Zero-Knowledge Proof (ZKP)
A cryptographic method that allows one party (the prover) to prove to another party (the verifier) that a statement is true without revealing any information beyond the truth of the statement itself. In blockchain, ZK proofs enable privacy-preserving transactions, scalable computation verification (ZK rollups), and identity verification without data exposure. The two main types used in crypto are ZK-SNARKs (succinct, require trusted setup) and ZK-STARKs (transparent setup, quantum-resistant).
“ZK rollups like zkSync use zero-knowledge proofs to prove that thousands of off-chain transactions were executed correctly, without the Ethereum mainnet having to re-execute them — enabling massive scalability gains.”
Rollup
A Layer 2 scaling solution that executes transactions off-chain, compresses them, and posts transaction data or validity proofs to the main chain for finality. Rollups inherit the security of the underlying blockchain while dramatically increasing throughput and reducing costs. The two main types are Optimistic rollups (assume transactions are valid unless challenged during a dispute window) and ZK rollups (use cryptographic zero-knowledge proofs to verify transaction validity instantly).
Layer 2
A secondary protocol built on top of a Layer 1 blockchain to improve scalability, reduce transaction costs, and increase throughput without sacrificing the security guarantees of the underlying chain. Layer 2 solutions process transactions off the main chain and periodically post compressed proofs or data back to Layer 1 for finality.
Scalability
A blockchain's ability to handle increasing transaction volume without degrading performance, increasing fees, or sacrificing decentralization and security. The 'scalability trilemma' (coined by Vitalik Buterin) posits that blockchains can only optimize two of three properties: decentralization, security, and scalability. Layer 2 solutions, sharding, and alternative consensus mechanisms are approaches to improving scalability.
Decentralized Identity (DID)
A self-sovereign digital identity system built on blockchain technology where individuals own and control their personal data and credentials without relying on centralized authorities like governments or corporations. DIDs use cryptographic proofs to verify claims (age, qualifications, membership) without revealing unnecessary personal information, enhancing both privacy and security.