A zero-knowledge proof is a way of proving to someone that you have certain data without revealing the data itself. When I unlock my phone, you can safely conclude I know the password, without me having to show you the actual password. Zero-knowledge proofs in crypto are important for two reasons: privacy and data compression.
It’s a remarkable and relatively novel type of tool in the cryptography toolbox, these zero-knowledge proofs (ZKP’s). Imagine that I can prove that I am the legitimate owner of a valid passport, without actually showing my passport to the clerk at customs, or to the car rental agency. Similarly, zero-knowledge proof technology enables cryptographic algorithms for verifying claims regarding the possession of data without having to reveal the data.
Zero-knowledge proofs are not only used in blockchain technology but in a wide array of digital domains. Although in the works since the 80s, ZKP use cases are only now slowly being rolled out in finance and government services.