With the ever-increasing number of online transactions, privacy and security have become critical concerns. This is where zk-SNARKs come into play.

Zk-SNARKs, or Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge, is a revolutionary form of cryptographic proof that allows one party to prove they possess certain information without revealing it.

The significance of zk-SNARKs is most evident in situations requiring strict confidentiality, such as financial transactions, decentralized storage networks, secure voting systems, and maintaining user privacy across various digital platforms.

For example, on one of our projects, FileStar, we leveraged zk-SNARKs to improve processing capability of the network by reducing the number of messages for submitting proofs.

In this article, we aim to provide you with a detailed explanation of zk-SNARKs especially focusing on their benefits, use cases, and limitations.

Zk-SNARKs explained

So, first things first: What are zk-SNARKs?

Zk-SNARKs are a type of cryptographic proof that allows one party to demonstrate they possess certain information, like a secret key, without actually disclosing that information.

This is achieved in a way that requires no direct interaction between the person or entity proving their knowledge (the prover) and the one verifying it (the verifier). The proof revolves around a secret key, which is prepared before the transaction is executed.

Early zero-knowledge protocols used to require the prover and verifier to exchange multiple messages. However, in 2012, Nir Bitansky, Ran Canetti, Alessandro Chiesa, and Eran Tromer introduced the term “zk-SNARK” in a research paper, presenting a new kind of zero-knowledge protocol. This protocol eliminated the need for ongoing interaction between the prover and verifier, requiring just a single message.

Alessandro Chiesa, one of the co-authors, later played a crucial role in the creation of Zcash, a privacy-focused cryptocurrency that debuted in 2016. Zcash uses zk-SNARK technology to facilitate private transactions, thus demonstrating the practical application of this cryptographic method.

How do zk-SNARKs work?

To better understand how zk-SNARKs work, let’s consider the traditional proof process that requires a password for online network access.

Normally, you submit a password and the network verifies its correctness. To do this, the network must access the password.

In a zero-knowledge proof scenario, akin to zk-SNARKs, you demonstrate the network that you possess the correct password through a mathematical proof rather than actually showing it. So, the network doesn’t store the password for verification, meaning that there’s nothing to be stolen or compromised.

Based on complex mathematics, zk-SNARKs enable one party to prove not only the existence of certain information but also that the party in question is aware of that information.

What are the benefits of zk-SNARKs?

Privacy is the main benefit of zk-SNARKs, as they shield sensitive information through advanced cryptographic techniques. This means that individuals and organizations can perform transactions and share information without revealing any underlying details.

Furthermore, zk-SNARKs offer increased efficiency due to their non-interactive feature, allowing for the verification of information in milliseconds.

Besides, with zk-SNARKs, there’s no need for constant interaction between provers and verifiers. Instead, there’s only one round of communication, which streamlines the entire process and ensures cost-efficiency.

Criticism of zk-SNARKs

Despite significant advantages, there’s still some criticism related to zk-SNARKs.

For example, the increased security of zk-SNARKs is sometimes questioned because if a user has a private key used to set up the protocol, they could create false proofs that would seem valid to verifiers.

Therefore, privacy coins, such as Zcash, should implement additional measures to ensure that no single party has access to this private key.

Zk-SNARKs use cases

The three top practical applications of zero-knowledge SNARKs include privacy-focused cryptocurrencies, identity verification, and confidential financial transactions.

Let’s take a closer look at each of these zk-snark use cases.

Privacy-focused cryptocurrencies

Zk-SNARKs are primarily known for their use in privacy-focused cryptocurrencies. They enable transactions to be verified without revealing sensitive information about the parties involved or the transaction amounts, thereby ensuring both transparency and privacy on the blockchain.

Identity verification

Users commonly need to prove their identity to access various services, such as banking and tourism. However, these interactions cannot always guarantee data protection and privacy.

Leveraging zk-SNARKs for digital identity verification, users can prove they have certain credentials without revealing them. This helps protect personal information and enhance privacy in online interactions.

Confidential financial transactions

In the financial services, zk-SNARKs enable confidential transactions, allowing parties to verify the authenticity and compliance of a transaction without revealing key details such as the amount, the identities of the parties involved, or other sensitive financial data. This is especially valuable in scenarios where the confidentiality of data is critical, such as in high-value corporate transactions, cross-border payments, or private banking services.

For instance, in banking, zk-SNARKs can ensure that a transfer adheres to regulatory requirements and anti-money laundering (AML) standards without exposing the actual transaction details to unauthorized parties.

What is the difference between zk-SNARKs and zk-STARKs

Zk-SNARKs are often compared to zk-STARKs, which stand for Zero-Knowledge Scalable Transparent Argument of Knowledge. Unlike zk-SNARKs, this method does not require a trusted setup and it leverages linear cryptography to validate the truth of a statement without revealing the actual information.

Proofs generated by zk-STARKs are usually larger than those created by zk-SNARKs, making them better suited for scenarios where it’s necessary to work with large-size witnesses.

Zk-SNARKs vs zk-STARKs comparison shows that their main differences lie in proof size, security, scalability, transparency, verification speed, and application.

Proof size

Zk-SNARKs are very compact proofs, and their size remains consistent regardless of the complexity of the information that needs to be proved.

In contrast, zk-STARKs typically generate proofs that are 10 to 100 times larger compared to zk-SNARKs.

Security

Some Zk-SNARKs need a trusted setup, which involves the creation of a common Reference String (CRS). If anyone gains access to this data, they could produce false proofs.

Zk-STARKs do not require such setups, meaning they are less prone to potential threats and vulnerabilities.

Scalability

While zk-SNARKs scale linearly based on the size of the underlying computation, the proving and verification time of zk-STARKs increase in a quasilinear manner.

As a result, despite their larger proof sizes, zk-STARKs are better suited for more complex computations.

Transparency

The trusted setup of zero-knowledge SNARKs could be less transparent because it depends on a common reference string.

On the other hand, zk-STARKs are inherently more transparent, using publicly available randomness to set their parameters. Therefore, zk-STARKs can guarantee an open and transparent verification process.

Verification speed

Verifying a zk-SNARK proof is computationally efficient, resulting in fast verification time.

When it comes to zk-STARKs, they are more computationally intensive, meaning that they require more time for verification.

Application

Thanks to their compact sizes and fast verification time, zero-knowledge SNARKs are typically used in privacy coins, decentralized finance and dApp development, and identity verification.

As for zk-STARKs, their most widespread applications are Layer 2 solutions, a set of protocols built on top of existing blockchains to enhance their efficiency. This is due to their transparency and scalability benefits.

ZK-SNARKs examples

One of the most popular examples of zk-SNARKs in use is Zcash. This privacy coin enables users to choose between private and transparent addresses. So, if a user chooses a private address, zk-SNARKs shield the transaction data. This ensures that details such as the sender, receiver, and amount transferred remain confidential while still maintaining the integrity and verifiability of the transaction on the blockchain.

Another notable example is Filecoin, a decentralized storage network that uses zk-SNARKs to prove the validity of storage using significantly less space than would typically be required. The Filecoin Network currently produces approximately 6-7 million zk-SNARK proofs daily, each encompassing over 100 million arithmetic constraints. To achieve this, the team behind Filecoin has enhanced and optimized the existing SNARK-generation tools.

Closing thoughts

To sum up, zk-SNARKs offer a revolutionary way to enhance privacy and security in digital transactions. They enable the validation of information without revealing the actual data, thus ensuring confidentiality and integrity. They are especially beneficial in fields like cryptocurrency, digital identity verification, and secure voting systems. Complementing these privacy features, our Know Your Transaction solution provides real-time monitoring of cryptocurrency transactions to detect suspicious activities, helping maintain compliance with regulations and reducing risks in financial ecosystems.

If you are considering the integration of zk-SNARKs into your project and require expert guidance, PixelPlex is your go-to ZK rollup solution developer. With 16 years of experience in the field, our team boasts over 80 successful blockchain projects across various domains.

Reach out to our blockchain company to explore how our expertise can transform your project.