 Hi everyone, it's MJ the fellow actuary and in this video, we're going to simply explain zero knowledge proofs and what better way to start than with a definition. So it is when the prover can convince the verifier that something is true without revealing anything that would allow the verifier to learn from it. So in this video, we're going to look at two very simple examples and then discuss some of the use cases. So example number one is where's Wally. So what we want to do is we want to try and show where is Wally without revealing his location. So what I can do is take a really big piece of paper, cover the entire art piece of where Wally is hidden and then cut just a little hole in it. And I can then reveal where Wally is. Now if I was to make this paper transparent so that you can see what I've done, you will see that I've shifted the piece of art where Wally is contained somewhere behind the white piece of paper and then cut off a little hole. Of course, I could have shifted the paper somewhere else and revealed Wally to be over there. And you can see if we make it transparent, you can see that that page has been shifted. So what essentially is happening is I keep moving where this page is cuts a little hole. And what I'm doing is essentially revealing where Wally is. So I've proved that I know the location of Wally without revealing where exactly he is. This may be now look at another example. So example number two, which Pokemon card is fake. So let's say there are two Pokemon cards. I can tell which one is fake, but my friend thinks that they are identical. And they're also very skeptical of my ability to tell the difference. So how do I prove that I know the fake one without giving up the knowledge of which one is fake? So from my friend's view, the two cards are identical. Card A and card B look the same. However, from my view, I can tell that one of the cards is indeed fake. So how do I prove that I have this ability to my friend who is skeptical? So what we can do is arrange the following experiment. My friend takes both cards and puts them behind his back. He then brings one card from behind his back and reveals it. After I see the card, I say nothing. And he returns the card behind his back. My friend can then decide to either switch the cards behind his back and show me a different card or to not switch the cards behind his back and show me the same card. Now I cannot see whether he's switching or not at this stage. My friend then brings one card from behind his back and reveals it. He then asks me if I've switched or not, or if he's switched or not. Now because I can distinguish between the cards, I can answer him correctly. So if I see card B after the first reveal, and then card B again after the second reveal, I can determine that a switch didn't occur. Notice that I never have to reveal whether or not card B is fake. Now look, there is a 50% chance that I can't distinguish and that I just guessed correctly. But if we do the experiment twice, then there's only a 25% chance that I guessed both times correctly. And if we do the experiment 10 times, well then there's a 1 in 1024 chance that I guessed all 10 correctly. So the more we do this experiment, the more confident my friend will be in my ability to distinguish between the cards. So the only way I know whether my friend switches the cards or not is if I can distinguish between the cards. Now I don't have to give up any knowledge on how I determine which card is fake or which card is the fake one. Thus this is a zero knowledge proof. Now why should you care about zero knowledge proofs? Let's quickly look at some use cases. And essentially it's all about data privacy. I have to share my information with an organization. Now that organization can get hacked or misuse my data. Now the zero knowledge proofs allow them to use my data without knowing what it is. Now they need my data. For example, insurance companies need to determine what my premium should be or government agencies and whether to issue visas. There's a lot of various times when organizations need our information. But now with zero knowledge proofs, we can make sure that we can prove something without giving those organizations access to our data. Now zero knowledge proofs are getting embedded into the next generation of blockchain technology. This means we can now prove your identity with various applications without having to share your ID or passport. For those of you who've tried to sign up to a crypto exchange, you know that it takes quite a long time and now this is going to streamline and secure the whole know your customer process. Now what this is going to do, it's going to make authorities like regulators more accepting of crypto. It's also going to probably bring in a much bigger players into the space because now they can build on blockchain while making sure that the regulator is still happy. So that's really, really exciting for the space. It's going to offer a lot more services to people, but it's also going to save you a lot of time and give you peace of mind when you sign up to these various decentralized applications. So essentially what zero knowledge proofs are doing, it's putting the user in control of their data and like I say, it's going to bring a whole bunch more players into the ecosystem. Now if you want to go down the rabbit hole of zero knowledge proofs, there is a whole list of various other topics that you can get into. However, this is beyond my current my current ability, but it is something to go into maybe read a few of these articles and build upon your knowledge on this really awesome and incredible technology. Hope you guys have enjoyed this video and I'll see you soon for another one. Cheers.