Zero-Knowledge Proofs(ZKP) and zkps: How to achieve a balance between privacy and security on the blockchain

In the Web3 era, a core contradiction is increasingly evident: we need transparent blockchain verification, yet we also urgently need to protect personal privacy. Zero-Knowledge Proof technology is precisely the key to this dilemma. Imagine you’re applying for a loan at a bank, needing to prove you have sufficient assets, but without revealing your specific bank balance—zkps (Zero-Knowledge Proof Systems) can achieve this. They allow the verifier to be convinced of the truth without ever peering into the details.

The Core Logic of Zero-Knowledge Proofs: Tell the Truth, Conceal the Details

Zero-Knowledge Proof(ZKP) is fundamentally a cryptographic protocol. In traditional identity verification, you need to present your passport or driver’s license to prove your identity; with zkps technology, you only need to generate a mathematical proof that you possess valid credentials, without ever showing the original document.

This mechanism involves three key roles:

• Prover: The person who needs to prove something (e.g., you)
• Verifier: The party checking the proof
• Proof itself: An encrypted data string containing all necessary information but no sensitive details

zkps operate on a simple principle: through complex mathematical computations, the prover generates a proof that is “uncontestable” yet “cannot be reversed.” The verifier can confirm its validity, but even with all the proof data, cannot reverse-engineer the hidden original information—that’s the true meaning of “Zero-Knowledge.”

For example, in cryptocurrency transactions, zkps can verify “this transaction indeed occurred,” “the amount is legitimate,” “the sender has sufficient funds,” while completely hiding sensitive details like transaction amounts and participant identities.

ZK Rollups: The Revolution in Blockchain Scalability

One of the most promising application areas for zero-knowledge proofs is Layer-2 scaling solutions, especially ZK Rollups.

Traditional blockchains face obvious limitations: Ethereum can process about 15 transactions per second, while Visa handles thousands per second. zkps technology redefines this landscape through ZK Rollups.

The principle is very clever: ZK Rollups do not store every transaction on-chain; instead, they batch hundreds or thousands of transactions off-chain, then generate a zero-knowledge proof submitted to the Ethereum mainnet. The mainnet verifies this proof, ensuring all transactions are legitimate and unaltered, without inspecting each transaction detail.

What are the benefits?

• Transaction speeds over 100 times faster: Off-chain batch processing is much quicker than on-chain processing
• Cost reductions of 90%: Less burden on the mainnet, significantly lowering Gas fees
• Enhanced privacy: Transaction details are hidden from the public
• Maintained decentralization: Verification authority is distributed, not reliant on a single node

After Ethereum adopts zkps-driven ZK Rollups, it theoretically can handle millions of transactions per second.

Multi-Dimensional Application Map of zkps Technology

Financial Privacy Revolution

In the DeFi ecosystem, zkps are fundamentally changing user experience. Imagine scenarios like:

• Confidential Lending: Users can prove they meet loan qualifications (e.g., credit score threshold) without revealing specific asset allocations or borrowing history
• Anonymous Payments: When purchasing goods, prove you have enough funds without exposing bank account or transaction records
• Voting Privacy: DAO members remain anonymous in governance votes, participating in decision-making while maintaining privacy

Zcash is a pioneer in this field, adopting zk-SNARK technology to fully hide transaction amounts and participant identities. In countries with high privacy concerns, Zcash adoption far exceeds that of Bitcoin.

Corporate and Government Applications

zkps are equally revolutionary in B2B scenarios:

• Supply Chain Verification: Companies can prove product authenticity and origin without revealing supplier lists or production costs
• Medical Privacy: Patients can share medical records for research while ensuring their identity and medical history are completely confidential
• Government Administration: Citizens can verify eligibility for benefits without submitting full personal data

Identity and Access Control

Passwordless authentication is a particularly promising direction:

• Users do not need to remember passwords, only generate zkps proving they know the password
• Reduces phishing risks, as private keys are never transmitted online
• Supports biometric verification without storing biometric data itself

Key Projects Driving the zkps Ecosystem

Infrastructure Layer

Loopring centers on ZK Rollups, boosting Ethereum’s transaction throughput to thousands of TPS, with Gas costs less than 1% of the mainnet. It has become the standard choice for decentralized exchanges and payments.

StarkWare developed zk-STARK technology (more resistant to quantum threats than zk-SNARKs), and built the Cairo programming environment, enabling developers to quickly deploy Layer-2 applications.

ZKsync adopts an Ethereum-compatible design, allowing existing DApps to migrate to zkps-driven Layer-2 without code changes, greatly reducing migration costs.

Privacy Application Layer

Zcash makes zkps its core feature, allowing users to choose between transparent and private transactions, with the latter fully hiding transaction amounts and participants.

Secret Network focuses on smart contract privacy, ensuring DApp execution logic and input data are confidential from on-chain observers—crucial for sensitive financial applications.

Tornado Cash uses zkps to obfuscate transactions on Ethereum, breaking links between addresses and providing tools for privacy advocates.

Special Purpose Layer

Filecoin uses zero-knowledge proofs to verify data storage integrity, ensuring service providers have stored the promised data without re-downloading files.

Immutable X specializes in NFT transactions, with zkps enabling near-instant settlement and almost zero fees, attracting many game developers.

Mina Protocol employs zk-SNARKs to compress the entire blockchain to just 22KB, enabling even smartphones to run full nodes, maximizing blockchain accessibility.

Current Challenges Facing zkps

Despite its immense potential, zero-knowledge proof technology still faces multiple difficulties in practical deployment:

Technical Barriers

High Computational Cost: Generating zkps proofs often takes seconds to minutes, unsuitable for high-frequency trading. Verification also consumes resources, though less than proof generation, still putting pressure on the main chain.

Algorithm Vulnerabilities: Existing zk-SNARK schemes rely on “trusted setup” ceremonies. If any participant retains secret parameters, they can forge false proofs. Multiple-party ceremonies reduce risk but do not eliminate it entirely.

Quantum Threats: When quantum computing matures, many zk-SNARK schemes could be broken. zk-STARKs are more quantum-resistant but less efficient.

Systemic Risks

Centralization Tendencies: ZK Rollups are often managed by a single sequencer, controlling transaction ordering and bundling. Malicious or offline sequencers can cause Layer-2 to stall.

Ecosystem Fragmentation: Different zkps projects adopt various proof systems and standards, leading to liquidity dispersion and fragmented user experience.

Regulatory Dilemmas: The privacy features of zkps may be exploited for money laundering or tax evasion. Many national regulators are cautious about zero-knowledge applications, even considering restrictions or bans.

( User-Level Barriers

High Usage Complexity: Ordinary users find it difficult to understand the cryptography behind zkps, making them vulnerable to scams or misuse. Social engineering attacks can still bypass zkps protections.

Incomplete Toolchains: Developer experience needs improvement; developing zkps applications has a much higher barrier than regular smart contracts.

Future Directions of zkps Technology

) Short-term (1-2 years)

zkps are expected to become standard in Layer-2 scaling and DeFi privacy solutions. Multiple zkps schemes will coexist within the Ethereum ecosystem, allowing users to choose based on needs. Enterprise applications will lead breakthroughs in supply chain and identity verification.

Mid-term (3-5 years)

zkps are likely to combine with other privacy technologies (like secure multi-party computation) to form more robust privacy frameworks. Cross-chain zkps proofs will become feasible, breaking down barriers between different blockchains. Quantum-resistant zkps schemes will mature, preparing for the post-quantum era.

Long-term (5+ years)

Zero-knowledge proofs may evolve into a standard infrastructure component of blockchain, similar to TLS encryption on the internet. Decentralized identity systems (DID) will extensively adopt zkps, giving users full control over their digital credentials.

Summary: zkps as the Foundation of Web3 Privacy

Zero-knowledge proof technology represents the frontier of cryptography and a mark of blockchain maturity. zkps not only address scalability bottlenecks but also provide essential privacy protections.

In an era increasingly concerned with data security, zkps offer an elegant solution: maintaining blockchain transparency and security without sacrificing individual privacy. As the technology improves and applications expand, zero-knowledge proofs will gradually move from cryptographic specialists’ domain into mainstream use, ultimately shaping a digital future where privacy, security, and efficiency coexist.