Zero-knowledge proof (ZKP) was first introduced in the 1980s by a group of researchers at MIT in their paper, “The Knowledge Complexity of Interactive Proof Systems.” These researchers defined ZKP as a method by which one party can interact with another party and provide proof of the knowledge without revealing their confidential information.
What is a Zero-Knowledge Proof?
A Zero-Knowledge Proof is a cryptographic technique that allows two parties to prove that a proposition is true without revealing any info about the thing apart from it being true. In layman’s terms, you are basically stating whether or not something is true without giving any extra details. A ZKP has to satisfy these three properties:
· Completeness – If the statement is true, the honest verifier will be convinced of this by an honest prover.
· Soundness – If the statement is not true, no cheating prover can convince the honest verifier that it is true, except with some small probability.
· Zero-knowledge – If the statement is true, no cheating verifier learns anything other than this fact. This is formalized by showing that every cheating verifier has some stimulator that, given only the statement to be proved can produce a transcript that looks like an interaction between the honest power and the cheating verifier.
Why is ZKP Important?
Businesses do not want to share proprietary info that can land in the hands of hackers or their competitors. Companies also want to make sure their data is securely delivered to the party it is intended for. Ordinary blockchains can do this, but with ZKP, businesses can share proofs about the data without sharing the data itself.
What Industries Will ZKP Impact?
Commercial real estate is certainly within the information business, meaning ZKP will directly impact it due to the fact that ZKP typically impacts any industry that involves transactions, identity systems, and other proprietary info. ZKP is used as a diligence, security, and verification tool within commercial real estate companies, financial services, insurance firms, and retail businesses.
How Will ZKP Directly Impact CRE?
With the amount of technology being used all over the globe, it is essentially impossible to be completely private. The number of cyber-attacks that have happened in the last decade proves that personal data theft is a real concern. Zero-knowledge proof could be the answer to this theft epidemic. While the concept is not new, there is an increased interest in the protocol due to Blockchain and cryptocurrency networks.
In CRE, where cryptocurrency and Blockchain are projected to make significant changes, ZKP protocols could help establish client confidence and trust in these new systems. Consumers can conduct real estate transactions through banks or cryptocurrency networks without having to compromise their privacy. With a financial and information-driven industry like commercial real estate, data privacy is crucial to keeping the trust of clients and continuing to keep the company’s sensitive data secure from both hackers and competitors. Zero-Knowledge Proof is a way to keep data transparent, but not insecure.