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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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US Supreme Court will not review IRS case involving Coinbase user data

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US Supreme Court will not review IRS case involving Coinbase user data

US Supreme Court will not review IRS case involving Coinbase user data

A lower court ruling will stand in a case involving a Coinbase user who filed a lawsuit against the IRS after the crypto exchange turned over transaction data.

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First US staking ETF to launch Wednesday, giving investors exposure to Solana

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Government accused of ‘stark’ contradiction over position on Gaza genocide allegations

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Government accused of 'stark' contradiction over position on Gaza genocide allegations

The government has won a long-running legal challenge about its decision to continue allowing the sale of spare parts for F-35 fighter jets to Israel, while suspending other arms licences over concerns about international humanitarian law in Gaza.

But a key part of its case has highlighted mixed messaging about its position on the risk of genocide in Gaza – and intensified calls for ministers to publish their own assessment on the issue.

PM braced for pivotal vote – politics latest

Lawyers acting for the government told judges “the evidence available does not support a finding of genocide” and “the government assessment was that…there was no serious risk of genocide occurring”.

Therefore, they argued, continuing to supply the F-35 components did not put the UK at risk of breaching the Genocide Convention.

This assessment has never been published or justified by ministers in parliament, despite numerous questions on the issue.

Some MPs argue its very existence contrasts with the position repeatedly expressed by ministers in parliament – that the UK is unable to give a view on allegations of genocide in Gaza, because the question is one for the international courts.

For example, just last week Deputy Prime Minister Angela Rayner told PMQs “it is a long-standing principle that genocide is determined by competent international courts and not by governments”.

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Situation in Gaza ‘utterly intolerable’

‘The UK cannot sit on our hands’

Green MP Ellie Chowns said: “The government insists only an international court can judge whether genocide is occurring in Gaza, yet have somehow also concluded there is ‘no serious risk of genocide’ in Gaza – and despite my urging, refuse to publish the risk assessments which lead to this decision.

“Full transparency on these risk assessments should not be optional; it is essential for holding the government to account and stopping further atrocity.

“While Labour tie themselves in knots contradicting each other, families are starving, hospitals lie in ruins, and children are dying.

“The UK cannot sit on our hands waiting for an international court verdict when our legal duty under the Genocide Convention compels us to prevent genocide from occurring, not merely seek justice after the fact.”

‘Why are these assessments being made?’

“This contradiction at the heart of the government’s position is stark,” said Zarah Sultana MP, an outspoken critic of Labour’s approach to the conflict in Gaza, who now sits as an independent after losing the party whip last summer.

“Ministers say it’s not for them to determine genocide, that only international courts can do so. Yet internal ‘genocide assessments’ have clearly been made and used to justify continuing arms exports to Israel.

“If they have no view, why are these assessments being made? And if they do, why refuse to share them with parliament? This Labour government, in opposition, demanded the Tories publish their assessments. Now in office, they’ve refused to do the same.”

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Routes for Palestinians ‘restricted’

Judges at the High Court ultimately ruled the case was over such a “sensitive and political issue” it should be a matter for the government, “which is democratically accountable to parliament and ultimately to the electorate, not the court”.

Dearbhla Minogue, a senior lawyer at the Global Legal Action Network, and a solicitor for Al-Haq, the Palestinian human rights group which brought the case, said: “This should not be interpreted as an endorsement of the government, but rather a restrained approach to the separation of powers.

“The government’s disgraceful assessment that there is no risk of genocide has therefore evaded scrutiny in the courts, and as far as we know it still stands.”

Palestinians inspect the damage at an UNRWA school sheltering displaced people that was hit in an Israeli air strike, in Gaza.
Pic Reuters
A Palestinian woman sits amid the damage at an UNRWA school sheltering displaced people. Pic: Reuters
Image:
Pics: Reuters

What is the government’s position?

Government lawyers argued the decision not to ban the export of F-35 parts was due to advice from Defence Secretary John Healey, who said a suspension would impact the whole F-35 programme and have a “profound impact on international peace and security”.

The UK supplies F-35 component parts as a member of an international defence programme which produces and maintains the fighter jets. As a customer of that programme, Israel can order from the pool of spare parts.

Labour MP Richard Burgon said the ruling puts the government under pressure to clarify its position.

“This court ruling is very clear: only the government and parliament can decide if F-35 fighter jet parts – that can end up in Israel – should be sold,” he said.

“So the government can no longer pass the buck: it can stop these exports, or it can be complicit in Israel’s genocide in Gaza.

“On many issues they say it’s not for the government to decide, but it’s one for the international courts. This washing of hands will no longer work.”

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Dozens dead in Gaza after Israeli strikes

Israel has consistently rejected any allegations of genocide.

Prime Minister Benjamin Netanyahu branded a recent UN report on the issue biased and antisemitic.

“Instead of focusing on the crimes against humanity and war crimes committed by the Hamas terrorist organisation… the United Nations once again chooses to attack the state of Israel with false accusations,” he said in a statement.

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‘Gaza disinformation campaign is deliberate’

The UK government has not responded to requests for comment over its contrasting messaging to parliament and the courts over allegations of genocide.

But in response to the judgement, a spokesperson said: “The court has upheld this government’s thorough and lawful decision-making on this matter.

“This shows that the UK operates one of the most robust export control regimes in the world. We will continue to keep our defence export licensing under careful and continual review.

“On day one of this Government, the foreign secretary ordered a review into Israel’s compliance with international humanitarian law (IHL).

“The review concluded that there was a clear risk that UK exports for the IDF (Israel Defence Forces) in the Gaza conflict might be used to commit or facilitate serious violations of IHL.

“In contrast to the last government, we took decisive action, stopping exports to the Israeli Defence Forces that might be used to commit or facilitate serious violations of international humanitarian law in Gaza.”

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