Last year, Zero-Knowledge Proofs (ZKPs) played a major role in cryptography and Web3, both in terms of scalability and user permission privacy. This is exciting because it sets the stage for the rollout of ZK applications across the crypto ecosystem and becomes Web3’s killer feature.
Web3 is a term that comes up frequently, but it’s a bit vague. Optimistically, it is best defined as it will provide the decentralization of Web1 and the richness of Web2. And in the process, solved many problems of Web2.
Web2 has a lot of problems – centralization allows hacking, data breaches, ruthless monetization of users. These are its systemic problems.
Web3 brings user-centric values, decentralization, and encryption technologies that promise to solve some of these problems.
Optimistic final definition aside, I would say that Web3 today is really just the user experience of accessing crypto from the web, and the ecosystem built around it, which opens up a lot of exciting possibilities; DeFi, NFTs, DAOs, etc. .
However, it is missing some key pieces needed to develop its wider reach.
Web3 and Privacy
For Web2, we are used to the federated privacy model. In this architecture, we preserve the privacy of personal information from common participants on the network, leaving the privacy to the specific entities with which we interact.
While this opens up design space for using private data, it introduces significant counterparty risk. Data leakage, monetization of private data, and permanent availability of leaked data are all major flaws of this architecture.
Web3, on the other hand, has no capabilities for private data. This means that it doesn’t need to deal with the downsides of Web2 privacy, but so far it doesn’t have this component. With Web3, instead of interacting with a centralized group, we interact with a decentralized network. While this does remove the negative effects of shared data and counterparty risk, only a decentralized entity can interact with it, which also brings up the challenge of how to achieve trust in the new environment.
Changing that and introducing privacy features will be necessary if Web3 is to be competitive in a wide range of applications. It’s either not viable in many use cases, such as bank accounts, online shopping, identity, social networking, and enterprise, or in the midst of other improvements made with cryptocurrencies, it creates a worse privacy environment than Web2.
Web3 and Security
Web2 also suffers from other obvious centralization issues, and besides loss of privacy, there are many other negative consequences for users. In theory, Web3 has a good chance of solving a similar problem, declaring the rules of its system in decentralized code.
However, today’s cryptocurrencies do not have this potential. If we are running a full node, then we get the full, mathematically guaranteed cryptographic security enabled by cryptocurrency. However, running a full node is not feasible for most cryptocurrencies or users. It requires expensive hardware and downloading and maintaining a connection to a massive 100-gigabyte blockchain.
This paradigm is especially problematic in Web3. Encrypted clients running in browsers simply cannot handle such demands.
As such, Web3’s work today relies on a trusted centralized intermediary that relays connections to the decentralized network behind Web3. This is noteworthy because it replicates many of the relevant dynamics that already exist in Web2. At the start of the year, Moxie Marlinspike described this in detail — a space in which the few centralized services that act as intermediaries are replicating the same dynamics as Web2, only with a much larger surface area. Combined with the aforementioned privacy concerns, these entities have the power of super ISPs to read and control access to all our data, which is a disaster for user sovereignty.
These entities, like Infura and Alchemy, are the weak point of Web3’s decentralization opportunities. Users in Venezuela recently found their access to Infura censored.
Impact of ZKP
These security and privacy issues are technical issues. Fortunately, ZKP solves this problem neatly. In terms of privacy, ZKP allows users to share information privately to a decentralized network, while providing security guarantees to the network, and the guaranteed data is authenticated. In terms of security – they assure users that the data they receive from the network is authentic without trusting intermediate access points.
This opens up the paradigm we commonly use in Web2 of sharing trusted information back and forth with applications. But the decentralization of Web3 also eliminates the possibility of applications betraying trust that is common in the centralized world of Web2.
When it comes to privacy, consider identity. Suppose we want to create a collection of NFTs where each person can only own at most one NFT in the collection. If this is done, users will need to disclose their identities. However, with ZKP, users can prove the uniqueness of their identity without specifying who they are. In a Web2 environment, this would require a centralized entity to track users and ensure uniqueness. In general Web3, this would require users to disclose their identities and corresponding NFTs. In Web3 with ZKP, this can be done completely privately, with all the guarantees one would want from this system.
In the case of security, let’s assume that a large part of the financial state is cryptocurrencies that are accessed through the web. With ZKP attesting to on-chain state, DeFi users will ensure that the account state they see online truly matches the on-chain state, guaranteeing its security. From a user’s perspective, this is similar to transitioning from HTTP to HTTPS, reducing the risk of censorship.
However, ZKP’s new capabilities are not just for exposing Web2 capabilities to Web3. It will also greatly expand the range of possibilities for Web3. For a brief preview of the possibilities, an application enhanced with ZKP can be built like this:
- An NFT that allows each person to own only one set of NFTs
- Let users prove ownership of a subset of NFTs without revealing which specific NFTs they own
- Generate non-transferable NFTs to identify real-world or digital achievements (ie; I’m a major contributor to the open source project)
- Allow Twitter users to create DAOs for their followers
- Anonymous voting to unlock the DAO
- Connecting existing financial data to cryptocurrencies to help bootstrap DeFi
The plethora of enhancements provided by ZKP will open a huge door for Web3. It will allow Web3 to provide a better experience than Web2. Web2 has struggled with sensitive user data and privacy, and Web3 will win with ZKP. It will address one of the biggest pain points for users with centralized networks and help accelerate the migration to Web3 beyond what we’ve seen with DeFi, NFTs, or other waves that bring more interest.
Narrowing it down, if we want to create a new, decentralized internet, we’re going to need security, scale, and privacy — there’s no better technology than zero-knowledge.
That leaves the question, why now? One of the variables is the huge growth of Web3 over the past 12-18 months, creating an environment for further experimentation and development.
This is also a good time for ZKs as they are now ready to be used in this area. Technological improvements in 2020 allow for a wider rollout of zero-knowledge in 2021, making ZK-rollup the primary scaling tool. In 2021, ZKP also sees further technical improvements in verification and proof performance.
As these cryptographic technologies develop, ZK will witness a lot of product development for ZK programmability in 2021. ZK programmability means taking ZK beyond scalability, zkRollup or zkevm. The next step will bring more powerful dapps that take full advantage of the core functionality of ZK, or zkApp as we call it.
In 2021, O(1) Labs released an early version of Mina’s zkApp. This is the first time developers have been able to write ZK code in a language as widely used as Typescript. O(1) just held its first workshop and hackathon for Mina’s ZK smart contracts in December 2021, with more to come this year. At Mina, we see a huge opportunity to unlock the full potential that ZKP offers developers through ZK programmability.
With SnarkyJS supporting simple ZK programming that developers are already building with, the Mina-to-Ethereum zkBridge is taking shape, and we’ll soon see all the examples of ZK applications mentioned above deployed on Web3.
Whether it’s the first wave of applications launched by Mina, or the wider acceptance of ZK programming by more industries, ZK will enter Web3 dapps in 2022.
Predictions for 2022 and beyond
The era of ZK in crypto is beginning, and it will have a huge impact on Web3. Here are some of the things I think will happen again this year:
- As Web3 takes off, we will see the need for privacy and security become clearer. ZKPs will be the most promising tools to give users control over their data and to selectively share personal information. This will lead to the next mass migration of users to Web3 and further weaken the web2 based network.
- ZK applications will roll out first in the most obvious areas: voting and private identity management, with rollups playing an important role in this development.
- At least one zkEVM will be released in beta by the end of the year
- At least one major tech company will announce something big related to ZKP – it’s too early to launch a product, but form a team or major research effort.
In between all of this, we’re also seeing the ZKP rollout schedule come into focus. When we look back, I predict we’ll see it unfold along the following timeline:
- By 2020, the technical foundation has been laid
- Today in 2020, the function of the underlying cryptography has reached a critical point
- 2021 – ZKP gets its own development
- 2022 – Disruption begins as ZKPs start to be a big part of differentiation, scale, and more
- 2023/2024 – Disruption in full swing as ZKP becomes a major component of product growth
- 2024/2025 – Dominance of applications leveraging ZKP and ZKP platforms
- 2025/2026 – Standardization of ZKP and ZKP-driven platforms
As ZKPs and cryptography become mainstream for building scalable, private, secure Web3, there will be opportunities to build technologies that truly empower users.
Fortunately, within Web3 we see a willingness to execute products with value as their goal. We’ve already seen crypto make the transition from proof-of-work to proof-of-stake in this regard. See what more exciting things we can achieve as cryptocurrencies begin to impact the wider world.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/2022-predictions-zero-knowledge-proofs-zkps-key-to-web3/
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