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From privacy coins to shiny iris-scanning orbs, zero-knowledge proofs have become synonymous with crypto, scalability and privacy.

In 2022, investors gave over $700 million in funding to companies pushing the envelope with zero-knowledge proofs. This year, ZK-proofs has arguably become one of the biggest blockchain trends, with several major Ethereum scaling protocols hitting mainnet.

ZK-proofs are a cryptographic protocol that allows one party to prove the truth of a statement to another party without sharing any of the statement’s contents. 

An often-cited example is proving to a bartender that you’re old enough to drink without showing your ID or even telling them your birthdate.

Well, it seems that Satoshi Nakamoto, the pseudonymous creator of Bitcoin, once found the technology pretty interesting.

A better version of Bitcoin

In August 2010, the user “Red” on the online forum Bitcointalk asked whether there could be a way to improve the privacy of Bitcoin transactions. 

“One of the things that bugs me about bitcoin is that the entire history of transactions is completely public,” the forum-goer said. Another member piped in, suggesting that zero-knowledge proofs could be the solution. 

“This is a very interesting topic,” replied Nakamoto.

“If a solution was found, a much better, easier, more convenient implementation of Bitcoin would be possible.”

However, Nakamoto wasn’t convinced the tech could get around the “double-spending” problem — a fundamental flaw that exists in all digital cash protocols where a bad actor could spend the same digital tokens more than once.

“It’s the need to check for the absence of double-spends that requires global knowledge of all transactions,” said Nakamoto.

Satoshi Nakamoto’s response to users suggesting ZK-proofs to raise the privacy of Bitcoin transactions. (Bitcointalk)

“It’s hard to think of how to apply zero-knowledge-proofs in this case. We’re trying to prove the absence of something, which seems to require knowing about all and checking that the something isn’t included,” he argued.

Years later, someone cracks the code

Little did Nakamoto know that the cypherpunks would eventually find a way to solve the problem.

Privacy-focused cryptocurrency Zcash was launched in October 2016 by Electric Coin — a firm made up of computer scientists from the formative years of Bitcoin. Zcash was built by modifying Bitcoin’s original source code.



It was also the first time zero-knowledge proofs were used in a real peer-to-peer cryptocurrency, allowing users to hide or shield the crypto wallet address sending or receiving funds. 

The founding scientist of Zcash, Eli Ben-Sasson, would then go on to found StarkWare, a company known today for using zero-knowledge proofs to scale Ethereum through rollups. 

Ben-Sasson tells Magazine that the early enthusiasm from Bitcoin core developers for ZK-proofs played a “pivotal role” in his eventual co-founding of StarkWare.

“The Bitcoin 2013 conference in San Jose marked my Eureka moment.”

“Mike Hearn, a then-Bitcoin developer and one of the earliest Bitcoin adopters, went as far as to declare my talk on ZK-proofs as the most crucial of the event due to its potential impact on the future of blockchain.” 

“It was there that I realized the transformative potential of the Validity Proofs I was developing,” says Ben-Sasson.

Fast forward to today, Bitcoin itself now stands ready to enter the world of ZK-proofs.

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ZeroSync, a nonprofit founded by three computer scientists (and sponsored by StarkWare), is developing the world’s first ZK light client for Bitcoin.

“Long-term, we hope to bring mass scalability to Bitcoin using STARK Proofs,” said Robin Linus, co-founder of ZeroSync. 

Linus said that ZeroSync has designed and is currently implementing a layer-2 protocol that could allow Bitcoin to process more than 100 transactions per second while bringing privacy properties to Bitcoin.

“This could be a major feat in bringing Bitcoin toward the scalability it needs.”

So what would Nakamoto think?

“It’s evident from Satoshi’s past remarks that he strongly favored the use of ZK-proofs for privacy,” says Ben-Sasson. 

Nakamoto was a stickler for anonymity. His public interactions on Bitcointalk and his emails were all reportedly done using the IP-masking browser, Tor. It’s the main reason his public IP address could never be traced back to him. 

The administrator for Bitcointalk says Nakamoto has always used The Onion Router (Tor) to access the forum. (Bitcointalk)

The Bitcoin creator even dedicated a section to privacy in the Bitcoin white paper, suggesting users keep their public keys anonymous so that, even though the public can see transactions occurring, they don’t know who is involved, like a stock exchange.

Privacy diagram as shown in the Bitcoin white paper. (Bitcoin.org)

“It’s clear that Satoshi would have been intrigued by the privacy innovations my peers and I contributed to at Zcash,” says Ben-Sasson.

Unfortunately, Nakamoto never approached the subject again before he vanished from the public eye on Dec. 12, 2010 — the date of his last post on Bitcointalk. 

Ben-Sasson, however, believes if Nakamoto had continued to be active, he would have likely pushed to bring ZK-proofs to Bitcoin

“While they have recently found their way into Bitcoin through ZeroSync, I believe Satoshi would have been inclined to make the necessary adjustments to integrate them further,” he says. 

“After all, for Bitcoin to realize its vision as a global currency, the imperative to scale cannot be ignored, especially considering its current state of ossification.”

Felix Ng

Felix Ng

Felix Ng first began writing about the blockchain industry through the lens of a gambling industry journalist and editor in 2015. He has since moved into covering the blockchain space full-time. He is most interested in innovative blockchain technology aimed at solving real-world challenges.

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White House reportedly mulling pardon for Binance founder CZ

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White House reportedly mulling pardon for Binance founder CZ

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Binance co-founder Changpeng Zhao said that being considered for a presidential pardon from Trump would be “great news if true.”

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Fears Trump may lose focus after praise for Gaza peace deal at Egypt summit

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Britain has been playing a role behind the scenes of Trump's deal between Israel and Hamas | Beth Rigby

Sir Keir Starmer will on Monday join world leaders at a historic summit in Egypt to witness the signing of the Gaza peace plan to end two years of conflict, bloodshed and suffering, that has cost tens of thousands of lives and turned Gaza into a wasteland.

Travelling over to Egypt, flanked by his national security advisor Jonathan Powell, the prime minister told me it was a “massive moment” and one that is genuinely historic.

US President Donald Trump moved decisively last week to end this bloody war, pushing Israeli Prime Minister Benjamin Netanyahu and Hamas into a ceasefire as part of his 20-point peace plan.

Pic: AP
Image:
Pic: AP

In the flurry of the following 48 hours, Mr Starmer and another twenty or so leaders were invited to Egypt to bear witness to the signing of this deal, with many of them deserving some credit for the effort they made to bring this deal around, not least the leaders of Qatar, Egypt and Turkey, who pressed Hamas to sign up to this deal.

On Monday, the remaining 20 living hostages are finally set to be released, along with the bodies of another 28 who were either killed or died in captivity, and aid is due to flow back into a starving Gaza.

Some 1,200 Israelis were killed on 7 October 2023, with another 250 taken hostage. In the subsequent war, most of Gaza’s two million population has been displaced. More than 67,000 Gazans have been killed, according to Palestinian health officials

Then, the signing ceremony is due to take place on Monday afternoon in Sharm el-Sheikh. It will be a momentous moment after a long and bloody war.

More on Israel-hamas War

But it is only just the beginning of a long process to rebuild Gaza and try to secure a lasting peace in the region.

The immediate focus for the UK and other nations will be to get aid into Gaza with the UK committing £20m on Monday for water, sanitation and hygiene services for Gazans.

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Humanitarian aid rolls into Gaza

But the bigger focus for the UK and other European allies is what happens after the hostages are released and Israel withdraws its troops.

Because what happens next is a much bigger and more complicated task: rebuilding Gaza; turning it into a terrorist-free zone; governing Gaza – the current plan is for a temporary apolitical committee; creating an international stabilisation force and all the tensions that could bring about – which troops each side would allow in; a commitment for Israel not to occupy or annex Gaza, even as Netanyahu makes plain his opposition to that plan.

The scale of the challenge is matched by the scale of devastation caused by this brutal war.

The prime minister will tomorrow set out his ambition for the UK to play a leading role in the next phase of the peace plan.

Back home the UK is hosting a three-day conference on Gaza’s recovery and reconstruction.

Last week, France hosted European diplomats and key figures from Middle Eastern countries, Egypt, Jordan, Saudi Arabia and Qatar and later this week, the German chancellor is hoping to organise a conference on the reconstruction of Gaza with the Egyptians.

But in reality, European leaders know the key to phase two remains the key to phase one: and that’s Donald Trump.

As one UK figure put it to me over the weekend: “There is lots of praise, rightly, for the US president, who got this over the line, but the big challenge for us post-war is implementing the plan. Clearly, Arab partners are concerned the US will lose focus”.

The prime minister knows this and has made a point, at every point, to praise Mr Trump.

Bridget Phillipson and Mike Huckabee. Pics: Sky/AP
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Bridget Phillipson and Mike Huckabee. Pics: Sky/AP

His cabinet minister Bridget Phillipson learned that diplomatic lesson the hard way on Sunday when she was publicly lambasted by the US ambassador to Israel Mike Huckabee for suggesting to my colleague Trevor Phillips that the UK “had played a key role behind the scenes” and failed to mention Mr Trump by name.

“I assure you she is delusional,” tweeted Governor Huckabee. “She can thank @realDonaldTrump anytime just to set the record straight”.

On Monday, leaders will rightly be praising Mr Trump for securing the breakthrough to stop the fighting and get the remaining hostages home.

People hug next in Hostages Square. Pic: Reuters
Image:
People hug next in Hostages Square. Pic: Reuters

But this is only the beginning of a very long journey ahead to push through the rest of the 19-point plan and stop the region from falling back into conflict.

Britain has, I am told, been playing a role behind the scenes. The PM’s national security adviser Mr Powell was in Egypt last week and has been in daily touch with his US counterpart Steve Witkoff, according to government sources. Next week the King of Jordan will come to the UK.

Part of the UK’s task will be to get more involved, with the government and European partners keen to get further European representation on Trump’s temporary governance committee for Gaza, which Tony Blair (who was not recommended or endorsed by the UK) is on and Mr Trump will chair.

The committee will include other heads of states and members, including qualified Palestinians and international experts.

As for the former prime minister’s involvement, there hasn’t been an overt ringing endorsement from the UK government.

It’s helpful to have Mr Blair at the table because he can communicate back to the current government, but equally, as one diplomatic source put it to me: “While a lot of people in the Middle East acknowledge his experience, expertise and contact book, they don’t like him and we need – sooner rather than later – other names included that Gulf partners can get behind.”

On Monday it will be the US, Egypt, Qatar and Turkey that sign off on the peace plan they directly negotiated, as other Middle Eastern and European leaders, who have flown into Sharm el-Sheikh to bear witness, look on.

But in the coming days and weeks, there will need to be a big international effort, led by Mr Trump, not just to secure the peace, but to keep it.

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