Zero-knowledge proofs (ZKPs) are currently having a breakthrough moment in the blockchain sphere. This doesn’t come as a surprise, considering ZKPs offer a viable solution to the scalability problem without sacrificing verifiability. However, of the various use cases and benefits of ZK technology, privacy is currently the most underutilized in the realm of blockchains. Much of ZK is used to verify honest computation, and reduce compute demands. Nevertheless, with the rapid increase in networked IoT devices, ZK could soon be leveraged to ensure user safety and privacy.
A key challenge with positioning ZK tech as a “solution” for protecting personal data and human identity is that most people don’t perceive the status quo as a problem. Sure, Web2 infrastructure may be full of flaws, but it’s what people are used to using and convincing them to upgrade to any other solution is an incremental exercise that takes time –– and marketing.
However, not all data is personal data. There is a gaping need to fix security gaps that exist in the growing Internet of Things market, which will also unlock a huge data opportunity. By the end of next year, there will be over 30 billion IoT devices online, an increase of nearly 125% in four years. McKinsey estimates there is up to $12 trillion in economic value locked in IoT, yet it states that businesses are struggling to capture this value.
A significant reason for this is that there is no way to reliably identify any given device in a trustless way. The lack of an identity solution means that data gathered, computed, or transmitted by IoT devices is, at best, dubious or, at worst, entirely useless since it’s impossible to verify.
This may not seem like a big deal for many types of connected devices –– indeed, some people actively resent the idea of household devices like toothbrushes or refrigerators collecting and transmitting data about their personal habits. However, IoT devices are handling vast amounts of highly consequential data. Data collected by devices such as surveillance cameras or military drones or by wearable medical tech like pacemakers affects human lives and so must be provably secure and reliable.
This is where ZK technologies can play a part, as they already do in the blockchain sphere, where ZKPs are deployed in data validation. For example, in Filecoin, users who store files must prove that they are secure and corruption-free by sending ZKPs to the full nodes, while Subsquid also uses ZKPs to ensure that all on-chain data is stored by nodes in its data lake for efficient querying and indexing.
This is an extremely nascent segment, but it represents a huge opportunity for innovators at the edge of blockchain, data, and IoT, and development is beginning to emerge. For example, the Integrated Trust Network (ITN) is a Web3 infrastructure providing trusted identities for IoT commerce based on W3C standards for decentralized identifiers and verifiable credentials. ITN is a product of the MOBI Web3 consortium of transport and mobility companies, which has also developed Citopia. Citopia is a decentralized business network for zero-trust IoT transactions that leverages the ITN identity protocol. ZKPs are used in the trustless identification of devices, enabling secure communications and transactions between networks of connected appliances and businesses.
It’s hardly surprising that this segment has been among the first to zone in on the IoT, data, and identity segment when we consider the value and sensitivity of location-based data. Location is categorized as personally identifiable information and thus protected by law in many jurisdictions. The ability to verify the location of a device or entity without revealing it is critical to the security of the device and people who may be using it and the integrity of the data it gathers and transmits.
There are other benefits to establishing IoT devices as a secure and reliable source of data. Data can be integrated into querying and indexing services to make it more accessible and available for use in other applications. Data could also represent a monetization opportunity for individuals and/or companies.
Furthermore, the increased adoption and development of ZK technology in connected devices could help foster and promote the adoption of ZKP-based identity solutions for humans at a faster rate.
ZK technology is undoubtedly proving to be transformative to Web3 infrastructure, but we need to move away from the kind of thinking that limits adoption success to human users. This is particularly true when nearly 30 billion IoT devices have an urgent problem and are searching for a zero-knowledge solution.