Unlocking Privacy: Zero Knowledge Proofs and On-Chain Privacy Technologies in Financial Services and Healthcare

In a recent speech at CCDAS 2023, Google Cloud's Head of Web3 Engineering, James Tromans, highlighted the potential of on-chain privacy preserving technologies such as zero knowledge proofs in industries like financial services and healthcare. Tromans emphasized the relevance of zero knowledge proofs in financial services and the broader Web3 ecosystem, stating that the idea of making option contracts and sensitive financial information visible to everyone on the blockchain makes no sense.

Zero knowledge proofs are cryptographic techniques that allow the proof of knowledge of something without revealing the underlying information. These proofs have become a focal point in efforts to enhance on-chain privacy. Ethereum co-founder Vitalik Buterin has also explored the application of zero knowledge proofs in a privacy-preserving blockchain protocol that balances user anonymity with regulatory compliance.

Tromans argued that if we are to embrace a world where such deals are put on the blockchain instead of centralized exchanges, additional privacy-preserving technologies are needed. He suggested that zero knowledge proofs could be one way to achieve this.

Beyond financial services, Tromans sees potential applications for zero knowledge proofs and other on-chain privacy technologies in industries such as healthcare. He believes that the investments made in Web3, which have recently shifted towards AI, will yield tangible results beyond token speculation. Technologies like zero knowledge proofs and multi-party computation, according to Tromans, have wider applicability beyond the blockchain and will likely be adopted in various other domains.

However, Tromans expressed skepticism regarding the Web3 concept of users owning their own data. He believes that businesses will still need access to user data and that users will willingly share their data with businesses that provide value and exceptional services. While Web3 adoption still has a long way to go, Tromans drew a parallel to the ongoing transition of large organizations to the public cloud, stating that organizations will only make the switch to Web3 if they can realize new revenue streams and gain access to previously unexplored opportunities.

Overall, Tromans' remarks highlight the potential of zero knowledge proofs and other on-chain privacy technologies in financial services, healthcare, and beyond. While the vision of total user data ownership may be overstated, the adoption of Web3 is poised to bring about significant changes in various industries, provided that businesses can demonstrate value and new revenue streams.