Multinational auditing and consulting firm, Ernst & Young (EY), announced on October 30 the launch of their EY Ops Chain Public Edition (PE) prototype, the world’s first implementation of zero-knowledge proof (ZKP) technology on the public Ethereum blockchain.
This system aims to overcome three main barriers of current transactions and asset transfers on a public blockchain:
- The ability for companies to conduct secure transactions on a public network;
- Lower some of the barriers to more widespread blockchain adoption; and
- Enable a full traceability trail of private transactions.
Although still only a prototype version, and set for live production offering in 2019, this technology could prove hugely significant.
To consider this in greater detail it’s useful to first look at the difference between public and private blockchains and what zero-knowledge proofs are exactly.
Public blockchains versus private blockchains
The biggest difference between public and private blockchains lies in who is allowed to join and participate in the network.
Public blockchains are open to everyone and anyone can, theoretically, join the network, download the protocol, and read and write transactions on its decentralized network. The most well-known public blockchains are Bitcoin and Ethereum. Transactions are verified by thousands upon thousands of independent computers around the world, or nodes, to maintain an ecosystem of trustless consensus. The more decentralized the network is, the more secure and resilient it becomes.
However, this security comes at a cost. Each transaction has to be confirmed by every node and to reach consensus, nodes have to perform resource-intensive calculations to solve complicated cryptographic equations, also known as proof-of-work. This decreases transaction times and increases transaction costs,