, Nakamoto was not convinced that the technology could solve the “double spend” problem, a fundamental flaw that exists in all digital cash protocols where a bad actor could spend the same digital tokens more than once.
“The need to verify the absence of double spending requires a comprehensive understanding of all transactions,” Nakamoto said.
“It is difficult to think about how to apply zero-knowledge proofs in this case. “We are trying to demonstrate 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.
Nakamoto didn’t 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 formed by computer scientists from bitcoin‘s formative years. Zcash was created by modifying the original source code of bitcoin.
It was also the first time that zero-knowledge proofs were used in a real peer-to-peer cryptocurrency, allowing users to hide or protect the crypto wallet address sending or receiving funds.
Zcash’s founding scientist Eli Ben-Sasson would later found StarkWare, a company known today for using zero-knowledge proofs to scale ethereum via rollups.
Ben-Sasson tells Magazine that core bitcoin developers’ initial enthusiasm for ZK testing played a “pivotal role” in their eventual co-founding of StarkWare.
“The bitcoin 2013 conference in San Jose marked my Eureka moment.”
“Mike Hearn, a then-bitcoin developer and early bitcoin adopter, even went so far as to declare my talk on ZK testing the most crucial of the event due to its potential impact on the future of blockchain.”
“It was there that I realized the transformative potential of the validity tests I was developing,” Ben-Sasson says.
Fast forward to today, bitcoin itself is ready to enter the world of ZK testing.
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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.” saying Robin Linus, co-founder of ZeroSync.
Linus said that ZeroSync has designed and is currently implementing a Layer 2 protocol that could allow bitcoin to process more than 100 transactions per second while also providing privacy properties to bitcoin.
“This could be a huge feat in bringing bitcoin towards the scalability it needs.”
So what would Nakamoto think?
“It is clear from Satoshi’s previous comments that he was strongly in favor of using ZK tests for privacy,” says Ben-Sasson.
Nakamoto was a rigorous defender of anonymity. His public interactions on Bitcointalk and his emails were reportedly done using the IP masking browser, Tor. It is the main reason why his public IP address could never be traced.
The creator of bitcoin even bitcoin.org/bitcoin.pdf” target=”_blank” rel=”nofollow”>dedicated a section on privacy in the bitcoin white paper, which suggests users keep their public keys anonymous so that although the public can see the transactions occurring, they don’t know who is involved, like a stock exchange.
“It is clear that Satoshi would have been intrigued by the privacy innovations that my colleagues and I contributed to at Zcash,” says Ben-Sasson.
Unfortunately, Nakamoto never addressed the topic again before disappearing from the public eye on December 12, 2010, the date of his last post on Bitcointalk.
Ben-Sasson, however, believes that if Nakamoto had remained active, he would likely have pushed to bring ZK proofs to bitcoin.
“While they recently found their way to bitcoin through ZeroSync, I think Satoshi would have been inclined to make the necessary adjustments to integrate them further,” he says.
“After all, for bitcoin to realize its vision as a global currency, the imperative to scale cannot be ignored, especially considering its current state of ossification.”
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