Financial privacy and regulation can co-exist with ZK-proofs — Vitalik Buterin

Ethereum co-founder Vitalik Buterin has actually published a research paper diving into privacy swimming pool systems as a tool to achieve more personal privacy in financial transactions, allowing users to prove dissociation from illegal funds through zero-knowledge-proof technology.The document initially discusses one of the most popular privacy-enhancing procedures, Tornado Cash, which enables users to deposit and withdraw cryptocurrencies without creating an identifiable link between the 2 addresses. According to the authors, the idea could offer a balance in between truthful and dishonest procedure users, possibly enabling financial compliance on-chain in the future:” The core concept of the proposition is to allow users to publish a zero-knowledge proof, demonstrating that their funds (do not) originate from known (un-) legal sources, without openly exposing their entire transaction graph. The association set can consist of all formerly made deposits, only the users own deposits, or anything in between.” In the example, when one of the users wants to withdraw funds, the person can define which association set to be a part of, suggesting users are incentivized to make their association sets bigger to secure personal privacy. The paper further offers a number of other use cases of zero-knowledge evidence for users to demonstrate that funds are not connected to illicit sources or to show that funds stem from a particular set of deposits without exposing any further information.

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Ethereum co-founder Vitalik Buterin has published a research study paper diving into privacy swimming pool systems as a tool to accomplish more privacy in financial transactions, permitting users to prove dissociation from illicit funds through zero-knowledge-proof technology.The file at first talks about one of the most popular privacy-enhancing procedures, Tornado Cash, which enables users to deposit and withdraw cryptocurrencies without creating an identifiable link between the 2 addresses. According to the authors, the idea could supply a balance in between honest and deceitful protocol users, potentially making it possible for monetary compliance on-chain in the future:” The core concept of the proposition is to enable users to publish a zero-knowledge proof, showing that their funds (do not) originate from known (un-) legal sources, without publicly revealing their entire deal chart.” In the example, when one of the users desires to withdraw funds, the individual can define which association set to be a part of, meaning users are incentivized to make their association sets larger to protect privacy.