ZCash Halo Breakthrough May Benefit All Cryptocurrencies

October 16, 2019 / by Crypto.IQ

The Electric Coin Company (ECC), the company behind ZCash (ZEC) and its protocol development, revealed that their engineer Sean Bowe uncovered an improved trustless cryptographic proving system.

Halo is a proof that verifies the correctness of another instance of itself in a trustless manner. This allows even large computation efforts and data to be checked quickly with a short proof.

ZCash, whose privacy-focused blockchain relies on zero-knowledge proof technology, still has to prove that at the genesis block there was no secret backdoor incorporated. This necessitated a trusted setup, which ZCash also went through when the initial private keys were generated by the founding members.

Trusted setups present a systemic risk, and must be repeated for each major protocol upgrade. Halo removes this need and would potentially contribute to an improvement in safety for upgradeable protocols.

Halo is a recursive method and can be viewed as an accumulated “proof of proofs,” such that the most recent proof contains within it a proof that all prior claims to the relevant secret knowledge have themselves been sufficiently proven through a similar process.

This type of nested proof composition may turn out to have a significant impact on the scalability of existing consensus mechanisms.

Powered Up-Scaling

In September, the ECC demonstrated the power of the recursive proofing system on the Bitcoin blockchain, generating a proof of the latest block alongside proofs for all preceding blocks up to the genesis block in 2009.

The ECC is planning to integrate Halo into the ZCash blockchain as a Layer 1 scaling solution. If it works, the ZCash network might experience a significant increase in the amount of data it can process, solving the scalability issue. This is in contrast to Bitcoin that is trying to solve scalability by using the off-chain (layer 2) solution in the Lightning Network.

Building Block for the Future

Halo’s recursive proof composition can potentially compress unlimited amounts of computation, creating auditable distributed systems, building highly scalable blockchains and preserving privacy.

Zooko Wilcox, co-founder of ZCash and ECC, even claims Halo “may turn out to be a building block for the next generation of the Internet and other such social infrastructure.”

If the internet is to be reinvented or rebuilt with an underlying decentralized system secured by cryptographic protocols, the new architecture needs to be scalable, interoperable and secure.

While Halo is in its infancy, it could prove to be a vital building block as a solution to support scalable, secure, privacy-protecting blockchains through the use of recursive zero-knowledge proofs. There are important benefits to the widespread use of zero-knowledge proofs, that can be used in and these benefits may prove to be the very foundation of a new, decentralized internet.