Tezos will implement zk-SNARKS – Bank of France is interested

  • Tezos will introduce the Zero Knowledge Proofs cryptographic method in the form of zk-SNARKS with its next network upgrade to enable large enterprises and banks to use it on a commercial level. 
  • The Bank of France, the central bank of France, has already shown interest. 

After the recent protocol upgrade “Babylon” by Tezos, the development team is already planning a new major upgrade. As William McKenzie announced in a blog post, Tezos (XTZ) will activate zk-SNARKs as part of the next protocol change on the network. The ” fine-tuned privacy ” will allow central and commercial banks, such as the Central Bank of France, to use the Tezos protocol. For this purpose, zk-SNARKS is necessary to ensure adequate data protection.

Will Tezos become a Privacy Coin?

The cryptographic procedure of the Zero Knowledge Proofs was implemented with zk-SNARKs for the first time by Zooko Wilcox in Zcash. zk-SNARKs enables the construction of a mathematical proof by which the sender can prove the possession of certain information (e.g. a private key) without having to communicate this information to the recipient. This allows two parties to prove that a statement is true without disclosing the information itself.

By using Zcash, absolutely anonymous transactions are possible which cannot be traced in terms of sender, recipient and transaction amount. However, as McKenzie stated in the blog post, Tezos does not aim to become a “privacy coin”. Instead, Tezos wants users to be able to make privately conducted transactions:

The update with zk-SNARKs and the use of data protection functions do not serve to make Tezos (XTZ) a privacy coin, but to give the user the freedom and possibility to use the data protection function as an option.

Tezos, like ZCash, will implement zk-SNARKS as an optional feature. Users will not be forced to send the anonymous transactions. As McKenzie writes in the article, Tezos is well aware that regulatory concerns in the past have led to the removal of privacy coins from cryptocurrency exchanges. As a result, the function will be optional.

In addition, the upgrade will provide a new “Michelson instruction”. This will allow a smart contract to store and execute a transaction on a shielded blockchain that behaves like sapling (last Zash update). This feature is intended to provide “fine-tuned privacy” and enable large companies, such as the Central Bank of France, to use and deploy the Tezos protocol on a commercial level.

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According to McKenzie, the French central bank, the Bank of France, has expressed an interest in using the Tezos protocol at its commercial and central offices due to the zk-SNARKS functionalities. Thierry Bedoin, the CDO of the Bank of France, shared a tweet in which he mentioned that they had set up a complete private node of Tezos. Although this was a test, it shows that the Bank of France is interested in at least testing the technology.

The current Tezos price

The cryptocurrency Tezos appears unimpressed by the positive news. Within the current market sentiment, the Tezos (XTZ) price has recorded a slight decline.

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About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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