Blockchain Proof of Key Record System Study Guide

Blockchain Proof of Key Record System Study Guide

Short Answer Questions

How do nodes in a blockchain network validate transactions?

What are smart contracts and how are they different from traditional contracts?

What are the advantages of verifiable computation in a blockchain context?

How do zero-knowledge proofs enhance the privacy of blockchain transactions?

What steps are involved in the setup phase in zk-SNARKs?

In a Bitcoin-based blockchain, how does the size of the verification key affect the structure of the transaction script?

What role does the redeem script play in a P2SH transaction?

How does a worker prove that it has the correct verification key?

Besides storing the verification key, what other methods can be used to enhance the security of such transactions?

Describe a method for incorporating proofs of computation into blockchain transactions.

Short Answer Questions

Network nodes validate transactions by executing locking and unlocking scripts and verifying other conditions (e.g., transaction amount, UTXO existence). A transaction is considered valid if a majority of nodes deem it valid.

Smart contracts are computer programs designed to automatically execute the terms of a contract, whereas traditional contracts are written in natural language. Smart contracts are machine-readable and executable, allowing for automatic execution when certain conditions are met.

Verifiable computation allows for the generation of proofs of computation that can be verified by any node in the blockchain network without having to re-execute the computation. This reduces computational overhead and allows for more complex, computationally intensive smart contracts.

Zero-knowledge proofs allow a party to prove that it knows the truth of a piece of information without revealing the underlying information. In blockchain transactions, this can enhance privacy by hiding the identity of the recipient and other transaction details.

In the setup phase of zk-SNARK, the client defines the function to be executed, compiles it into an arithmetic circuit and a quadratic arithmetic program (QAP), and uses the QAP to generate an evaluation key (EK) and a verification key (VK).

In Bitcoin-based blockchains, transaction scripts are limited in size. If the verification key is too large to fit in a single script, it needs to be split and processed in multiple transactions, which increases complexity and cost.

The redeem script contains the set of conditions required to unlock the funds locked in a P2SH transaction. It is stored as a hash in the locking script and must be provided in its full form in the unlocking script.

The worker proves that it possesses the correct key by providing a verification key that matches the hash encoded in the redeem script. They also provide a digital signature generated using their private key to prove ownership of the key.

Security can be enhanced by storing a hash of the verification key along with the full key, allowing anyone to verify the authenticity of the key afterwards. Another approach is to implement a new opcode for verifying the correctness of the computational proof.

The computational proof can be included in the unlocking script or, if the proof is too large, it can be split and stored in multiple transactions. Specialized opcodes can be used to verify the proof on the blockchain.

Essay Questions

Based on the provided materials, write an essay on the following topics:

Discuss the advantages and challenges of recording verification keys on the blockchain.

Compare and contrast the use of standard and nonstandard transactions to execute smart contracts on the blockchain.

Analyze the applicability of different zero-knowledge proof schemes (e.g., zk-SNARK, zk-STARK) in blockchain applications.

Design a blockchain system that uses verifiable computation to implement a privacy-preserving auction or voting mechanism.

Discuss the potential challenges and benefits of integrating verifiable computation into existing blockchain platforms (e.g., Bitcoin, Ethereum).

Glossary of Key Terms

Definitions of Terms Blockchain A decentralized, distributed ledger for recording transactions and other data. Node A participant in a blockchain network that maintains a copy of the blockchain and verifies transactions. Smart Contract A computer program designed to automatically execute the terms of a contract, stored on the blockchain and automatically executed when certain conditions are met. Token A digital asset that represents a tradable asset on the blockchain and can be used for a variety of purposes, such as representing a physical asset or accessing a service. Verifiable Computation A cryptographic technique that allows the generation of proofs of computation, allowing anyone to verify the correctness of the result of the computation after the fact, without having to re-perform the computation. Zero-Knowledge Proof A cryptographic protocol that allows a party to prove that it knows the truth of a statement without revealing any other information. zk-SNARK A concise non-interactive argument of knowledge that allows the generation of short and easily verifiable proofs of computation. Evaluation Key (EK) A key generated during the setup phase of zk-SNARK that is used to generate proofs of computation. Verification Key (VK) Another key generated during the setup phase of zk-SNARK that is used to verify proofs of computation. Redemption Script A special script that specifies the conditions for unlocking funds locked in a P2SH transaction. P2SH (Pay to Script Hash) A type of Bitcoin transaction that allows funds to be sent to a hash representing a redemption script, allowing for more complex and flexible smart contracts.