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What is Zero-Knowledge Proof (ZKP)?

Zero-knowledge proofs or zero-knowledge protocols (ZKP) were first introduced in the mid-80s by a group of the Massachusetts Institute of Technology (MIT) researchers in their paper, “The Knowledge Complexity Of Interactive Proof Systems.” They essentially defined ZKP as a method by which one party can interact with another party and provide proof of knowledge without unveiling their confidential data. Lukas Schor of The Argon Group states:

“Zero-knowledge proofs let you validate the truth of something without revealing how you know that truth or sharing the content of this truth with the verifier. This principle is based on an algorithm that takes some data as input and returns either ‘true’ or ‘false’.”

Enterprise businesses don’t want to share proprietary information that can get into the hands of hackers or their competitors. Businesses also want to ensure that the information is securely delivered to the intended party. Ordinary blockchains can accomplish this, but with ZKP businesses can share proofs about the data without sharing the data itself.

Some believe this new property will enable entirely new classes of blockchain applications to be built.

Generally speaking, ZKP could impact any industry that involves transactions, identity systems, and other proprietary information. ZKP can be used as a diligence, security, and verification tool in some of the most highly regulated industries like financial services, insurance, audit firms, and retail.