Zero-knowledge (ZK) proofs have been tested on Ethereum and they are an exciting new idea that can also improve Bitcoin. A non-profit organization from Switzerland based in Zug is one of many other organizations that is working currently on making ZK-proofs available on Bitcoin. According to several media reports, they finally had a breakthrough in delivering the technology. Let’s take a look at what ZeroSync has developed for Bitcoin.

What are zero-knowledge proofs and what advantages do they offer for Bitcoin?

What zero-knowledge proofs?

Zero-knowledge proofs allowing to verify if a statement or a piece of information is true without knowing the information itself. Hence the name zero-knowledge proofs. It’s a cryptographic method that is used for a variety of purposes.

Cryptocurrencies such as Zcash are using a protocol that is called Succinct Non-interactive Argument of Knowledge or in short zk-SNARK, which is based on zero-knowledge proofs. In this case, the protocol is used to cut the ties between the sender and recipient of a transaction.

Ethereum is working since 2017 to implement a similar solution to provide basic data protection and privacy for smart contracts. Another application is ZK-rollups that enhance layer-2 protocols and this leads us to what zero-knowledge proof can do for Bitcoin.

ZK-proofs on Bitcoin

One advantage is that ZK-proofs allow syncing Bitcoin’s blockchain within no time. Instead of downloading all the data ZK-proofs just verify the state and transaction history. At first glance, this just looks like a minor improvement but given the fact that the size of the blockchain is currently around 468 GB, it could improve interaction with Bitcoin.

Of course, there are such things as Bitcoin wallets that use remote nodes, but this requires trusting a third party. ZK-proofs on the other hand are fast and trustless. This technology can also be used for layer-2 protocols such as Taro. With Taro stablecoins and many other tokenized assets can be issued on the Lightning Network. Zero-knowledge proofs could be used to compress Taro’s transaction history even further.

According to ZeroSync Association’s GitHub, the code that is provided is still full of critical security bugs and it will take some time until its finished. With new developments being made, gaps are being closed. Bitcoin has been seen as the digital gold and or digital property so far. This limited perspective could be extended with several use cases in the future. The Ordinals protocol proves that it is possible to make new things happen that were exclusive to other blockchain platforms.