5.8 C
London
Monday, February 26, 2024
HomeDeFiNext stage of web3 evolution will be underpinned by zero knowledge tech

Next stage of web3 evolution will be underpinned by zero knowledge tech

Date:

Related stories

Can BRICS Launch a New Currency & Jeopardize the US Dollar?

The BRICS alliance is aiming to launch a new...

BRICS to Launch a Single Currency Similar to Euro?

The BRICS alliance is looking to work on an...

Cryptocurrency: 3 Coins That Could Surge in March

March is shaping up to be a pivotal month...

BRICS: 30 New Countries Prepare To Join Alliance in 2024

A handful of developing countries are preparing to join...

US Dollar Weakened: Gold Price Passes $2040

The US dollar has continued to weaken over the...

A web3 membership designed to empower you with cutting-edge insights and knowledge. Learn more ›
Welcome! đź‘‹ You are connected to CryptoSlate Alpha. To manage your wallet connection, click the button below.
If you don’t have enough, buy ACS on the following exchanges:
Access Protocol is a web3 monetization paywall. When users stake ACS, they can access paywalled content. Learn more ›
Disclaimer: By choosing to lock your ACS tokens with CryptoSlate, you accept and recognize that you will be bound by the terms and conditions of your third-party digital wallet provider, as well as any applicable terms and conditions of the Access Foundation. CryptoSlate shall have no responsibility or liability with regard to the provision, access, use, locking, security, integrity, value, or legal status of your ACS Tokens or your digital wallet, including any losses associated with your ACS tokens. It is solely your responsibility to assume the risks associated with locking your ACS tokens with CryptoSlate. For more information, visit our terms page.
The global crypto market cap is $1.79 trillion with a 24-hour volume of $41.51 billion. The price of Bitcoin is $47,730.70 and BTC market dominance is 52.2%. The price of Ethereum is $2,499.01 and ETH market dominance is 16.7%. The best performing cryptoasset sector is Insurance, which gained 6%.
Zero knowledge technology paves the way for a new era of privacy and scalability in blockchain applications.
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
While the blockchain industry has correctly pointed out key issues in the worlds of legacy tech, finance, art, and culture, the revolution promised is yet to materialize, with the tools being designed to address those challenges are not yet at the required standard.
Technical inefficiencies have stifled the development of truly decentralized systems, and decentralized finance (DeFi) platforms have shown vulnerabilities to data breaches of their own. From January to November 2023, over $1.7M in assets was lost due to hacks, with nearly 300 specific incidents.
As we begin 2024, things are looking brighter due to ongoing developments in zero knowledge (ZK) technology, which could be the key to unlocking the benefits of truly decentralized digital platforms. After gaining momentum in 2023, primarily through innovation in scaling solutions, the continued growth of the ZK industry this year should see a diversification and proliferation of use cases including important advancements in the areas of data protection, privacy, and compliance. 
In bringing more secure and efficient tools to blockchain developers, the widespread benefits of ZK technology will start to be felt, with 2024 seeing a broader range of applications across different industries. Rather than being deployed within isolated Web3-native use cases aiming to compete with traditional finance and tech, ZK tech can be integrated into legacy systems and platforms, imbuing them with the benefits of the decentralized values of crypto, significantly enhancing user empowerment. It achieves this by ensuring robust data control and privacy preservation, thereby facilitating a more liberated and secure usage experience without compromising the users’ peace of mind.
Simply put, zero knowledge proofs (ZKPs) allow one party, the prover, to validate a statement to a verifier without revealing anything other than this specific truth. In practice, ZKPs allow complex computations to be performed off-chain, reducing congestion on the blockchain. 
This has proved revolutionary to the Ethereum ecosystem, where rising demand for blockspace has led to an increasingly congested network with high fees, creating barriers to mass adoption. Scaling solutions like sharding, sidechains, state channels, and rollups have helped tackle scalability issues to improve developer and user experience while maintaining Ethereum’s well-regarded security and transparency values. 
The same properties that make ZK ideal for reducing congestion on decentralized networks also bring greater data protection benefits. Looking ahead, we can expect to see more projects harnessing ZK tech for a variety of use cases, not just for scaling but also for data protection and compliance, which will lay the groundwork for major changes in Web2 and Web3.
Putting aside all the benefits of scalability, it will be data protection that proves to be the killer use case for ZKPs, underpinning all other functions in blockchain applications. For context, data protection is a broader term than privacy as it encompasses security, integrity, and accessibility.
Data protection and privacy are often afterthoughts for people interacting online. This is by design – traditional digital platforms lure users in with free access and services, hiding the true cost in the fine print to collect and utilize valuable user data for analytics, targeting, and advertisement purposes. 
However, recent surveys reveal that consumers are increasingly worried about the risk of data breaches and privacy infringements from their tech devices, with up to three-quarters of survey respondents agreeing they should do more to protect themselves.
As data breaches get more costly – amounting to 4.45 million U.S. dollars on average in 2023 – projects across various industries are seeking innovative solutions to prevent and reduce the impact of hacks and exploits. By empowering users to store personal information off-chain and enabling secure sensitive data disclosure, ZKPs can reduce vulnerabilities caused by the collective storage of data, which has been a prime target for hackers. 
In 2024, the industry can expect a number of ZK-based privacy tools to advance and become user-ready, for example, ZK-login tools to streamline access to DeFi platforms, and ZK-based decentralized voting mechanisms to balance integrity and anonymity.
ZK technology can also address key data management problems in other sectors, proving to be a breakthrough tool for the mass adoption of blockchain technology. 
With increasing concerns about data breaches from users, traditional social media and Web2 platforms, which are often built on a data mining model, could integrate privacy-enhancing features for users powered by ZK technology, such as secure end-to-end messaging. 
In other cases, it may be institutions required to safeguard sensitive data sets that are the first adopters of ZKPs for privacy. For example, in supply chain management, logistics, and telemetry, ZKPs can be used to verify activity while disclosing the least amount of data necessary between two parties. Not only is this efficient, but it can also be important for maintaining intellectual property rights and reducing the data management burden of any one party.
Likewise, governments and other institutions that deal with sensitive data can adopt decentralized identifiers (DiDs) which can be used to verify identity and other information while optimizing for privacy. Since 2014, residents in Estonia have been granted a state-issued digital identity for access to public services, a model that the European Union is seeking and several countries are on the path to emulate.
Collaboration with traditional financial institutions could bring much-needed liquidity to DeFi, but integrations have previously been stifled by contradictions between the principles of anonymity and privacy associated with DeFi and the KYC requirements banks and large-scale investment corporations must abide by in many jurisdictions. By the same measure, traditional businesses may be put off by the transparent properties of the blockchain, not wishing to have the details of every transaction documented on a public ledger.  
With the use of ZKPs, DeFi platforms can verify that a user meets KYC requirements and also verify transactions without revealing identifying information or other superfluous information, striking a balance between DeFi values and TradFi responsibilities. For example, a report by Etonec demonstrates how ZKPs can be used for compliance in a privacy-preserving fiat stablecoin system. 
Similar to privacy-optimizing solutions, ZKPs can offer more customizable compliance options, tailored to user needs. This is important because individuals have unique preferences when it comes to convenience and data protection. To deliver financial freedom to the masses, DeFi platforms need to offer a wide range of options for users.
ZKPs support the modular evolution of blockchain, providing the building blocks to enable key functions like scaling, privacy, compliance, and importantly, interoperability.
In contrast to a monolithic blockchain like Bitcoin where all transactions are executed on a single layer, modular blockchains delegate functions to specific modules that make up an interoperable system. By reducing the workload of any specific component, modular blockchains reduce the likelihood of bugs and enable more efficient development. 
In the current landscape, layer-1 protocols are seen as competing, but with the modular evolution of blockchain, the notion of the blockchain layer will morph into more of a notion of modular building blocks. As small attestations of data that can be cheaply verified and bridged across chains, ZKPs will become the glue holding this interconnected system together.
With the specialization of tasks, each module will be able to advance faster – developers can focus on improving compliance, for example, because scaling is already being taken care of, leading to increased experimentation and innovation on all fronts.
In a constantly changing industry landscape and macroeconomic environment, adaptability is the key to the survival of any technology. Zero knowledge proofs have proven to be just that – an infinitely adaptable tool for addressing a wide range of challenges. Harnessing the power of ZK, this coming year we will begin to see the expansion of use cases beyond scaling, with a primary focus on data management, attestations, and applications across various sectors.
Kurt Hemecker is CEO of the Mina Foundation, the public benefit corporation serving the Mina Protocol, the world’s first zero knowledge (ZK)-native blockchain.
CryptoSlate is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI.
Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
Salty.IO introduces a revolutionary blockchain salt-hashing mechanism to enhance data security and privacy.
Disclaimer: By using this website, you agree to our Terms and Conditions and Privacy Policy. CryptoSlate has no affiliation or relationship with any coin, business, project or event unless explicitly stated otherwise. CryptoSlate is only an informational website that provides news about coins, blockchain companies, blockchain products and blockchain events. None of the information you read on CryptoSlate should be taken as investment advice. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own diligence before making any investment decisions. CryptoSlate is not accountable, directly or indirectly, for any damage or loss incurred, alleged or otherwise, in connection to the use or reliance of any content you read on the site.
© 2024 CryptoSlate. All rights reserved. Disclaimers | Terms | Privacy

Please add [email protected] to your email whitelist.
Stay connected via

source
Source: www.cryptoslate.com

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

LEAVE A REPLY

Please enter your comment!
Please enter your name here