Zcash is a blockchain project that pioneered the use of zero-knowledge technology to enable private transactions. This approach allows users to validate transactions without exposing sensitive information such as sender and receiver addresses or the specific amounts transferred.
The network utilizes zk-SNARKs, which stands for Zero Knowledge Succinct Non-Interactive Argument of Knowledge. Instead of storing raw transaction data, the blockchain records commitments, which are hashes derived from the transaction details. Validators verify these commitments using zero-knowledge proofs without accessing the underlying data.
Early versions of Zcash implemented the Groth16 proof system. This process involves converting transaction logic into a system of elementary operations known as Rank-1 Constraint Systems (R1CS), which are then transformed into polynomials. The system uses the BLS12-381 elliptic curve to perform homomorphic hiding.
During the setup phase, a random argument is generated to create constant values on the elliptic curve. These values allow the system to verify that the polynomial constraints are satisfied without revealing the secret coefficients. Once the setup is complete, the initial random argument must be destroyed to prevent the generation of fraudulent proofs.
