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What are zkSNARKs? | The Complete Guide

As more people have embraced Bitcoin and the amazing technology that makes it function, they have also discovered some of its most important pitfalls. One of those is the concept of a completely anonymous transaction. While Bitcoin is often thought of being “anonymous”, it is actually only “pseudonymous”, because every Bitcoin address’s transactions are tracked…

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As more people have embraced Bitcoin and the amazing technology that makes it function, they have also discovered some of its most important pitfalls. One of those is the concept of a completely anonymous transaction. While Bitcoin is often thought of being “anonymous”, it is actually only “pseudonymous”, because every Bitcoin address’s transactions are tracked on the public blockchain. There are, however, other cryptocurrencies that have been able to develop blockchains that provide for complete privacy in their protocols. One such cryptocurrency is Zcash which makes use of a revolutionary privacy implementation called zkSNARKs.

In this post we will take a look at the basics of zkSNARKs, how they hide privacy and how they will develop in the future.

Zero Knowledge of It

zkSNARKs are based on a relatively recent cryptographic principle called zero knowledge proofs. In the initial academic paper that theorized Zero Knowledge protocols, they were defined as:

“A zero-knowledge protocol is a method by which one party (the prover) can prove to another party (the verifier) that something is true, without revealing any information apart from the fact that this specific statement is true.”

So, essentially a zero knowledge proof can allow for one person to prove that they know something secret without revealing what that secret is. This has important implications for many situations in which we need to exchange a secret but cannot fully trust the party that we are sending that information to.

For example, think about the way in which your online passwords work. When you insert your password on a website, that password is sent to the server and stored in a hashed form. While hashes do attempt to obscure the password, in the hands of a competent hacker, a hash can be just as dangerous as plain text. Hence, you are disclosing a secret to a website and relying on the supposed trustworthiness of the site to protect it. Would it not be much more secure if you could demonstrate your knowledge of the password by solving some cryptographic proof?

This is exactly how zero knowledge proofs work and they are particularly important in crypto privacy protocols. You want to be able to prove to the party that you are transacting with that you do indeed hold the private key to your wallet without actually revealing that private key. According to the theory, in order for a zero knowledge proof to be valid, it has to meet the following requirements:

  • Completeness: If the input is true, the proof will always return “true”.
  • Soundness: If the input is false, you cannot trick the zero-knowledge proof to return “true”.
  • Zero-Knowledge: The verifier learns nothing more than whether the statement is true

Now that we have laid the groundwork of zero knowledge proofs, let’s take a look at how they have been incorporated into zkSNARKS.

zkSNARKs and Blockchains

zkSNARKs expand on the mathematical theory of zero knowledge proofs and allow them to be used in blockchains with reduced computational complexity. “zkSNARKs” stands for Zero Knowledge Succinct Non Interactive Argument of Knowledge. Yes, that is a mouthful but let’s break that down word by word.

  • Zero-Knowledge: Explained Above
  • Succinct Can be verified very quickly
  • Non Interactive: A proof where a single message can be sent from the prover to the verifier. There is no need for a back and forth of messages.
  • Argument of Knowledge: The prover can convince the verifier that information exists and that they are the only person that can access that information without revealing said information.

In regular transactions, when a payment is sent from one party to the other, the details of this payment are visible to all nodes on the network. This includes all the inputs and outputs to the transaction which contain information about the public addresses and amounts. However, with a zero knowledge transaction, the only information that one is able to glean is that a transaction has taken place. There is no information about the sender, recipient or amount. Below is a simple visual representation as to how Zero Knowledge Transaction work in a blockchain protocol.

Another term for these transactions is a “shielded transaction”. zkSNARKs are used to prove that the conditions of a valid transaction has been met without revealing anything. The sender of this transaction will have to construct a proof that shows the following:

  • Input values equal the output values
  • The sender does indeed have control of the private keys to the wallet
  • There is a cryptographic link between the private spending key and the signature to the transaction. This will eliminate the possibility that a third party can tamper with the transaction.

Of course, this is the basic theory behind zkSNARKS and zero knowledge proofs. A deeper look would require an understanding of advanced computational mathematics and cryptography (moon math according to Vitalik Buterin).

zkSNARKS in Use

Given that zkSNARKs have such an important impact on cryptocurrencies, they are already in use on a number of chains and are being considered by others. Most notably, they were popularized for their use in the Zcash protocol.

Zcash is one of the most popular cryptocurrencies in the world with a current market cap of $4.3bn. There have also been a number of forks of Zcash and forks of forks. For example, you have Zclassic which is a fork of Zcash. Zclassic has also spawned two of its own forked coins in ZenCash and Bitcoin Private. Both of these chains make use of zkSNARKs for their shielded transactions. Then, there is also the ambitions of the second most valuable cryptocurrency, Ethereum, to include zkSNARKs into their protocol. This will come as part of their Metropolis upgrade that will include a number of features like Proof-of-Stake.

Currently, the computational complexity involved with generating many of these proofs is quite high. This limits their application in many other potential use cases. Yet, as more work is done on this and computing power advances, we are likely to see similar technology in a number of privacy dependent applications.

Potential Challenges

One of the most important concerns about zero knowledge blockchains is that they have to rely on a certain “master key”. Having an active master key to a blockchain worth billions is no doubt a big deal. This is a shadow that has remained over the Zcash blockchain since its inception. Although the ZCash team has claimed that they have destroyed the master key in their Zcash ceremony, there is always a risk that it could have leaked or someone has a copy. However, there may soon be an alternative to this in the form of another unique adaption called a “zkSTARK”. The main advantage of this technology over zkSNARKs is that it would not have to rely on a master key or public key cryptography. All they would need is a simple algorithm to function. zkSTARKs could also be much more efficient in terms of the computing power required to complete the proofs. The technology is in its infancy though and is still being researched by numerous cryptographers. It would be interesting to see how the technology develops over the next few years.

Conclusion

Bitcoin was developed for a number of reasons, one of which which was to give personal financial control back to individuals. Privacy of the holder is likely to have been another of the most important considerations. But as cryptocurrency adoption has grown, so has the ability for governments and agencies to meticulously track these transactions on the very public blockchain.

With technology such as zkSNARKs, however, such transactions will be shielded and the parties will remain completely anonymous. There is also a great deal of other applications that will benefit from these technological advancements. While the technology is still new and questions do remain, one cannot discount the demand for a truly private cryptocurrency.

Source: https://unhashed.com/cryptocurrency-coin-guides/what-are-zksnarks/

Blockchain

Blockchain Platform QANplatform to Provide Cloud Deployments

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The Quantum-resistant blockchain platform – QAN – will launch its cloud deployment service, via which developers can reach platforms like Amazon AWS and Microsoft Azure. The new option will be available from the end of 2021.

QANplatform Vows to Cut The Deployment Time

Through a new cloud deployment feature on its network, users of the Estonian-based blockchain platform – QANplatform – would be able to extend the QAN private DLT to cloud platforms such as Amazon AWS, Google Cloud Platform, Microsoft Azure, Linode, and DigitalOcean in no longer than 5 minutes.

Per the announcement shared with CryptoPotato, QANplatform would be the first in its field to automate this function to such major platforms. As a result, DevOps engineers and developers would be capable of building quantum-resistant smart contracts, DeFi solutions, tokens, DApps, and NFTs at a reduced deployment time by 80%.

Johann Polecsak – Co-Founder and CTO of QANplatform – praised the future initiative. He said his blockchain project aims to lower the entry barrier for the developer community so it can “build Proofs-of-Concept (PoC) and Minimum Viable Products (MVP) as fast as possible to reach mass adoption.”

“QAN blockchain platform solves this issue by building integrations to existing and widely used and loved programming languages (Rust, Go), DevOps technologies (Docker, Kubernetes) and Cloud Platforms like Amazon AWS or Microsoft Azure.” – Polecsak added.

The cloud platform deployment feature would start with the QANplatform TestNet release. It would be available for developers by the end of the ongoing year as they can pre-register for it.

QAN Raised Over $2M to Build DeFi Ecosystem

In May this year, QANplatform caught the attention of the crypto community with another initiative. Back then, the blockchain project announced a fundraise of $2.1M from companies like Fairum Ventures, BlackDragon, DeltaHub Capital, and Insignius Capital. With it, QANplatform aimed to develop an ecosystem where users would be capable of building various software applications within DeFi quicker.

Max Mucko – Partner at BlackDragon – commented on the move:

“We are glad to contribute to this investment round and support QANplatform’s future growth. We see a lot of potentials not only because of the quantum-resistant cybersecurity but also for QAN’s other IPs like Proof-of-Randomness (PoR) consensus algorithm, rapid cloud platform deployment, or the upcoming multi-language smart contract development feature.”

The funding focused on three strategic areas: product development, liquidity providing on exchanges, and marketing.

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Source: https://cryptopotato.com/blockchain-platform-qanplatform-to-provide-cloud-deployments/

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Busta Rhymes, Dungeon Dragon “Rawring” Again With The HUSL

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[PRESS RELEASE  Gros-Islet, Saint Lucia – 28th September 2021]

NFTs have become a safe space for artists all over the world because of their unparalleled distribution capabilities and direct connection between the fans and artists. The HUSL aims to use this capability of NFTs to remove the intermediaries from the music industry and connect artists directly to their fans.

The HUSL has partnered with Busta Rhymes, a world-renowned rapper who is ready to launch his first NFT collection called Dungeon Dragon.

Dungeon Dragon holds a special place in Busta’s life and personal meaning. Busta Rhymes became popular as Dungeon Dragon from East Flatbush once separated from his band 16 bars. This name brought Busta a lot of success and helped him grow as an artist to become the soulful legend is today.

“Its an honor to launch Busta’s 1st ever NFT collection, especially one with that pertains to an image which holds such deep meaning to him”, said founder and CEO of The HUSL, Varun Bajaj.

The Dungeon Dragon NFT collection is a tribute to his journey and will be launched exclusively on The HUSL. The HUSL is a disruptive NFT platform designed to break the existing monotonous and unfair industry standards of the music industry. The HUSL aims to create a symbiotic relationship between creators and consumers and bring exclusive and rare NFT collectibles to the fans.

About The Dungeon Dragon NFT Collection

Busta Rhymes is launching an exclusive Dungeon Dragon NFT collection on The HUSL on Thursday, September 30th, 2021. Before the launch, on Wednesday, Busta will participate in a live Twitter Space with The HUSL to announce the collection and the significance behind the collection.

The Dungeon Dragon collection will include three NFTs – Red, Silver, and Gold. All of these three NFTs are priced differently and hold several exciting hidden rewards. About 10% of each Tier collector will be selected to be rewarded with exclusive perks that involve Busta such as private and group zoom calls and autographed memorabilia.

The price of the NFTs are as follow,

Gold – .20 ETH
Silver – .10 ETH
Red – .05 ETH

All three NFTs hold special meaning to Busta Rhymes and celebrate his journey of becoming the star he is today. Busta took to Twitter to announce the impending launch of the NFTs.

About Busta Rhymes

Trevor George Smith Jr. professionally known as Busta Rhymes is an American record producer and Rapper. The 49-year-old artist has several laurels to his name with his hit songs such as Touch it (2006), I Know What You Want (2002), and Break Ya Neck (2001).

Busta Rhymes has been an active part of the NFT community and will be releasing a Dungeon Dragon NFT collection soon on The HUSL.

About The HUSL

The HUSL is a revolutionary music-based NFT platform designed to empower artists and creators by connecting them directly with their fans. The platform aims to disrupt the existing music industry distribution model which is rigged to help distributors and other intermediaries and give complete control to the artists.

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Source: https://cryptopotato.com/busta-rhymes-dungeon-dragon-rawring-again-with-the-husl/

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Assessing an investment in Bitcoin post-China’s latest ‘ban’

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The sky is blue. Water is wet. China is banning Bitcoin. 

While some new investors were petrified, as can be inferred from the minor dip in prices, a majority of the community remained unscathed by the development.

It isn’t the first time China has banned Bitcoin, and it probably won’t be the last. However, speculations suggest that this time China might be more serious than before. However, will it really matter in the long run for Bitcoin and co.?

A quick recap of the Bitcoin-China tussle of 2021

China threw the first sign of caution back in March. Reports stated that there is an ongoing crackdown on Bitcoin mining firms and there was an extended ban on mining projects in Inner Mongolia. At that time, the Chinese provinces of Xinjiang were the highest contributors to the hash rate. And yet, Bitcoin continued to rally and recorded new highs in April, consolidating in that range till May 2021.

Then, in May and June 2021, China decided to ban banks and payments firms from providing services related to cryptocurrency transactions. The National Internet Finance Association of China, the Clearing Association of China, and the China Banking Association issued a warning that consumers would have no protection if they faced any losses during crypto-trading.

And now, the People’s Bank of China(PBoC) has announced that there would be tougher measures taken on crypto-trading. This applies to any institution involved in crypto-transactions, regardless of it being off-shore if services are provided in China.

So, is it time to buy Bitcoin?

Ironically, whenever China has made news with a major ‘ban’ announcement on Bitcoin, the digital asset has gone on to record all-time highs.

Source: Trading View

Beginning with the initial concern during Q4 of 2013, China’s central bank had revealed that it was worried about digital asset payments. At the time, Baidu, China’s biggest Internet service company, was served with a warning – Do not accept any form of digital payments. A few weeks later, it jumped by almost 6x, hitting $1242.

In September 2017, China announced that it was going to shut down all Bitcoin exchanges after the asset rallied towards the beginning of 2017. While the price momentarily dropped, end of Q4 2017, Bitcoin hit $20,000.

In terms of market structure, 2017 and 2021 have been largely similar. And now, they have another common entity with China’s ban. Speculators are suggesting that China’s restrictions are the perfect investment opportunity based on historical data.

However, only time will tell if the digital asset actually touches another ATH towards the end of the year.

Is there a hidden agenda?

Without sounding too dismissive about the current situation, it is important to identify the difference between China’s stance then and now. According to last Friday’s notice, 10 agencies are present. Previously, it was 7. Mainly, the Cyberspace Administration of China (CAC) is one of the new entrants, something that might underline the weight of the current ban.

The notice claimed that any individual or organization investing in virtual currencies and similar crypto-derivatives violates “public order and good customs.” There is a certain indirectness to this statement since it can be essentially taken as “trade with crypto at your own risk.”

Leading commentators have also speculated the idea of diminishing economic freedom and the fact that China is ready to establish its own Fed coin. One which will have similar crypto-characteristics. China remains secretive as ever, so while such announcements do affect the larger market sentiment for Bitcoin, the asset has been resilient over the past few months.

Where to Invest?

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Source: https://ambcrypto.com/assessing-an-investment-in-bitcoin-post-chinas-latest-ban

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