Implementing Private Transactions In Ethereum Using Zk-Snarks

Blockchain technology, although renowned for its security and transparency, often raises concerns regarding privacy due to the open and transparent nature of transactions. In Ethereum, for example, transaction details are visible to all network participants. However, there are mechanisms to implement private transactions in Ethereum. One such method is using zk-SNARKs, or 'Zero-Knowledge Succinct Non-Interactive Argument of Knowledge'.

What is zk-SNARKs?

zk-SNARK is a method where one can prove possession of certain information without revealing that information, and without any interaction between the prover and verifier. This concept is very useful for Blockchain where it is often necessary to verify transactions without revealing all the transaction details.

zk-SNARKs to maintain transaction privacy

To understand how zk-SNARKs can be used to maintain privacy in Ethereum transactions, let’s construct an example.

Imagine an Ethereum contract that manages a token. A user wants to send these tokens to someone else in a private manner, without letting anyone else know about the quantity of tokens involved in the transaction.

This is a straightforward application for zk-SNARKs. The user could generate a zk-SNARK that attests to the statement: "I know a secret transaction key such that the list of all token amounts, with one entry decrypted with this transaction key, includes a number in the range 1-10."

const zkSnark = require("snarkjs");
const bigInt = zkSnark.bigInt;

const secretKey = bigInt("7919");
const tokenAmt = bigInt("3");

const witness = zkSnark.calculateWitness(secretKey, tokenAmt);
const proof = zkSnark.prove(witness);

console.log(proof);

In this code snippet, we are generating a witness for a secret transaction key and token amount. Then we prove this witness using zkSnark.prove method. The proof will be used in the smart contract to verify the transaction.

pragma solidity ^0.5.0;

import "github.com/matter-labs/websnark/src/verification_key.json";
import "github.com/matter-labs/websnark/src/prover_verification_key.json";

contract Token {
   function verifyTx(bytes calldata _proof, bytes32[2] calldata _publicSignals) external {
     require(websnarkUtils.verify(_proof, verification_key, _publicSignals));
     // Add further logic for private transaction
   }
}

In the Solidity smart contract, we call websnarkUtils.verify to verify the zero-knowledge proof. If the verification succeeds we can proceed with the private transaction logic.

So, thanks to zk-SNARKs, Ethereum users can enjoy privacy in their transactions while keeping the strength of the blockchain's security and decentralization.