If you work or are interested in the blockchain industry, you might see ZK being incorporated everywhere. Today, I'm going to briefly discuss its usage in blockchain and web3 gaming.

In cryptography, a zero-knowledge proof (ZKP) is a method by which one party (the prover) can prove to another party (the verifier) that a given statement is true, while avoiding conveying any information beyond the fact of the statement's truth.

ZKPs were first introduced in a 1985 paper by MIT researchers Shafi Goldwasser, Silvio Micali, and Charles Rackoff. The paper, titled "The Knowledge Complexity of Interactive Proof-Systems", introduced key concepts, including an interactive proof (IP) hierarchy, and conceived the concept of knowledge complexity.

One of the most common use cases is ZK rollups as a scaling solution, particularly used in L2s. ZK rollups bundle transactions into batches that are executed off-chain. ZK rollup operators submit a summary of the changes required to represent all the transactions in a batch rather than sending each transaction individually. They also produce validity proofs to demonstrate the correctness of their changes. This addresses the blockchain scalability trilemma by allowing blockchains to scale with rollups without compromising decentralization and security.

Another popular use case involves protocols using ZKP for anonymity. Zcash, a pioneer of ZKP usage in the blockchain industry, utilizes ZKP to generate privacy-preserving transactions. zk-SNARKs are used to prove that a transaction is valid without revealing any details about the transaction itself. When a ZCash user sends a transaction, the data is encrypted using zk-SNARKs and added to the public ledger. Tornado Cash also uses ZKP to remove the link between withdrawal and deposit, maintaining the anonymity of the transaction.

There are currently two common ZKP applications in web3 gaming. The first is using ZKP in authentication systems to keep user profiles secure and anonymous. For systems employing existing social login methods, such as Google and Facebook, a ZKP is generated with the token returned from the auth provider and is used to manage users’ wallets. This disconnects the link between users’ wallets and their social accounts. For optimal security, the auth provider can implement a ZK proof system, allowing them to verify users’ secrets without knowing the secret itself.

Another emerging use case is ZK-powered on-chain gaming. In an on-chain game, each transaction is published on the blockchain, making it visible to the world. However, ZK-powered on-chain games submit a zk-proof for each in-game action to ensure the step is valid while keeping players’ activities private. This is especially useful for games requiring incomplete information, such as poker and other strategy games. Dark forest is a good example for people who are interested in learning more.

Computation is the most significant challenge that hinders ZKP from mass adoption. Both generation and verification require complex computations. These calculations demand longer processing time or more powerful machines, which increases the cost for the end user. For instance, verifying a single zk-SNARK proof on Ethereum requires 500,000 gas, whereas an ERC-20 token approval only requires 45,000 gas.

Trustlessness is another hurdle. Participants are required to provide secret inputs to prove the statement is true, but they do not have the means to independently verify the application's ZK process. Efforts are ongoing to eliminate the need for trusted setups in ZKP based applications, but ensuring trustlessness remains a persistent challenge.

Regulation is another concern. Tornado Cash was sanctioned by the US government for its use in money laundering. Balancing privacy protection and preventing exploitation by malicious actors poses a significant challenge to the blockchain industry and government policymakers.

In summary, it’s still early days for ZKP, and both academic and industry experts are dedicating a great deal of resources to it, with the hope of seeing ZKP’s mass adoption in the near future.