The convergence of ZK-proofs and decentralized identity systems could create more compliant privacy-preserving protocols, without sacrificing user privacy.
Regulators are cracking down on privacy-preserving protocols like cryptocurrency mixers, but zero-knowledge proofs (ZK-proofs) could offer a solution for both developers and regulators.
Offering privacy-preserving features in a legally compliant manner is among the biggest concerns of today’s privacy-focused blockchain protocols, which can be used by virtually anyone with internet access.
However, the evolution of ZK-proofs, along with other privacy-preserving paradigms, like decentralized identity verification systems, could help protocols maintain privacy and ensure they aren’t servicing any terrorist organizations or money launderers, according to Matthew Niemerg, the co-founder and president of AlephZero.
