Zero-Knowledge Proof & Rollup

We’ve finally come to the end of the road after a long 26 weeks. On this zero-to-hero crypto glossary journey, here’s one last piece for the ride: Zero-Knowledge Proof and Rollup.

What exactly does the phrase “zero-knowledge” mean in the crypto space? In traditional finance, we’re used to central entities, such as banks, knowing every aspect of a transaction made between two parties. Nothing is secret — identities of the sender and receiver, how much the transaction is worth and other sensitive information. 

In the world of blockchain technology, where permissionless and trustless systems underpin a majority of networks at present, cryptographic techniques such as zero-knowledge protocols help to ensure only necessary information is transmitted in any transaction or communication.

In this case, Person A can effectively receive data from Person B and know for certain — without additional authentication — that the data is real and verified. On the virtual plane, where data is so easily stolen, this capability adds the benefit of further encrypting data, making it less vulnerable to malicious online attacks.

A large amount of transactions occurring on an already congested network, such as Ethereum’s, adds immense strain to its main blockchain. Zero-knowledge rollups allow for transactions to be processed together as a group, without a smart contract, optimizing speed and efficiency via side chains. This reduces the data load required in every transaction that  eventually passes through the main chain, at the end of the process, as the zero-knowledge proof methodology minimizes the computing power used in an average transaction.