How Bitcoin Combines Security, Privacy and Zero-Knowledge Proof?

Craig Wright insisted that Bitcoin was not designed for anonymity-because this would make it a natural choice for criminals.
Simple Application Server
USD1.00 New User Coupon
* Only 3,000 coupons available.
* Each new user can only get one coupon(except users from distributors).
* The coupon is valid for 30 days from the date of receipt.

If you want to learn about Bitcoin, sooner or later you need to deal with a series of difficult issues such as anonymity, privacy, and pseudonym. Craig White, the chief scientist of nChain, insists that Bitcoin is not designed for anonymity because it will provide a breeding ground for criminals.

Bitcoin is characterized by pseudonymousness, which represents the relevance of transactions. Bitcoin is different from cash because once Bitcoin is paid, its history will be difficult to trace. Although we cannot tell who is transferring currency on the blockchain, we can see all transaction details. So if we can judge the personal information of the trading account, the bitcoins they traded are traceable. The use of pseudonyms is a compromise method to make the system private enough to make individuals feel safe, while leaving unalterable evidence clues that can be followed if there is a problem.

However, some cryptocurrencies are not satisfied with the privacy level of Bitcoin’s pseudonymous transactions, so their encryption technology for anonymous transactions is called "zero-knowledge proof (ZKP)." Applicable to transactions in the financial industry. On the contrary, it can be a useful feature of the application developed by the BSV blockchain.

The so-called zero-knowledge proof is that they provide proof of something without revealing all the important details that are usually required to confirm an event or transaction. In other words, it allows the prover to show someone that an event has occurred while giving them "zero knowledge" of these important details.

To give a simple example: if you are color-blind, when the two balls your friend gave you look exactly the same, can you be sure they are of different colors? You can take the ball behind your back, show it to your friend, and then ask if you have changed the ball. If you always pass the test after several tests, we can be sure that your friend is telling the truth.

The ZKP scenario can only be applied to two related persons, but not to the third person. For the third person, even if you can see whether you are changing the ball, she cannot be sure that the ball is of a different color, because you and your friend may collude in front of her on the order and answer of the exchange. Only if you can decide for yourself whether to exchange and ask your friend to answer, can she have confidence in the conclusion.

Therefore, ZKP cannot recognize the difference between the two balls, but has an agent that can be used for verification. Translating this principle into a blockchain world requires some complex mathematics, but the principle is the same: you are trying to confirm the information without allowing the recipient to see the detailed information-for example, when the information needs to be kept secret.

Jad Wahab of nChain has been working on ZKP and has provided examples of these possible use cases that can use the BSV blockchain to provide key parts of application design:

ZKP can be used for identity checks or selective disclosure and access control: For example, you may want to confirm that you are over a certain age, but are not willing to reveal your actual age.

In voting or polling, you may only want to confirm that someone is eligible to vote, but for confidentiality reasons, you don’t want to create a list of these people.

ZKP is also useful when submitting certain information on the blockchain without revealing any information about the information (for example, this happens with the computing power of the information). Or for the review process, you want to prove something to a specific reviewer without revealing any information to others.

Judd said that developers do not necessarily need to understand the exact mechanism by which they want to incorporate ZKP into their products. He believes that "off-the-shelf" software will soon be developed, which can plug in designs and provide the required functions.