Zero-Knowledge Proof
A zero-knowledge proof (ZKP) is a cryptographic method allowing one party to prove to another that a statement is true without revealing any additional information beyond the statement’s validity.
What is a Zero-Knowledge Proof?
A zero-knowledge proof (ZKP) is a cryptographic technique used in blockchain systems like Ethereum to verify the truth of a statement or transaction without disclosing any underlying data. It enables one party (the prover) to convince another (the verifier) that a computation is correct or a condition is met while keeping sensitive details private. ZKPs are integral to privacy-focused blockchains and layer-2 scaling solutions, balancing confidentiality with trustless verification.
Imagine you want to enter a bar that requires you to be over 21, but you don’t want to show your ID with your exact birthdate or address. With a zero-knowledge proof, you could use a digital card that proves you’re over 21 to the bouncer without revealing any other personal details. In DeFi, this is like proving you have enough ETH to make a trade on a platform like zkSync without disclosing your wallet balance or transaction history, ensuring privacy while still satisfying the platform’s rules.
Related Terms
Proof-of-Stake (PoS) Ethereum
A consensus mechanism used by Ethereum to secure its network and validate transactions.
Lightning Network
The Lightning Network is a layer-2 scaling solution for Bitcoin that enables fast, low-cost transactions off-chain while leveraging Bitcoin’s blockchain for security and final settlement.
ERC-721
A standard for non-fungible tokens (NFTs) on Ethereum, representing unique digital assets.
Diamond Hands
A term describing traders or investors who hold onto their digital assets through market volatility, demonstrating strong conviction and risk tolerance.
Bid Side
The section of an order book listing all open buy orders, sorted from highest to lowest price.
Buy Walls
Large accumulations of buy orders at a specific price level, forming a barrier against downward price movement.