An Explain like I'm 12 Introduction to Zero Knowledge Technology and Why You Should Care.

In short, zero knowledge proofs allow a prover to mathematically prove to a verifier that the computation run by the prover is valid without needing to reveal secret parameters involved in the computation of the proof. This has two primary benefits. First, the proof removes the need for verifiers to execute the computation themselves to ensure it is valid since the proof can only be generated if the computation or transactions it is proposing are valid in the first place. In the case of rollups, this allows for transactions to be batched leaving less computation for node operators and less data needing to be stored on chain. Secondly, this allows the ability for sensitive data in the computation to remain secret due to the computation only being run by the prover. For example, one of the simplest implementations of this is confidential transactions. Rather than publicly revealing the balance of account A and account B at any point, a zero knowledge proof can be generated to prove to the network that account A’s balance is ≥ the value they are sending to account B. This means that in this process, the balance of accounts A and B, nor the value of the transfer is revealed since the zero knowledge proof provided proves the validity of the transaction.

Another example of the use of zk proofs is the zkRollup. For the uninitiated, a rollup is basically a large batch of compressed transactions which are verified on the main chain at regular intervals. zkRollups are the most secure type of rollup. Unlike optimistic rollups which use economic incentives and fraud proofs to resolve disputes, zkRollups use a zero knowledge proof to prove that a batch of transactions are all valid. Since it is of course not possible for a zero knowledge proof with an invalid transaction to be generated, there is no need to later verify or dispute the zero knowledge proof. This offers scaling on Ethereum of up to 2000 tx/second in their current state and up to millions of tps once Danksharding is introduced.

Zero knowledge proofs offer a lot of value to Ethereum in many different ways. As shown in the examples above they can be used to increase the scalability of Ethereum in the form of a zkRollup or used to perform transactions without revealing sensitive information, great for use cases where privacy is a necessity. Additionally, one of the most significant long term possible use cases for zk proofs is to effectively zkSNARK-ify everything on Ethereum. So rather than having all computations executed by the EVM on all nodes on the network, zk proofs could be used so that only the block prover has to run the EVM computation and all other network participants can simply refer to the proofs. The same goes for other network computation such as signature verification among other things. The effect of this is greatly reduced data and computational requirements to run a node as well as helping to make Ethereum’s cryptography resistant to the threat of quantum computers which will at some point be able to break conventional cryptography.

So what is the current state of zero knowledge tech on Ethereum?

Zero knowledge proofs are used in a wide range of privacy tech on Ethereum including but not limited to: zk.money: A zkRollup which offers privacy to all transactions between accounts on the rollup and partial privacy to transactions on and off the rollup. Tornado.cash: A decentralised privacy mixer which allows anyone to deposit funds and later withdraw them to a new address anonymously. Nightfall: A private enterprise optimistic rollup which utilises zk proofs to offer privacy to the enterprises using the rollup. Semaphore: A protocol which allows users to privately prove their membership of certain groups or to vote or make endorsements while preserving the privacy of parts of their identity.

Currently, many zkRollups are still limited in their functionality due to not being compatible with the Ethereum Virtual Machine. Basically, this means that apps on Ethereum such as Uniswap cannot simply be ported over to the zkRollup easily. However, there are currently a few teams building different types of zkRollups.

zkSync currently has zkSync 2.0 in testnet which will be EVM compatible unlike their current zkSync V1, zkSync 2.0 will allow apps to be easily ported over. Furthermore it will be highly scalable, provide the full security of the Ethereum L1 and allow for instant withdrawals without the need for 3rd party bridges for instant withdrawals as is the case currently with Optimistic rollups.

Another team, StarkWare is building StarkEx and StarkNet. Currently StarkEx is powering application specific zkRollups such as dYdX which offers instant trades, no gas fees and full Ethereum L1 security. But where it gets really promising is with their new main net alpha of StarkNet which is a general purpose ZK rollup. While similar to zkSync 2.0, StarkNet has a couple of important differentiations. Firstly, it uses a different type of zkProof known as a zkSTARK compared to zkSync 2.0’s PLONKs. The end result of this is that it is quantum resistant. The other main differentiation is that StarkNet is using its own programming language, Cairo as opposed to Ethereum’s solidity, though apps can be translated to Cairo using software. While this may act as a barrier making porting apps over to StarkNet harder, the benefits will still be worth it for many developers and users.

Finally, the are a few other zkRollups being built such as Polygon Hermez and Scroll but to go into every project in detail would require a whole post on its own. Hopefully this has been a helpful introduction to the fascinating but often confusing world of zero knowledge technology. if you want to learn more about rollups and zkRollups I’d highly recommend checking out some of u/Liberosist’s posts on the topic. or if you want to learn more about zero knowledge tech specifically, Matter Labs curated a great list of resources here: https://github.com/matter-labs/awesome-zero-knowledge-proofs