Beyond Blockchain: Zero-Knowledge Proofs and the Road to a $10B Future

Key Takeaways

• $10 billion 2030 zk-Proof market: ZKPs exponentially improve the long term viability of AI and Web3, with the global zk-Proof market projected to reach more than $10 billion by 2030.
• Zero-knowledge proofs: Zero-knowledge proofs (ZKPs) are a privacy-focused cryptographic primitive designed to preserve underlying sensitive data.
• ZK-rollup throughput revolution: In this time, zk-Rollups will deliver 83,000 transactions per second (TPS) on Ethereum-compatible chains, surpassing Visa’s 65,000 TPS capacity and reducing fees by ~90%.
• Exponential Web3 demand: Web3 services will require 90 billion zk-Proofs annually, with advances in proof systems cutting cost per proof to ~$0.12.
• Enterprise adoption beyond crypto: Regulated industries such as healthcare, finance, and AI will increasingly use ZKPs to uphold compliance standards, with 40% of Fortune 500 companies expected to adopt ZK tech by 2030.

A Refresher on Web2 Privacy

In many ways, the internet’s second generation — Web2 — was driven by a fundamental technology: encryption.

Initially, the Secure Sockets Layer (SSL) — and later the Transport Layer Security (TLS) framework, cemented themselves as the underlying guardians of online commerce, facilitating everything from credit card transactions, network logins and sensitive file transfers, confidential email exchange, and beyond. If these cryptographic protocols hadn’t existed, it’s unlikely the digital economy as we know it would have materialized.

Today, with the continued emergence of of artificial intelligence (AI) and Web3 — as data breaches and unwarranted surveillance continue to erode digital trust — another cryptographic paradigm is poised to play an equally transformative role in the continued evolution of the internet by redefining online privacy and security: zero-knowledge proofs (ZKPs).

What are Zero Knowledge Proofs (ZKPs)?

As a refresher, zero-knowledge proofs are a cryptographic primitive that allows one party (the prover) to prove to another party (the verifier) that a specific statement is valid without unveiling underlying sensitive data.

Because of their privacy-centric design, ZKPs are reshaping the infrastructure of decentralized systems such as blockchains, AI platforms, and others. In recent years, zk-Proofs have been tasked with underpinning the financial infrastructure of a host of industries in Web3 and beyond.

These include: decentralized finance (DeFi), the Internet of Things (IoT), gaming and NFTs, identity verification, supply chain management, industrial automation, healthcare, banking and finance, logistics and transport, and a host of others.

Because of their many characteristics, ZKPs have the potential to realize a wide range of utilities in the above industries and others. Some of these include:

1. Enhanced privacy: As one of their defining attributes, zk-Proofs help ensure privacy because of their ability to enable statement verification (e.g., identity, transactions) without exposing sensitive information, protecting all-important personal data.
2. Improved security: By minimizing data exposure to unwarranted parties, ZKPs help eliminate data breaches, phishing attacks, identity theft, and more because of their ability to safeguard critical data, ultimately reducing the possibility of manipulation and theft.
3. Regulatory compliance: Through the usability of zk-Proofs, organizations of all shapes and sizes are more readily able to adhere to jurisdictional privacy laws (such as GDPR and HIPAA) without disclosing sensitive user data, resulting in more simplified compliance procedures in a plethora of industries.
4. Scalability: ZKPs allow for the compression of verification processes (such as blockchain transactions via zk-Rollups) to reduce computational load, enabling faster, cheaper transaction processing for a host of network types.
5. Decentralization: ZKPs help increase computing decentralization by supporting infrastructures such as self-sovereign identity (SSI) and others, resulting in the elimination of centralized authorities for credential issuance, credit validation, and other needs.
6. Data minimization: By leveraging zk-Proofs, data minimization allows users to share necessary information (i.e., the ability to verify an individual’s age without revealing their actual birthdate), to more stringently align with equitable privacy-by-design principles.
7. User-friendly authentication: ZKPs have the potential to help simplify a plethora of online authentication processes, replacing passwords with passwordless logins (e.g., SQRL, FIDO etc.), streamlining access to various online services while eliminating credential storage risks.

Zero-Knowledge Origins

Let’s look at a brief history of zero-knowledge technology:

• 1985: ZKPs are first formalized by Shafi Goldwasser, Silvio Micali, and Charles Rackof in the paper The Knowledge Complexity of Interactive Proof-Systems (first published in 1989), as the winners of the Gödel Prize.
• 1990s: Early zero-knowledge use cases focused on solving niche cryptographic puzzles, such as proving secret cave passwords without revealing them are realized (such as the Ali Baba Cave analogy).
• 2016: As a major pioneer in Web3 and crypto, Zcash launches the first ZKP-powered crypto and Web3 platform, enabling private transactions on a public blockchain for the first time.

Zero-Knowledge Proofs: Enhancing the AI Data Economy

All things considered, the economic impact of ZKPs in Web3 is analogous to the impact of encryption and SSL on Web2 by safeguarding a wave of online commerce and connectivity in the 2020’s, 2030’s, and beyond.

In today’s technological landscape, the intersection of zero-knowledge and artificial intelligence is playing an ever-increasing role in shaping critical decision-making processes across a wide range of industries. This will include zk-Proof generation APIs, hardware boxes for proof production, ZK-enabled compliance solutions, and much more.

Many experts feel that ZKP middleware product and service offerings will likely become the foundation of the privacy-focused AI and Web3 sectors. To realize this ultimate goal, it is necessary to leverage zero-knowledge (ZK) proving systems to verify AI inference in a trustless, decentralized, and scalable manner.

At this juncture, we have entered a multi-billion-dollar market where relying on trust is no longer enough — and verifiable and provably correct AI has become essential. In particular, it has become critical for AI systems to be able to prove the correctness of data through zero-knowledge machine learning (zkML) and other related technologies without exposing sensitive information to malicious parties.

For the most part, AI- and Web3-focused protocols that integrate zero-knowledge have a competitive advantage attracting users who value privacy and security. Furthermore, ZKPs are designed to help blockchains be regulatory compliant without sacrificing decentralization. As an example, they can help verify the integrity of computations performed without revealing sensitive user data, potentially bringing with it increased institutional participation.

At this time, ZK-rollup protocols that harness ZKPs — such as Starknet, zkSync, and Polygon zkEVM — are becoming increasingly integrated into the fabric of Web3 and AI infrastructure. These platforms and others, not only solve challenges related to rollup scaling and identity, but act as frameworks capable of spawning a vast range of newfound product and service offerings in market sectors within the Web3 and AI landscape.

Overall, zero-knowledge proofs provide a distinct technological differentiator for Web3 platforms: offering the sought after combination of scalability, privacy, and trustlessness in-one; while increasingly prevalent drivers of ZK expansion include enterprise demand for confidential compliance, AI serviceability and platform integration, Web3 scalability needs (Ethereum’s zk-Rollups), institutional crypto adoption, hardware innovation, and more.

The Economics of Proofs and Their 2030 Trajectory

Once confined to academic papers, rudimentary theoretical concepts, and basic working products, zero-knowledge proofs are now on the verge of catalyzing a multi-billion-dollar Web3 ecosystem.

Just as no progressive online business today operates without leveraging encryption, it’s clear that no serious Web3 venture in 2030 will operate without harnessing zero-knowledge cryptography in some form.

Ultimately, the result will be an internet where users and machines transact with one another in confidence — verifying what’s most important, while revealing only what’s necessary — to support the foundational building blocks of the next generation of the digital economy.

Quantifying the potential size of the ZKP market in the short to medium term is an important step in ensuring that investors appreciate the opportunity to invest in zero-knowledge architectures and hardware, thus ensuring the development of the paradigm for continued growth moving forward.

According to Aligned — a manufacturer of customizable GPU-powered platforms for AI and machine learning (ML) — by 2030, zero-knowledge proofs will underpin a new era of digital connectivity where privacy, scalability, and regulatory compliance coexist in a seamless and interconnected manner.

While conducting their research, Aligned created a framework that analyzes the potential market size and hardware requirements needed to scale zero-knowledge proof generation, beginning with the most prominent use of scaling the Ethereum blockchain and then estimating the market size by projecting the proportion of ZKPs which will be settled on other non-Ethereum L1s.

Ethereum as a Mechanism for an $87 Billion ZKP Market by 2030

The Ethereum blockchain is built to be as secure and decentralized as possible in return for sacrificing scalability. Therefore, Ethereum’s execution efficiency required dramatic improvements through numerous types of Layer 2 solutions — primarily via ZK-Rollups — typically representative as zkEVMs or zkVMs.

Importantly, Aligned notes that its prediction of 87 billion total zero-knowledge proofs by 2030 is based on several calculations related to the continued adoption of Ethereum zk-Rollup Layer 2 scaling solutions.

Consequently, Aligned derived their zk-proof market prediction predicated on the fact that Ethereum will continue to build almost exclusively zkEVMs and zkVMs L2s (via zk-proof settlement) to improve the network’s scalability. Their analysis highlights Ethereum as the cornerstone of their 87 billion total proofs prediction by 2030, while taking into consider several additional factors, including:

• Total number of Zk transactions per Ethereum block: In general, 15 million Gwei is the target gas fee limit per Ethereum block and each proof transaction requires 500,000 Gwei, while individual Ethereum blocks support an average of 30 ZKP transactions.
• Total zk-proofs generated per year on Ethereum: If we equate a total of 30 proofs per zk block to the approximately 7200 daily blocks that the Ethereum blockchain generates, it means that a maximum potential of 216,000 ZKPs are settled on Ethereum each day — or 78.84 million per year. The above totals are likely a starting point in the grand scheme of things, with 25% of Ethereum block space being used by zk-Proofs in 2024, this figure is projected to grow to 90% by 2030 (with 90% less fees per block). Overall, Ethereum Layer 2 scaling platforms will continue to see immense growth because they are able to divide individual gas fees among many zk-Proofs and transactions, making their business model more viable than other competing solutions.
• Increasing number of zk-proofs per block: Each individualized zk transaction within an Ethereum block has the potential to eventually become a rollup or numerous ZKPs with the network’s continued growth. In addition, the number of proofs per zk has the potential to increase as new zk-focused technologies improve and protocol types are developed and the Ethereum platform expands its overall functionality. Aligned’s analysis presumes that at outset, 15 ZKPs would be settled per zk block on L1, expanding to 810 ZKPs by 2027.
• Other non-Ethereum Layer 1 chains: Central to this analysis, we assume that numerous L2 rollup scaling protocols will select the Ethereum blockchain to facilitate the usability of zk-Proofs. Nonetheless, ZKPs will continue to launch on many additional L1s such as Bitcoin, Solana, Sui, NEAR, and others moving forward.

Overall, the above data suggested that at least 87 billion zero-knowledge proofs will be required to support the burgeoning Web3 application sector by 2030, encompassing more than 2.6 trillion total transactions — or 83 thousand transactions per second (TPS).

However, if we compare that to the Visa network, which has reached processing speeds of up to 65,000 transactions per second, and to the Alipay network, which has surpassed more than 250,000 transactions per second, it’s clear that the combination of zero-knowledge proofs and blockchain has vast potential long-term.

Further, if you consider that the above prediction does not consider zk-proof applicability for commercial applications such as supply chain, finance, healthcare, and other enterprise-focused utilities, this could be considered a relatively conservative prediction for the projected growth of zk proving as a whole.

The Digital Shift via ZKPs: Making Privacy the Internet’s Baseline

In a number of ways, zero-knowledge proofs represent more than a technical leap in how we verify data for AI and Web3 — they signal a philosophical shift in how the internet verifies trust. Similarly to how SSL helped facilitate the early functionality of the internet, ZKPs will embed privacy directly into the foundation of our digital interactions, resulting in:

• User empowerment: Users will achieve granular control over data exposure, allowing them to selectively share information, while keeping other sensitive details private.
• Institutional participation: Trillions in traditional assets will migrate to blockchain rails as the connectivity of mainstream finance increasingly integrates with Web3 and AI.
• Global collaboration: Cross-border systems where verification replaces surveillance will become the norm as users continue to realize the limitations of existing centralized infrastructure solutions.

As this reality unfolds, the emergence of increasingly complex zero-knowledge proof mathematics, increased scalability of zero-knowledge proofs within transaction blocks, and the growth of zero-knowledge proving beyond the Ethereum blockchain will become more pronounced.

To summarize the quantifiable metrics we touched on in the section above, Aligned hypothesizes that several key ZKP-focused milestones will be achieved by 2030. These include:

• $10.2 billion total ZKP market: Aligned expects that by 2030, $10.2 billion in revenue will be driven by ~87 billion zk-Proofs per year.
• 2.6 trillion ZKP-specific transactions: As 2030 approaches, Aligned forecasts that a total of 2.6 trillion Web3 application transactions will be secured by ZKPs, surpassing Visa’s peak capacity of 65,000 transactions per second.
• 90% reduction in network fees: By 2030, Aligned projects a 90% reduction in blockchain network fees through Ethereum-focused zk-Rollup scaling.
• Average proof cost of 12 cents: Aligned also anticipates zk-Proof costs to be reduced from an average proof cost of ~$0.21 in 2025 to an average of ~$0.12 per proof in 2030.

In a world where data breaches inflict billions in losses each year, zk-Proofs and other related Web3 and AI privacy frameworks pave the way for innovation to help ensure privacy continues to be a fundamental human right as the internet’s next generation evolves.

The above $10.2 billion ZKP market projection is driven by demand for Web3 and AI systems that verify truth without exposing sensitive data. In particular, ZKPs are focused on producing solutions for critical challenges in scalability, compliance, and data control, positioning them as the cornerstone of a privacy-first internet.

This prediction is more than just a revenue projection — it signals a pivotal shift in the evolution of the internet. It should be noted however, that a 2030 global zero-knowledge proof market of $10 billion is likely quite a conservative estimate and that it could grow to be much larger over the next 5 years.

About Inference Labs

Inference Labs is pioneering the development of blockchain-based decentralized AI through privacy-focused inference verification and zero-knowledge proving systems that leverage machine learning technology. By establishing robust cryptographic protocols, we enable off-chain AI outputs to be cryptographically verifiable, provably correct, private, and secure, ensuring AI models uphold the authenticity of critical data while remaining robust, open, and decentralized. To realize this broader mission, Inference Labs is powering the development of Sertn — an inference verification and zkML proving protocol built on EigenLayer — and Subnet 2, a decentralized inference verification subnet on Bittensor.