Hide and reveal: the evolution of privacy coin technology
Privacy can take many forms and occur on many levels. The technologies that blockchain architects originally intended for privacy currencies are now being used by a variety of crypto interested parties, from companies to exchanges. What began as a means to conduct anonymous transactions has generated a flourishing industry, built on technologies designed to hide, but that can also be programmed to reveal a selected few.
Zk-Snarks are best known for their use in privacy currency protocols such as Zcash. These “zero knowledge tests” have much broader applications than simply masking the sender and receiver by transmitting cryptography through a public book. A zero knowledge test allows one of the parties to prove to another that a statement is true, without revealing any information about the statement itself.
To divide this into a simple analogy, imagine that farmer Bob is selling some cattle in the market. He wants to prove to the auctioneer that there is a cow in his trailer, but without opening the door (because then the creature would escape). Using a heat sensor installed inside the trailer, Bob can demonstrate that there is a live animal that breathes inside, but the auctioneer will have no way of knowing what a cow it is, or even if the animal is a cow (unless it bites and yields. distance game). Essentially, this is how a zk-Snark works: proof that something is true, while revealing zero knowledge about the thing in question.
As for how zk-Snarks can be implemented outside of privacy currency transactions, look no further than smart contracts. Quras, for example, is using technology to provide smart contracts with privacy that run on its virtual machine of the same name. Applications include hiding information related to credit history; allow medical and health information on IoT devices to be shared confidentially; and facilitate sealed auctions that are executed through smart contracts.
Hide and reveal: the evolution of privacy coin technology
Mouayad Yousef is the director of operations at Burency, a cryptocurrency and blockchain exchange research and development platform. There are explanations, why private smart contracts are desirable, he told news.Bitcoin.com: “Smart contracts have the potential to automate business processes ranging from the calculation of insurance premiums to the enhancement of synthetic product markets. decentralized, but for this to happen, it is necessary to build privacy. The transmission of information in chain nullifies any benefit that otherwise could have been obtained through the use of blockchain, since publicly verifiable smart contracts allow observers to lead the markets and steal competitors’ patented algorithms. Privacy technology provides a means to hide the secret sauce that is in a smart contract, while checking its integrity. “
zk-Snarks is not the only privacy technology whose applications extend well beyond those originally imagined by its pseudonym creator. The origins of Mimblewimble do not need to be counted again, but its evolution does. Although it is used by Grin and Beam, and soon also by Litecoin, it is Mimblewimble’s Beam iteration that has applications for the widest range of users. Understanding how Mimblewimble works is not easy, unless you are an expert in elliptic curve cryptography. Even Beam’s attempt to explain the process through a series of silly metaphors requires some digestion.
What is relevant here is not so much the way Mimblewimble works, but the fact that it can provide complete transactional anonymity between the parties and at the same time is compatible with implementations such as Beam that allow optional audibility. The digitally signed documentation can be attached to the transactions, giving permission to an approved auditor to view the transactions associated with a particular key. For cypherpunks that try to hide their activity of spying on governments, that capacity will be of little interest, but for companies that wish to hide their daily affairs from the public (payment staff, contractors and purchase of goods) while continuing to comply, since An accounting perspective is extremely useful.
Bulletproofs are actually part of the family of zero knowledge tests and allow you to add multiple range tests of different parts in a single test. What this means, in practice, is that bulletproofs that the information is compressed significantly without compromising its validity. When it was integrated into Monero last year, for example, bulletproofs reduced transaction fees by reducing the average size of each transaction.
There are a number of interesting applications for bulletproofs in addition to facilitating confidential transactions. They can be used as proof of solvency, for example, with a research article that states: “An exchange of Bitcoin with 2 million customers needs approximately 18 GB to prove solvency confidentially. Using Bulletproofs and its variant protocols, this size it could be reduced to approximately 62 MB. ”The same document lists a total of eight use cases for bulletproofs, including smart contracts and encryption derivatives.
Privacy coin technology follows the same adoption curve as other disruptive technologies: it is first used by criminals, outlaws and geeks. Then, by companies, common end users and even governments. As with encryption, it is proving to be with technology that preserves privacy: from the unknown to the ostracized to the indispensable in less than a decade.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.