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Zero-knowledge proofs show potential from voting to finance – Cointelegraph Magazine

  • In a world increasingly anxious about privacy and exploitation of one’s personal data by governments, corporations, social media platforms and banks, zero-knowledge proofs may offer some relief.
  • ZK-proofs have already found a home within the cryptocurrency and blockchain sector — enabling scaling protocols to make Ethereum transactions faster and cheaper, for example.
  • One day, ZK-proofs could help convince your bank that your income is above a certain threshold — to qualify for a mortgage, for example — without revealing your actual income.
  • ZK-proofs open up a new world of potential applications, including “anonymous voting, decentralized games, proving personal information without fully disclosing your personal information, and fighting against fake news by proving the source of the news,” Polygon co-founder Jordi Baylina tells Magazine.
  • Some in the cryptographic community view ZK-proofs as a potential weapon in the looming struggle against false information, including AI-altered documents, images, and identities.
  • In some industry sectors like finance, ZK-proofs may profoundly alter how business is conducted. “We see this revolutionizing the audit industry,” Proven co-founder and CEO Rich Dewey tells Magazine in connection with ZK-enabled proof-of-solvency protocols.
  • ZK-proofs were first presented back in the 1980s but have only had their “big breakthrough” in the past decade.
  • ZK-proofs are computationally complex but their core intuition is simple — they allow a party to prove to others that a computation was executed correctly without revealing the computation itself.
  • Promising use cases for ZK-proofs include verifying digital voting, privacy safeguards for central bank digital currencies (CBDCs), exposing altered photos, proof-of-solvency in finance, and immutable tracking of goods in supply chains.
  • Obstacles that need to be overcome before ZK-proofs become commonplace include bridging the gap to the real world, the acceptance of ZK claims in court, scalability, and usability.
  • Despite these challenges, ZK-proofs have the potential to offer solutions to the fake news challenge and the privacy dilemma of CBDCs, providing anonymity for users while ensuring accountability for governments.
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