Saturday, 2 December 2023

Crypto News

What did Satoshi Nakamoto think about ZK-proofs? – Cointelegraph Magazine

What did Satoshi Nakamoto think about ZK-proofs? – Cointelegraph Magazine

From privacy coins to shiny iris-scanning orbs, zero-knowledge proofs have become synonymous with crypto, scalability and privacy.

In 2022, investors gave over $700 million in funding to companies pushing the envelope with zero-knowledge proofs. This year, ZK-proofs has arguably become one of the biggest blockchain trends, with several major Ethereum scaling protocols hitting mainnet.

ZK-proofs are a cryptographic protocol that allows one party to prove the truth of a statement to another party without sharing any of the statement’s contents. 

An often-cited example is proving to a bartender that you’re old enough to drink without showing your ID or even telling them your birthdate.

Well, it seems that Satoshi Nakamoto, the pseudonymous creator of Bitcoin, once found the technology pretty interesting.

A better version of Bitcoin

In August 2010, the user “Red” on the online forum Bitcointalk asked whether there could be a way to improve the privacy of Bitcoin transactions. 

“One of the things that bugs me about bitcoin is that the entire history of transactions is completely public,” the forum-goer said. Another member piped in, suggesting that zero-knowledge proofs could be the solution. 

“This is a very interesting topic,” replied Nakamoto.

“If a solution was found, a much better, easier, more convenient implementation of Bitcoin would be possible.”

However, Nakamoto wasn’t convinced the tech could get around the “double-spending” problem — a fundamental flaw that exists in all digital cash protocols where a bad actor could spend the same digital tokens more than once.

“It’s the need to check for the absence of double-spends that requires global knowledge of all transactions,” said Nakamoto.

Satoshi Nakamoto’s response to users suggesting ZK-proofs to raise the privacy of Bitcoin transactions. (Bitcointalk)

“It’s hard to think of how to apply zero-knowledge-proofs in this case. We’re trying to prove the absence of something, which seems to require knowing about all and checking that the something isn’t included,” he argued.

Years later, someone cracks the code

Little did Nakamoto know that the cypherpunks would eventually find a way to solve the problem.

Privacy-focused cryptocurrency Zcash was launched in October 2016 by Electric Coin — a firm made up of computer scientists from the formative years of Bitcoin. Zcash was built by…

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