Verification Dilemmas, Law, and the Promise of Zero-Knowledge Proofs

55 Pages Posted: 18 Feb 2021 Last revised: 6 May 2021

See all articles by Kenneth A. Bamberger

Kenneth A. Bamberger

University of California, Berkeley - School of Law

Ran Canetti

Boston University, Department of Computer Science; Boston University, Faculty of Computing and Data Science; Boston University, Center for Reliable Information Systems and Cybersecurity

Shafi Goldwasser

University of California, Berkeley - Simons Institute for the Theory of Computing

Rebecca Wexler

University of California, Berkeley, School of Law

Evan Joseph Zimmerman

University of California, Berkeley - School of Law

Date Written: February 7, 2021

Abstract

Individuals expose personally identifying information to access a website or qualify for a loan, undermining privacy and security. Firms share proprietary information in dealmaking negotiations; if the deal fails, the negotiating partner may use that information to compete. Regulators that comply with public transparency and oversight requirements can risk subjecting algorithmic governance tools to gaming that destroys their efficacy. Litigants might have to reveal trade secrets in court proceedings to prove a claim or defense. Such “verification dilemmas,” or costly choices between opportunities that require the verification of some fact, and risks of exposing sensitive information in order to perform verification, appear across the legal landscape. Yet, existing legal responses to them are imperfect. Legal responses often depend on ex post litigation remedies that are prohibitively expensive for those most in need, or that fail to address abuses of information entirely.

Zero-knowledge proofs (ZKPs)—a class of cryptographic protocols that allow one party to verify a fact or characteristic of secret information without revealing the actual secret—can help solve these verification dilemmas. ZKPs have recently demonstrated their mettle, for example, by providing the privacy backbone for the blockchain. Yet they have received scant notice in the legal literature. This Article fills that gap by providing the first deep dive into ZKPs’ broad relevance for law. It explains ZKPs’ conceptual power and technical operation to a legal audience. It then demonstrates how, and that, ZKPs can be applied as a governance tool to transform verification dilemmas in multiple legal contexts. Finally, the Article surfaces, and provides a framework to address, the policy issues implicated by the potential substitution of ZKP governance tools in place of existing law and practice.

Keywords: Zero-Knowledge Proof, ZKP, Verification, Disclosure, Privacy, Accountability, Due Diligence, Trade Secrets, Cryptography

JEL Classification: K22, K23, K42, K12, K41, C00, C02, C65

Suggested Citation

Bamberger, Kenneth A. and Canetti, Ran and Goldwasser, Shafi and Wexler, Rebecca and Zimmerman, Evan, Verification Dilemmas, Law, and the Promise of Zero-Knowledge Proofs (February 7, 2021). Berkeley Technology Law Journal, Vol. 37, No. 1, 2022, Available at SSRN: https://ssrn.com/abstract=3781082 or http://dx.doi.org/10.2139/ssrn.3781082

Kenneth A. Bamberger (Contact Author)

University of California, Berkeley - School of Law ( email )

Boalt Hall NA446
Berkeley, CA 94720-7200
United States
(510) 643-6218 (Phone)

HOME PAGE: http://www.law.berkeley.edu/faculty/profiles/facultyProfile.php?facID=5701

Ran Canetti

Boston University, Department of Computer Science ( email )

Boston, MA
United States

Boston University, Faculty of Computing and Data Science ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Boston University, Center for Reliable Information Systems and Cybersecurity ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Shafi Goldwasser

University of California, Berkeley - Simons Institute for the Theory of Computing ( email )

121 Calvin Lab #2190
UC Berkeley
Berkeley, CA 94720
United States

Rebecca Wexler

University of California, Berkeley, School of Law ( email )

691 Simon Hall
Berkeley, CA 94720
United States
510 664 5258 (Phone)

Evan Zimmerman

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

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