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Why are proofs valuable?
Since the 1970s, research in cryptographic primitives has led to advances in proofs that have provided two useful innovations. The first is data compression: decreasing computational power or bandwidth required to solve a problem without a material change in the result. The second is security. The first interactive proof involved flipping a “fair” coin over a telephone. What does this mean? Cryptographic primitives1 enabled two people with no physical access to each other or a shared coin (trusted or otherwise) to determine the result of a 50/50 “coin flip” in a completely trustless manner by following a protocol. That protocol is an interactive proof.
Please note that the trust-minimized environment created by proofs is different than the trust-minimized environment created by consensus mechanisms2 which utilize majority rule alongside proofs known as cryptographic signatures. Cryptographic signatures3 are a form of a zero-knowledge proof.
This paper covers:
- Why are proofs valuable?
- What are the current substitute products for proofs?
- Why should you care?
- How do proofs work?
- What are the critical proof strategies and their features?
- Problems that proofs must solve to become commercially viable
- What are the solutions to the problems?
- Who is working on these problems?
- Key terms
Endnotes
- Cryptographic primitives: mathematical algorithms which are owned by no one (for example, no one owns Newton’s or Einstein’s equations).
- Consensus mechanism: a method for validating data that underlies all decentralized ledger technology. For blockchain technology, this method is utilized to validate that data being added to the blockchain is accurate, where majority rules (i.e., the network needs majority of network participants to agree). Bad actors in this validation process may be penalized via electricity (in the proof of work consensus mechanism) or token (in the proof of stake consensus mechanism) slashing.
- Cryptographic signature: a mathematical scheme for verifying the authenticity of an entity or participant, which initiates the viewing of or interaction with a piece of encrypted information.
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