Alexander Ray, CEO & cofounder of Albus Protocol, a regulation-compliant DeFi framework for public blockchains.
Zero Knowledge Proof (ZKP) technology has emerged as a powerful tool for businesses seeking to enhance data security and privacy. By allowing one party to prove knowledge of certain information to another party without revealing the actual data, ZKP offers a promising solution to the perennial problem of safeguarding sensitive information. In this column, I will explore in detail the challenges facing Zero Knowledge Proof technology and consider potential solutions.
Problem 1: Limitations In Sensitive Data Disclosure
While ZKP enables secure interactions without revealing specific data, there are times when companies may need to disclose personal information in response to financial crimes or government inquiries. For example, during an investigation, authorities may request access to user data for identification or verification purposes. The use of ZKP alone may not be enough to address these requests adequately.
Various countries have legal frameworks in place that require businesses to provide user information to the government under specific circumstances. These obligations typically arise in cases related to national security, criminal investigations or compliance with regulatory requirements. For example, in the United States, the Patriot Act grants the government the authority to request user data from businesses for intelligence and law enforcement purposes. Similarly, in the United Kingdom, the Investigatory Powers Act empowers government agencies to demand user information from businesses in the interest of national security. Additionally, data retention laws in several jurisdictions require companies to retain user data for a certain period of time so that law enforcement agencies can access it if necessary. It’s important for businesses to be aware of and comply with the relevant laws in the jurisdictions where they operate to ensure lawful data disclosure when required.
The EU’s legislative counterpart is the Anti-Money Laundering Directive (AMLD). The AMLD is a set of regulations and guidelines issued by the European Union (EU) to prevent money laundering and combat the financing of terrorism. The Directive establishes a framework for financial institutions, such as banks, credit institutions and money service businesses, to implement due diligence procedures, customer identification measures and record-keeping obligations.
As we can see, ZKP is simply not enough for businesses to comply with the current laws. Even if a business adopts and uses ZKP, it still needs to store users’ personal data, and ZKP provides no means to do that.
One possible solution is to adopt an encryption-based approach that stores user data in encrypted form and requires multiple key shares for decryption. This way, a company can retain control over the personal data of its users while still allowing for disclosure when required by law. Additionally, companies can explore the use of such techniques as secure multi-party computation (MPC), where multiple parties collaboratively compute a result without revealing their individual inputs. These approaches can strike a balance between privacy and the need for data disclosure.
Problem 2: Vulnerability To Random Number Generator Attacks
Random number generators (RNGs) are used to create something called a Trusted Setup. A trusted setup is a collaborative procedure involving multiple parties designed to create essential parameters used in proof systems and cryptographic protocols. The process entails generating random numbers (secrets), encrypting them, utilizing them for data generation and subsequently erasing them to maintain the integrity of the protocol. These random values are often referred to as “toxic wastes” since their permanent deletion is crucial for security. Due to the necessity of trust among the participants for the setup to be effective, this procedure is aptly named a “trusted setup.”
RNGs generate unpredictable values that form the basis of cryptographic operations. However, if an attacker gains unauthorized access to an RNG, they can potentially bypass security checks and manipulate the ZKP process, compromising the entire system’s integrity. Additionally, if “secrets” aren’t deleted immediately after the Trust Setup, hackers can get access to them, leading to RNGS vulnerability.
To mitigate this risk, organizations must implement robust security measures to protect the RNG infrastructure. This includes employing hardware-based RNGs, which are less susceptible to software-based attacks. Additionally, stringent access controls must be in place to limit unauthorized access to RNG components. The RNG software must be audited and updated on a regular basis to promptly address any discovered vulnerabilities. Furthermore, cryptographic protocols that detect and respond to compromised RNG instances can provide an additional layer of security.
Problem 3: Scalability And Performance Considerations
Another challenge facing Zero Knowledge Proof technology is scalability and performance. ZKP protocols can be computationally intensive, requiring significant processing power and time, which may not be feasible for real-time applications or systems with high transaction volumes.
Addressing this challenge involves exploring efficient implementation techniques and optimizing the underlying cryptographic algorithms used in ZKP protocols. Ongoing research and development efforts in this area aim to reduce the computational overhead associated with ZKP, making it more practical for a wide range of applications. Additionally, advancements in hardware acceleration, such as the use of specialized chips or dedicated hardware modules, can significantly enhance the performance of ZKP protocols.
Problem 4: Complexity And User Experience
Zero Knowledge Proof protocols can be complex and difficult for users to understand and interact with, posing a potential barrier to widespread adoption. User-friendly interfaces and simplified interactions are crucial for businesses seeking to capitalize on the benefits of ZKP.
This issue can be addressed by developing intuitive user interfaces that abstract the technical complexities of ZKP and provide clear instructions and explanations. Designing user-centric experiences can help build trust and confidence in ZKP technology, encouraging broader adoption by both businesses and individuals.
Conclusion
Businesses can make their ZKP implementations more reliable and trusted by introducing a mechanism of lawful data disclosure, bolstering RNG security, boosting performance and improving the user experience.
As ZKP continues to evolve, collaboration between researchers, industry experts and policymakers will be crucial to overcoming the challenges and maximizing the potential of this groundbreaking technology. In doing so, we can pave the way for a future where data security and privacy coexist harmoniously with the demands of modern businesses and society as a whole.
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