Kaleido’s co-founders, CEO Steve Cervency and COO Sophia Lopez, at the Ethereal Summit in Tel Aviv, September 15, 2019 (photo by Molly Jane Zuckerman for Modern Consensus).
Technology

Zk-SNARKs: What are they and how can they protect your privacy?: A talk with Kaleido

During this weekend’s Ethereal Summit in Tel Aviv, Modern Consensus grabbed some time with enterprise blockchain solution startup Kaleido’s founders to talk about this awkwardly named technology

Blockchain solution Kaleido, which is backed by ConsenSys, is working on a way to make privacy more of a reality in the enterprise blockchain sphere. While Kaleido made even the traditional financial news headlines last May for its collaboration with Amazon Web Services, the startup’s recent partnership with privacy tech firm QEDIT for zero-knowledge proofs implementation is a decidedly less-recognized name. Modern Consensus spoke with Kaleido’s co-founders, CEO Steve Cervency and COO Sophia Lopez, on this deep tech topic.

MODERN CONSENSUS: Could you explain to me what exactly zk-SNARKs are in a way that I can actually understand it?

STEVE CERVENCY: It comes down to how can you collaborate in a shared network in a shared context, and yet still have the right amount of privacy when you need it—a kind of programmable privacy. 

It’s about hiding exactly what you want to hide. If you want to prove that you have a certain balance, but not tell people what the whole balance is. If you want to prove that a transaction happened but not disclose who the other parties were. You have really granular control over what you actually disclose about a transaction. 

It’s a really fundamental thing, but if you think about the sort of networks that we see across healthcare, across government, across banking and financial sectors—these sorts of privacies really are required; they really are necessary to get companies to buy into DLT, this shared ledger.

Kaleido is partnering with one of the leaders, QEDIT. It’s a local company here in Tel Aviv. They’re leading one of the most promising areas around here—zero-knowledge proofs [zk-SNARKS]. They’re going to be available through the Kaleido marketplace. We see it as a really positive intersection, bringing this deep tech and putting it on Kaleido’s platform where it’s very enterprise friendly and the “easy button” is there [Note: This is both a literal and a figurative way to describe the relative ease of clicking through the basic user setup process]. It’s their plug and play.

What actual use cases exist right now for zk-SNARKs technology?

SOPHIA LOPEZ: We’re a general purpose technology platform, and we really want to give people the “easy button” as well as advanced options.

The “easy button” allows people to actually try it and do something meaningful today on the platform. That is based on a different technology, the Zether protocol underpinned by Sigma-Bullets.JPMorgan did private extensions for open source. 

All of these zero-knowledge proof technologies are more on the nascent side of the spectrum with blockchain. But Kaleido has token capabilities. We announced in May that you can create fungible [and] non-fungible tokens [and] you could trade them to atomic swaps. Clients say, “Well, we want privacy with those.” You can do that whole flow in Kaleido just with the “easy button.” You can shield the tokens and adjust what you want to keep private around the balance, what you’re trading, [and] who you’re doing that with. 

To your point earlier about how this technology really works: What it is really about is just helping people be educated and learn how to use these technologies and put it in their hands, taking it out of the conceptual white paper phase and just making it real for people.

How is the use of zk-SNARKS connected to your previous partnerships with Amazon Web Services and Microsoft’s Azure?

CERVENCY: Everything that we do runs natively cross-cloud and is available in Azure and AWS. Every single new technology, new partnerships that we bring in is underpinned by AWS and Azure. We’re really about building all these new interesting layers that we talk about in a whole B2B tech stack that’s really emerging around blockchain. Zero-knowledge proofs is a really great example of that, all the way up in the app layer. There are there are many other technologies around storage, around oracles, data feeds, and so on that we also have available; all of that stuff builds on our AWS and Azure partnerships.

What other awkwardly named similar technologies are out there that the common man hasn’t heard of yet?

CERVENCY: zk-SNARKS is definitely a pretty emerging space. I’m probably not expert enough to tell you where that field is going. What I will tell you is that tokenization is really going mainstream, dropping the crypto stigma that has existed in the enterprise space. We’re now seeing enterprises wrapping their heads around the fact that tokenization is really just about digital assets—it’s about collaborating with other businesses on the things that they own and the things that they’re trading.

We see those fungible [and] non-fungible tokens being built into everything that companies are doing now. That’s a huge shift, that’s a major trend. We see companies really starting to open up to these sorts of deep technologies like zero-knowledge proofs, and we see that as the fuel to really push blockchain through to the next horizon.

This interview has been edited and condensed for clarity.

Molly Jane Zuckerman is a freelance journalist covering crypto and blockchain news. Disclosures: Zuckerman does not own enough enough bitcoin (BTC) to buy a Birkin bag (<$5,000) and not enough ether (ETH) to buy a quarter of a Birkin bag (<$1,000).

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