Yesterday Spanish bank BBVA announced it was partnering with the Madrid based IMDEA Software Institute for research into Zero Knowledge Proofs (ZKP). This cryptographic solution is commonly used in blockchain solutions and enables data to be shared while maintaining privacy. Both organizations have expertise in privacy enhancing technologies (PETs).
Examples of the sorts of use cases might include confirming someone is over the age of 18 but not disclosing their age. A more financial example would be verifying that a company owns the asset it wants to sell without revealing the seller’s name.
IMDEA and BBVA plan to focus on financial use cases that “make it easier for financial institutions to verify the accuracy of information necessary for the sale of a product or service.” They also mentioned using digital evidence for certification without sharing the underlying data. And finally, they outlined the potential in the identity field.
“There is a growing need to develop technological solutions that allow us to protect the information we share when consuming digital services in our everyday lives. And at BBVA, we see great potential in theses technologies to makes this possible,” said Carlos Kuchkovsky, the Head of Research and Patents at BBVA and Hyperledger board member.
He continued: “Now, thanks to this collaboration, we will be able to expand our capacity to research in this area of knowledge and apply it to the bank, so that its benefits reach our customers,” he added.”
But the technology is not without its challenges. For example, one version, ZK Snarks, has a risk that those that set up the solution could be able to snoop, so it has an elaborate trusted setup methodology. Another issue is that it requires quite a bit of processor power.
One of the aims of the collaboration is to address adoption challenges, and the pair intend to help with integration into current communication systems that companies are using, as well as standards.
“This collaboration could help us and the scientific community to transfer this technology to relevant industrial actors and to identify the problems that must be addressed to reach this goal,” said postdoctoral researcher Antonio Faonio, IMDEA Software Institute.
Two other significant organizations that have committed resources to ZKP research include ING Bank and consultants EY. But there are plenty of startups, including Starkware, whose founders developed ZK Snarks and its follow up.
BBVA also has extensive distributed ledger technology (DLT) experience and has conducted numerous pilots for its award-winning solution for issuing different kinds of blockchain loans and bonds.
