Blockchain turning red: why technology has become the focus of Silicon Valley blockchain research

 Blockchain turning red: why technology has become the focus of Silicon Valley blockchain research

In order to explore the development frontier of the latest blockchain technology, Silicon Valley went to attend the annual old Jinshan blockchain summit, and interviewed one of the speakers of this conference, benediktb u00fc NZ, inventor of the bulletproofs theory from Stanford University, to discuss the connotation of zero knowledge proof technology and its significance for the development of blockchain.


Benediktb u00fc NZ, PhD, applied cryptogroup, Stanford University, is the author of the theory of bulletproofs. Chief scientist and co-founder of findora, a start-up.

Benedikt said that in fact, the essence of blockchain is cryptography. The concept of blockchain came into being after the emergence of bitcoin in 2009. As one of the three foundations of modern cryptography, zero knowledge proof technology was proposed by MIT professors Shafi Goldwasser, Silvio Micali and cryptography master Charles rackoff as early as 1985. In 2012, Shafi Goldwasser and Silvio Micali also won the Turing prize, which is known as the Nobel Prize in computer industry, for their pioneering contributions in modern cryptography and zero knowledge proof.

Therefore, zero knowledge proof is prior to blockchain, and has already reached a high theoretical height. However, the early zero knowledge proof theory does not have a good application scenario, only staying at the theoretical level. It was not until the emergence of blockchain that the opportunity for zero knowledge proof was created.

(MIT professors Shafi Goldwasser and Silvio Micali won the Turing Award, with pictures from the Internet)

In short, zero knowledge proof means that the certifier knows the answer to the question. He needs to prove the fact that he knows the answer to the verifier, but requires the verifier not to get any information about the answer.

Does it sound a little dizzy? It doesnt matter. Let me give you a simple example.

You and your partner have a room in front of them. There is a password lock on the door. You need to prove to your partner that you know the password of the lock, but you dont want to tell him how much the password is. So what should you do? Your partner knows that there is a book in the room that he has written his name, and you only need to show it to him to prove that you can enter the room.

In this process, you dont need to tell your partner directly what the password is, but you can prove the fact that you know the password through the book with his name.

The relationship between zero knowledge proof technology and blockchain?

The concept is not difficult to understand, but why is zero knowledge proof important for the development of blockchain in the next step?

Lets take a brief look at the trading principle of bitcoin.

If a wants to transfer a bitcoin to B, then we think of bitcoin as a check. If a wants to transfer the owned check to B, he needs to create a new check for B and tear up his original check in front of B. In this process, the transaction addresses of the two must be associated. So, what are the consequences?

(Silicon Valley insight mapping)

Benedikt explained to the spy that the anonymity of bitcoin is only reflected in the fact that the address has no real person identity, but all transaction information is completely open. So, once someone knows your bitcoin address (for example, he turns your account), he can check all your transaction history and balance from the chain. This kind of privacy exposed problems will lay a deep hidden danger for large-scale commercial applications in the future.

For this reason, zero knowledge proof technology is particularly important. What can be changed by using it?

Take zcash, which is the first time to apply zero knowledge proof technology to digital currency, as an example, or a to B.

Different from bitcoin, as voucher will have a series of voucher numbers. When a is transferred to B, a does not need to exchange address directly with B, but has a third-party voucher void list. By entering the invoice code of a that needs to be voided and using the note void method, it can be proved that Alices check is invalid, and then B will get a new effective voucher number. In this way, B does not need to see as voucher, but it still realizes the transfer of asset ownership.

(Silicon Valley insight mapping)

In the process of zero knowledge proof, there are two main problems, one is who will be the trusted third party (trusted set-up), the other is whether the performance is good enough (verification time & proof size). Therefore, many scholars began to study different solutions for these two dimensions. Some of them focused on tackling performance problems, such as Snark, sonic, plonk, Libra (not Facebooks Library) proposed by Berkeley University, and others on eliminating trusted third party problems, such as bulletproof proposed by Benedikt and supersonic being optimized.

Are so many nouns dizzy? In short, you can think of zero knowledge proof as an orchard. Bulletproof, Snark, sonic are like oranges, apples, bananas and so on.

(the picture is from the Internet and the copyright belongs to the original author)

Bulletproofs invented by Benedikt, an innovative invention that does not need the setting of trusted third party. Monroes Monroe coins and JPMorgan are all based on the application of bulletproofs, which reduces the cost of Monroe coins by 97%. Its advantage is that using short proof can realize the privacy transaction of low and medium complexity. However, the disadvantage is that the privacy support for complex transactions is not ideal. Therefore, when the whole blockchain is proved to be effective, bulletproofs is limited.

Benedikt also stressed that the current zero knowledge proof technologies have their own emphases and strengths, while everyone is learning from each other and making progress together, hoping to find an optimal solution in a multi-dimensional way. As Newton said, if we can see further, it is because we stand on the shoulders of giants. All our researchers are climbing the ladder step by step.

Where can zero knowledge proof be applied?

You must want to know, what kind of changes can zero knowledge proof bring to which industries?

Benedikt said that before the emergence of blockchain, zero knowledge proof as an encryption technology had many applications in the computer field. For example, in order to avoid hacker tracking the address, the web browser we often watch uses related technologies to ensure security. For another example, some big data analysis companies, in order to protect the privacy of customers, draw data analysis conclusions without directly seeing each data and address. In his opinion, with the development of financial industry after the emergence of blockchain, zero knowledge proof technology will play a huge role in the financial field.

At present, Benedikt, as the chief scientist, and his Stanford doctoral classmates, Charles Lu and Ben Fisch, have jointly created a project called findora. The vision is to establish a global financial decentralization network, protocol, bottom layer and standard. At present, Benedikt has been supported by Stanford foundation, and is under the guidance of John Paul, the former CEO of the foundation.

(picture from findora website)

The reason for this project is that they believe that the current maturity of zero knowledge proof technology has developed to the stage of commercial application. At the same time, the development of financial industry, especially the development of digital currency, will have a strong technical demand for zero knowledge proof.

Why is there such a demand?

First of all, lets take a look at the three main payment methods in the current market. One is the completely decentralized chain of Facebook Libra, Ethereum, bitcoin, etc., which can be used for payment. The two is centralization of Alipay, WeChat payment and bank transfer. Third, zcash, monero, findora and other payment networks with privacy protection.

The three payment methods, decentralized Libra, Ethereum and bitcoin, have high transparency to the public, but the privacy is the worst; the centralized organization of the traditional third-party giant is of medium privacy because the transaction information is only known by the third party; and the untraceable privacy payment using zero knowledge proof technology has the highest privacy.

Obviously, most users will not want their property transaction amount to be seen or tracked by everyone, so there is a need for privacy.

In addition to currency payment, in hedge funds, exchanges, P2P and other financial applications, not only privacy, but also complex compliance is required, which requires that the financial network can support very complex transactions, but also ensure a high degree of privacy and efficiency, and may also ensure the auditability of transactions, so as to obtain considerable trust from customers.

This is what the findora project wants to do. Through zero knowledge proof technology, a financial platform that supports complex transactions, but also has a high degree of privacy, efficiency and auditability is established.

(the picture is from the Internet and the copyright belongs to the original author)

For example, in the investment fund management, the current fund can see which investors have subscribed how many shares of the fund with how much finance, but through the zero knowledge proof technology, the fund manager can only know the overall fund size, but will not know the specific amount of funds from each investor.

In addition, they have developed several zero knowledge proof tools. Some of them can be used for privacy protection calculation, which plays an important role in helping sealed bidding auction, dark pool trading, fair lottery and so on. There are also tools to prove compliance that financial institutions can use to prove their compliance while protecting privacy.

Benedikt said that the new superstonic technology they developed for findora is the first snark that does not need to be trusted, and the size of the proof is very small, for example: the 1 million gate with high complexity only needs 10-20kb. In this way, the computational complexity, reliability and verification speed are further guaranteed.

(Benedikt shares technology at the conference)

What other difficulties of blockchain need to be overcome?

In addition to the privacy problem solved by zero knowledge proof, Benedikt told Xiaotan that he believed that transaction efficiency and energy consumption were two other key points in the process of blockchain technology improvement.

Blockchain has achieved decentralization and security, but the improvement of transaction speed has become a problem. Taking bitcoin as an example, bitcoin currently supports at most 7 or 8 transactions per second, but visa can support 3000 transactions per second in traditional payment. Obviously, if blockchain is to develop on a large scale, the transaction speed must be improved.

In addition, the problem of energy consumption also needs to be solved. In the past 10 years since the advent of bitcoin, the total energy consumption of bitcoin network has been growing at an amazing speed as the price keeps breaking new highs. According to the latest report released by the Research Institute of Cambridge University, the power consumption level of the whole bitcoin network in 2019 has exceeded that of Switzerland, Greece and other countries. Benedikt said that without solving the problem of energy consumption, the development of blockchain does not have the sustainability of development.

(energy consumption of bitcoin in 2019, photo from Cambridge University research, copyright belongs to the original author)

In view of these problems, experts and scholars are now studying in different directions. In addition to Benedikt, I also met many young scholars like him at the summit. They are from the United States, Europe, China, Japan Some of them are studying for doctorates, some are blockchain technology practitioners, and we are all gathered to share their latest research.

As Benedikt told me, researchers all over the world are working together to climb the peak of blockchain. It is these people who have unlimited enthusiasm for cryptography research who continuously inject fresh blood into blockchain and light its way forward that will make the future development of blockchain unknown and charming.

Want to learn more about the findora project? Available at:

Want to learn more about zero knowledge proof technology? You can view the following papers:




(thanks to Dr. Hu Yuncong and Zhang Jiaheng of the University of California, Berkeley for their theoretical guidance in the process of writing.)

Source: Silicon Valley spy editor in charge: Li Yipeng nbjs9851