What will “ZKP + Bitcoin” bring? – Bing Ventures

What does "ZKP + Bitcoin" bring? - Bing Ventures

More and more teams are adopting zero-knowledge proof technology in blockchain infrastructure and dApps. However, most projects are developed based on Ethereum. Nevertheless, Bitcoin and zero-knowledge proof technology actually have natural combination genes, which is currently lacking the attention it deserves in this field. How will the combination of zero-knowledge proof technology and Bitcoin empower the Bitcoin network? Bing Ventures investment manager Kyle Liu explores this topic from the perspectives of technical principles and application prospects.

Zero-knowledge proofs can enhance the privacy and scalability of Bitcoin by hiding transaction details such as amounts, addresses, inputs, and outputs while preserving their validity and integrity, thereby preventing third-party tracking and analyzing of users’ transaction activities. Zero-knowledge proofs can also increase the innovation of Bitcoin by supporting more functionalities and applications. For instance, using ZK-SNARKs can enable more complex and flexible contracts to be executed without revealing information or increasing costs. Ultimately, zero-knowledge proofs will make Bitcoin more trustless and decentralized, aligning with its core values. As technology continues to evolve and improve, the potential of Bitcoin and ZKP will also be further explored.

However, implementing zero-knowledge proofs in Bitcoin is challenging. Take Zcash as an example, which uses ZK-SNARKs, there are some limitations. Firstly, Zcash is based on the UTXO model, meaning that transaction information is not entirely concealed but only shielded. As a result, attackers can infer some useful information by analyzing the patterns and flow of transaction information. This also means that Zcash’s degree of privacy protection is not entirely reliable. Secondly, Zcash is based on a separate network from Bitcoin, making it more challenging to integrate with other applications. This limits its potential for wider application and further impedes its development. One reason for the low actual usage of Zcash is that the cost of privacy transactions is much higher than that of public transactions, which also limits its application scope.

Reference: https://medium.com/@BingVentures/zkp-bitcoin-%E4%BC%9A%E5%B8%A6%E6%9D%A5%E4%BB%80%E4%B9%88-d33942a6ccda

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