How Zero-Knowledge is Rebalancing the Scales of the Internet
December 18, 2020

How Zero-Knowledge is Rebalancing the Scales of the Internet

The Breakdown of Data Ownership

A decade ago, the extent to which we rely on the internet now would have been hard to imagine. Today, however, the majority of our economic and social activity occurs online. The benefits of this change are especially clear amid the COVID-19 pandemic. Businesses that never relied on the internet before are using it to reach new clients and customers in order to remain afloat. Families are using it to stay connected while physically-distanced over the holiday season.

A consequence of living our lives online is the exponentially-growing amount of data we produce.

This has been a major driver for better products and better services. But the power that these algorithms (and their owners) wield through feeding us the news we read, the shows we watch, and the social connections we make cannot be overstated. This trove of data produced by our online interactions has led to the creation of a new economy defined by who owns access to this data, and who does not.

This intangible data economy is massive - larger than any commodity, including oil. And just like oil in the early 20th century, data has grown increasingly centralized in the hands of a few companies. These data monopolies not only pose threats to data privacy and censorship. Monopolies are bad for economies. They encourage rent seeking, stifle growth, depress innovation, and harm consumer welfare.

And yet, Web 2.0 companies that could be considered data monopolies can't deliver a personalized web experience.

For all the capability of the algorithms that power them, today’s web applications are personalized for shadows of ourselves, not for us as unique individuals. YouTube doesn’t actually know what you like, only what you click on. The results can be frustrating, even comical.

Accidentally click on an Instagram ad for a mattress once, and Facebook will assume you need a new mattress for months.

And to make matters worse, this is happening without our permission and beyond our control. So the potential of the internet to provide consumers with a hyper-personalized and deeply fulfilling digital experience is far from realized. 

The state of the internet of today is a few monopolies that collect vast amounts of data yet fail to deliver a personalized user experience. But how can we expect to fix this without being even more liberal with the data we share? The good news is that there is a solution that does allow us to achieve both a more private and more personalized web experience: zero-knowledge proofs.

An Evolution in Privacy - Zero-Knowledge

A zero-knowledge proof is a cryptographic protocol where one party (the prover) proves to another party (the verifier) that something is true without revealing how it is true.

For example, you could prove to someone that you are immune to COVID without revealing how you are immune (antibodies through illness or vaccine) or when you became immune. The underlying cryptography ensures that neither the verifier nor any party observing the transaction learns any information at all about why the statement is true. Yet those same parties can be convinced even if they don’t trust the prover making the claim.

This sounds like magic, yet it’s all just math.

In fact, it’s the same math that underlies the encryption algorithms that we rely on every day for e-commerce. But how does zero-knowledge solve our original, society-wide problem?

It turns out that proving the truth of something without revealing the information itself can be a powerful primitive. Zero-knowledge allows us to use the internet more powerfully than we do today without leaving extractable traces of our data everywhere. Think of each of us as a “prover” and any service on the internet as a verifier: 

We could log in to Facebook by proving who we are without having to reveal our email, password, location, birthday, mother’s maiden name, or favorite pizza topping. 

We could prove our credit score qualifies us for a loan without needing to initiate a hard inquiry that would hurt our credit score.

We could file insurance claims that can be reviewed, verified, and approved without needing to expose the rest of our insurance identity, which creates unethical reasons for claims to be denied.

We could prove relevant facts about ourselves and our identity to any application without fear that the information could be lost, stolen, or abused. This use case in particular is increasingly relevant as we anticipate a future where much of our biological data/genetic information is used to provide personalized medical care and services.

So if zero-knowledge proofs are so powerful, why aren’t they used for these applications already?

It took decades from the invention of the computer for it to be miniaturized into a PC. Similarly, zero-knowledge proofs have only recently become practical. The cost of generating them is still expensive compared to the traditional way of doing things. And the reality is that very few people would accept a slower, less efficient system; even one that preserves their privacy and gives them more control over how their data is shared. 

However, this field has witnessed substantial advances over the past decade. In 2019, we founded Aleo to accelerate the integration of zero-knowledge into the internet of the future. Aleo’s specific zero-knowledge solution - known as Zexe - ensures we don’t need to accept the performance tradeoff.

Looking Ahead at Zero-Knowledge

Using zero-knowledge cryptography, we can enjoy the internet’s benefits of global connection without paying the invisible cost of our privacy. We don’t need to scrap everything and rebuild from the ground up. Rather, we can design new applications and new ways of interacting with those applications.

Using zero-knowledge cryptography, companies like Aleo can help put power back into the hands of users instead of the corporate interests that govern it. It’s more than “owning your data”: it’s reclaiming and redefining your digital identity so that you, and only you, choose what you want to share and with whom for a more private, personalized, and rewarding online experience.