An Introduction to the Use of zk-SNARKs in Blockchains

Abstract

The advent of blockchain brings a wide horizon of opportunities to the world. The first such example, Bitcoin, strongly advocates a principle of total openness, which is reflected in the fact that all transactions are public and the history of each account can easily be reconstructed. Although an account cannot immediately be linked to a real-world identity, this does not grant strong guarantees of anonymity, and such a feature of Bitcoin and similar blockchains prevents it from reaching wide acceptance for financial use-cases, where users often desire strong confidentiality of their balances and financial history. As a consequence, there has recently been a growing interest in privacy-enhancing technologies that ensure public permissionless blockchains can keep the details of transactions private according to particular use cases. One of the most promising technologies in this area is Zero-Knowledge Proofs, and in particular zk-SNARKs, due to their very short proofs and verification times. This makes them well suited to be used as transaction data, hiding all the private details at the same time they guarantee the integrity and accuracy of the transaction, and to be verified on-chain by a smart contract. This paper is an introductory presentation of this topic, what advantages zk-SNARKs bring to the blockchain ecosystem and how they can be tailored to specific applications.