Beyond cryptocurrencies and AI, there's a third innovation that will soon dominate the news cycle and has the potential to change everyone’s life: Zero Knowledge (ZK) Proofs.

So, what exactly is ZK? In short, it's an advanced form of cryptography that allows you to prove a computation’s correctness using only the formula, without knowing the actual data.

Think of a simple example: a + b = c. We don't know the values of a or b, just the operation "+", but we can still prove that c = c.

Four Major Problems in IT

Currently, there are four global challenges that the IT sector is facing:

1. The Explosive Growth of Information: The amount of data being created is increasing at a staggering rate. It won’t be long before we might have to cover the entire planet with servers just to store photos, videos, and other data – not to mention the vast amounts being generated by AI.
2. Proving the Authenticity of Information: There’s currently no reliable way to prove that information is original. AI can generate content that looks and sounds like the real thing, and there have already been cases of fraud where an AI pretends to be a familiar person. How can we ensure that AI, like ChatGPT, is trained on truthful data?
3. The Uncertainty of Data Origins: In an era of endless server growth and varying capacities, the challenge of determining the true source of data becomes increasingly complex. Additionally, what are the costs associated with storing original data?
4. The Problem of Data Privacy: At the moment, privacy on the internet is nearly nonexistent. If you wish to do so, you can gather almost any private information on anyone or anything. There are currently no tools or technologies that can truly protect your privacy with code or encryption.

And the answer to all these problems is, of course, ZK-Proofs.

First Uses of ZK-Proofs

The concept of ZK-Proofs was first put into practical use within the ZCash project, during a period when the community placed great emphasis on privacy in payments. The underlying idea was straightforward: by being able to prove the validity of a transaction without disclosing the identities of the sender or recipient, it was possible to uphold the anonymity that is a fundamental characteristic of cash.

ZCash, which initially implemented ZK-Proofs, has now become largely outdated. Nevertheless, its developers made significant contributions by providing foundational code that paved the way for new opportunities.

Although the appeal of using ZK for solving Problem #4 in identification or authentication has waned over time, it's essential to recognize that for future KYC (Know Your Customer) technologies, there is currently no alternative technological solution. Existing methods such as hashing, caching, or even smart contracts are insufficient in addressing these issues; only ZK-Proofs have the capability to do so.

ZK Technology and Ethereum

Then there was an effort to integrate ZK technology into the Ethereum platform, but it was not fully successful. Nevertheless, valuable insights were gained from this attempt, similar to what was learned from ZCash.

The Tornado Cash project, built on ZK Proofs in Ethereum, allowed for anonymous payments through smart contracts. Despite its innovative use of ZK-Proofs, the project was shut down due to legal and regulatory actions. The trend of anonymous payments has faded, but ZK-Proofs were key to enabling this technology.

What’s even more important is that Ethereum’s blockchain has integrated the capability to create and verify ZK-Proof evidence at the protocol level. This development was a major milestone, as it addressed Problem #3: "The Uncertainty of Data Origins". Now, any service utilizing ZK-Proofs can leverage Ethereum’s decentralized network to validate computations, transforming Ethereum Layer 1 into a tool not only for generating digital assets like DOGE and PEPE but also for storing global data.

You might think it’s unrealistic — storing data on Ethereum is costly and impractical. But let’s take a closer look.

Storing Data on Ethereum: The Cost

While exploring Zero-Knowledge (ZK) technology for privacy applications, an additional benefit was discovered: ZK-Proofs have the capability to significantly compress data. For example, through a formula that organizes a photo's pixels into an image, combined with knowledge of the computation result, it is possible to compress a photo from several megabytes to just a few bytes using a ZK Proof.

This level of compression is unparalleled by any other technology. Traditional methods focus on compressing the information itself, but with the ever-growing data on smartphones, the use of a ZK storage device in an iPhone could potentially provide the freedom to capture unlimited photos without even having to pay for iCloud storage.

Google and Its Investment in Crypto

The recent advancement in ZK technology has positioned it as a potential game-changer due to its ability to achieve maximal theoretical data compression. Major global corporations specializing in data management, such as Google, AWS, and Microsoft, have taken notice of these developments. Research into ZK-Proofs is becoming increasingly essential for these companies as it presents an opportunity to significantly reduce the costs associated with storing media files.

Interestingly, the cryptographic technology crucial for the widespread adoption of crypto and Ethereum is now being developed by major IT corporations. Unlike crypto enthusiasts fighting for a fair Web3, these companies see ZK-Proofs as a practical necessity to reduce server costs for storing photos and videos. It's almost ironic that the key cryptographic technology for mass adoption is being developed by these tech giants, driven by their need to cut costs.

Furthermore, cloud service providers are currently grappling with the challenge of managing data growth by resorting to data deletion. ZK-Proofs, therefore, emerges as the solution for preserving digital assets in the long term. Failure to adopt such measures may result in the eventual deletion of data, including valuable insights and knowledge accumulated over time.

Considering that AI models like ChatGPT are trained on this accumulated data, it is important to contemplate the potential consequences of data loss. In the event of data deletion due to non-payment or other reasons, the ramifications could extend to future AI models, hindering their ability to learn and evolve from the wealth of knowledge that has been erased.

Your Blockchain, Your Rules: Solving Problems #2 and #3

What's next? Ethereum has introduced technologies like Rollups and Plasma, enabling Layer 2 blockchains and potentially extending to Layer 3, Layer 4, and beyond. If you want to ensure that your photos are genuinely yours and not AI-generated imitations, you can set up your own Layer 34523 blockchain at home to store ZK Proofs of your images. While "Layer 34523" may not sound glamorous, it offers decentralized and secure verification of your privacy and original content on the Ethereum blockchain. Each ZK Proof is validated by higher-level networks before being confirmed by the main Ethereum network. Plus, operating your own blockchain layer could be free, as you control it. Your blockchain, your rules.

Problem #3 is solved with this approach. And if your company sets up the layer to authenticate your news feed, Problem #2 is resolved as well. With personalized blockchains for each user, you could even discover if your Facebook friends are real people — though it might be surprising.

What’s Next for ZK-Proofs?

What happens if data compression and ZK-Proofs become widespread in our daily lives? A market for ZK-Proofs will likely emerge, and like any free market, you could participate and earn money from it. For example, if you need to compute a ZK-Proof for an image rapidly, you could post an offer on a proving market, and someone with a laptop might take on the task. Alternatively, they might process an entire batch of ZK-Proofs. Such proving markets already exist and are evolving.

As ZK-Proofs continue to integrate into various aspects of technology, their potential for transforming data verification and compression is increasingly apparent. By enabling more secure, private, and efficient ways to manage data, ZK-Proofs could become a significant factor in the future of digital interactions. Whether through personalized blockchains or emerging markets, the broader adoption of ZK-Proofs might reshape how we verify, store, and interact with information, opening new possibilities in privacy and data management.