One of the technologies that will undoubtedly change Web3 is zero-knowledge (ZK) cryptography. ZK has long been considered a potential game-changer for ensuring the privacy, security and integrity of blockchain applications. The rapid investment and development of zero-knowledge proofs is an important signal that the technology is getting ready for prime time.
Here are four predictions for where the technology will go in 2023, in addition to the players, projects and protocols that will drive – and capture – the most value.
A ZK-powered layer 1 smart-contract blockchain chain will launch in 2023
While a few chains – including Mina, ZCash and Celo – already use zero-knowledge cryptography in production, none of them provide true programmability or full on-chain smart contract functionality. As a result, they are limited in what they can do. But that’s changing.
A smart-contract blockchain running a ZK-powered virtual machine will launch next year.
Building a new layer 1 blockchain from the ground up with all the right primitives in place is easier than trying to adapt Ethereum or other blockchains to a technology it wasn’t initially designed for. A ZK-focused chain may be impacted by the lack of ZK-native coder, however.
Rollups will remain centralized, and zkEVMs will remain impractical
Several rollup implementations – both ZK and Optimistic – are live on Ethereum today. All of them rely on a single, centralized party known as a sequencer to order transactions. The challenge of decentralizing a rollup is both a technical and legal one. These include limits of full smart-contract functionality as well as questions of whether fee structures between L1s and L2s violate some securities law.
Hardware acceleration will make ZK more practical, useful and accessible
One of the most promising trends for Zero-Knowledge cryptography is hardware acceleration. When we think back to the early days of the Web, it was the integration of the Advanced Encryption Standard (AES), a cryptography instruction set designed by Intel, that enabled the ubiquity of internet-based communication protocol https. The same is probably true for ZKs.
Companies will have to choose a side on privacy
The issue is urgent. Web3 companies that truly hold the values of the space will take a stand to defend the rights of users and use technology like Zero-Knowledge cryptography to ensure they are protected. If we don’t, we risk creating a global financial panopticon that is far more invasive than our current financial system.
– Alex Pruden, CEO of Aleo and founder of ZPrize
