Various initiatives — particularly in Bitcoin — have sought to improve the efficiency of the blockchain by methods such as pruning (decreases the size of the blockchain) or using more efficient transaction structures (i.e., Sapling in ZCash).
Zero-knowledge proofs (ZKPs) were initially conceived with a privacy focus. However, that narrative is beginning to shift as the abundant practical applications of its efficiency properties are continually uncovered.
In particular, it is especially worth noting the Coda cryptocurrency, which employs zk-SNARKs to compress the size of the blockchain to a minuscule size of their former cumbersome scale.
We see the Coda protocol as offering an intriguing development in the space of blockchain efficiency, and how it can provide vast performance and overhead cost improvements for enterprises looking to leverage cryptocurrencies and blockchains.
Coda and Instant Sync
ZKPs are still in their very early stages. As such, many of the practical applications of the innovative technology are yet to be uncovered and have a long way to go in discovering their full potential.
Coda’s use of ZKPs is to compress the size of the blockchain to a trivially verifiable size. The primary draw of doing so is the vastly increased accessibility to validating nodes and mobile nodes. Typically, to maintain a full copy of the blockchain, you need to run a full node, which is not really practical on consumer laptops and some older desktops.
zk-SNARKs can be used to create proofs that the transactions within a specific block are valid without needing to propagate the block itself, only the proof. Nodes can subsequently sync to the network as validating nodes almost instantly, removing the cumbersome time delays with syncing with a full blockchain like Bitcoin and the computational and bandwidth resources required to do so.
In Bitcoin, mobile nodes are known as SPV nodes, which don’t actually download the entire blockchain but rely on trusted full nodes to send them the correct block order. This introduces trust into a system designed to remove the need for trust between participants, which obviously runs contrary to the whole notion of the legacy cryptocurrency.
Bitcoin has sought several methods — such as the Neutrino Protocol — for reducing the necessary requirements for SPV nodes and intermediating trust. However, they do not really compare in the scope of magnitude to what Coda is implementing with zk-SNARKs.
It remains unlikely that any cryptocurrency can surpass Bitcoin’s sound money and network effects properties, so what Coda is implementing is likely to become a concept implemented by permissioned blockchain networks for enterprises, which is where we come in.
Enterprises always look for cost efficiency improvements, and instant sync validating nodes can enable organizations to build applications that interact with public blockchains in a trust-minimized manner. Further, the potential design space of building on top of instant sync ZKP nodes is enormous and may provide the entry incentive point for many businesses hesitant to work with blockchains for their applications because of scaling issues.
Properly facilitating the transition from legacy business models to next-generation technologies is our point of emphasis at Sara Technologies. Our services are simply unmatched in this field, and we consistently stay on top of the bleeding-edge technologies that can assist you in your journey into becoming a successful digital enterprise.
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What is Coda and A Compacted Blockchain? was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.