Bitcoin Q&A: What are Bulletproofs?

Zoltan queries, “What are Bulletproofs? A squad of researchers has published a newspaper titled’ Bulletproofs: Short Proofs for Confidential Business and More .’ “It described Bulletproofs as a new non-interactive zero knowledge proof protocol, with very short proofs and without a relied setup.” “What does it intend? How does it drive? What will be the practical benefits? ” A highly technical question. Thank you for inviting it, Zoltan. Let me try to explain this as best I can. Confidential transactions( CT) is an invention publishedthree years ago[ by Gregory Maxwell] that enables you to … to encrypt the amount in a bitcoin transaction. By encrypting the amounts, you can[ secrete] a very important source of information …[ which] analytics companies can track. In[ answering] a previous question I mentioned CoinJoin, where lots of people participate in a transaction. One of the hindrances of that is, unless youare all trading approximately the same amount, it is very easy to track which input belongs towhich production because of the amounts involved.Confidential events is meant to be used with coin mixing strategies to create … anonymous and private bitcoin events, whereby no one can track who is paying what to whom. Confidential transactions encrypts the price soyou can’t see how much is being transacted. If “youre using” that together with mixing, you can’t reallytell which output corresponds to which inputs. It represents for much more robust privacy. You might be thinking,’ if the amount is encrypted, how do we know they didn’t spend money twice ?” How do we know they didn’t create new moneyfrom nothing,[ i.e.Inflate the quantity ]?’ The procedure that’s used in confidential transactionsis called a zero-knowledge proof, where you prove something is true withoutknowing some underlying information. In situations of confidential transactions, you can usea special type of math in the zero-knowledge proof, to[ is demonstrating that] the amounts in the inputs and outputs are equal and add up to zero, without knowing what these amounts are. This seems inconceivable[ to a layperson ]. The math, whenyou read it, doesn’t make it seem any more possible. It is quite mystifying and very difficult to understand. I don’t really understand it. What I do understand is, if you encrypt values in the inputs and the yields, they are able to apply a proof thatsays they cancel each other out. The part is zero, so you know there is an equal amountof inputs and outputs; no new money was created. The specific zero-knowledge proof used inconfidential business is called a range proof,[ where] you can prove that a number is within acertain range without knowing what the crowd is. Bulletproofs is in development because a problemwith non-interactive zero-knowledge proofs is that…They tend to be very large, use a large amount of data. A confidential transaction containing thesenon-interactive zero knowledge proofs … could be 20 kilobytes, compared to a normal transaction that is about 200 bytes. That is not a very good trade-off. You get a lot of privacy, but in return the capacity ofyour blockchain exactly declined tremendously, because these transactions justbecame a hundred times larger.[ The paper] is a very interesting speak, although you might find it challenging.[ The writers] achieved a much shorter proof,[ where] you can prove the amounts in the inputs and outputs are within a series, without use as much data and realizing very largetransactions, reducing the capacity of your blockchain. It is a awfully incredible development in cryptography. Once again, a demonstration that research in the Bitcoinand the crypto ecosystem is pushing boundaries, producing new cryptographic lore anddiscoveries in[ computer] science every single day.As you asked, the practical benefits are that we can getconfidential deals with much less proofs, allowing us to encrypt the values, and gain greateranonymity without business being enormous in sizing ..

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