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How ZK-Rollups Could Speed Up Transactions and Mainstream Adoption
In this episode of Understanding Crypto, Paul Abercrombie demystifies Zero Knowledge Rollups or ZK Rollups, a layer 2 scalability solution which promises to improve the speed and cost of transactions. Paul says the function of the ZK Rollups is similar to a solicitor who confirms the specifics of a purchase without letting both sides see all of the information.
The Problem
Paul says that the two major challenges facing the crypto industry are scalability and inter-portability. Currently most large scale investments in the crypto market are based on addressing one or both of these challenges. In a typical crypto transaction all parties and nodes have to agree on the terms and conditions, known as proof of work. Additionally, gas fees make the process expensive: “You are paying to use the Ethereum network and out of gas fees, miners get paid their fee for carrying out that transaction,” Paul remarks. He believes that these operations are time consuming, expensive and ultimately reduce the system's efficiency. [Listen from 2:09 ]
The Solution
Zero Knowledge Rollups or ZK Rollups, one of the possible scalability solutions, helps to expedite the process by accepting only specific information from the contract, effectively reducing the time required for the transaction. ZK Rollups functions like a solicitor who confirms the specifics of a purchase without letting both sides see all of the information, Paul says. Currently, each node retains a copy of every transaction that occurs in the Ethereum blockchain. Paul comments, “That's exactly what scalability solutions are trying to solve with ZK Rollups, a way of storing that information off chain but providing enough information so both parties can agree.” The Merkle tree cryptographic structure, which is used to store data and enable knowledge transfer between participants, makes this possible. He suggests that listeners look for blockchains that are actively tackling the issue of scalability through solutions like ZK Rollups when looking for new investments. [Listen from: 6:50]
Key Takeaways:
- Blockchains may be able to store data off-chain using Zero Knowledge Roll Ups, a potential scalability solution.
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By Phonic Media
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In this episode of Understanding Crypto, Paul Abercrombie demystifies Zero Knowledge Rollups or ZK Rollups, a layer 2 scalability solution which promises to improve the speed and cost of transactions. Paul says the function of the ZK Rollups is similar to a solicitor who confirms the specifics of a purchase without letting both sides see all of the information.
The Problem
Paul says that the two major challenges facing the crypto industry are scalability and inter-portability. Currently most large scale investments in the crypto market are based on addressing one or both of these challenges. In a typical crypto transaction all parties and nodes have to agree on the terms and conditions, known as proof of work. Additionally, gas fees make the process expensive: “You are paying to use the Ethereum network and out of gas fees, miners get paid their fee for carrying out that transaction,” Paul remarks. He believes that these operations are time consuming, expensive and ultimately reduce the system's efficiency. [Listen from 2:09 ]
The Solution
Zero Knowledge Rollups or ZK Rollups, one of the possible scalability solutions, helps to expedite the process by accepting only specific information from the contract, effectively reducing the time required for the transaction. ZK Rollups functions like a solicitor who confirms the specifics of a purchase without letting both sides see all of the information, Paul says. Currently, each node retains a copy of every transaction that occurs in the Ethereum blockchain. Paul comments, “That's exactly what scalability solutions are trying to solve with ZK Rollups, a way of storing that information off chain but providing enough information so both parties can agree.” The Merkle tree cryptographic structure, which is used to store data and enable knowledge transfer between participants, makes this possible. He suggests that listeners look for blockchains that are actively tackling the issue of scalability through solutions like ZK Rollups when looking for new investments. [Listen from: 6:50]
Key Takeaways:
- Blockchains may be able to store data off-chain using Zero Knowledge Roll Ups, a potential scalability solution.