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‘Zero-Knowledge Proofs’ Could Boost Blockchain Adoption on Wall Street
Among other things, Blockchain He is known for his transparencyThe public ledger records every transaction and traces it back to a miner. Such transparency, however, has hindered adoption of the technology on Wall Street, where client and transaction confidentiality is a necessity for operations. But that could soon change.
According to a recent Bloomberg articleA “mind-blowing” mathematical operation known as “Zero Knowledge Proof” has enabled the encryption of transactions on the platform, expanding the reach and uses of blockchain on Wall Street. The Enterprise Ethereum Alliance, whose members include the likes of JPMorgan Chase & Co. (JPM) and Credit Suisse Group AG (Customer care), is already said to be working to include the test in Quorum, his distributed ledger.
Only a public company – Zcash – uses proofs to ensure privacy in blockchain transactions. The service allows you to hide the user’s identity and the amount of money transacted between parties. Ethereal, the most popular implementation of blockchain, does not have this capability. The blockchain’s master node itself is updated with proofs as part of the Metropolis project.
Transaction transparency is the unique selling point of blockchain for network effects. However, such transparency is also the biggest obstacle to adoption of the system on Wall Street. On a blockchain network, orders are broadcast as smart contractsthat are visible to miners. It is possible that unscrupulous miners and traders profit from this knowledge through at the head of the raceor skip the queues. According to Zooko Wilcox, co-founder of Zcash, zero-knowledge proofs “cryptographically prove the truth of something without revealing any information about it other than that it is true.”
Several financial services firms have been exploring the use of blockchain in their transactions in recent times. For example, The Goldman Sachs Group, Inc. (GS) recently announced its intention to establish a Bitcoin trading operation. Similarly, JPMorgan is part of the consortium who developed Quorum, an Ethereum-based ledger. The World Economic Forum duct a complete survey of global financial services and found that 80% of those banks were ready to launch blockchain-related projects. The international agency said that the Internet was entering a second blockchain-based era. (See also: BlackRock CEO is a ‘big believer’ in blockchain)