Education | Article

NFT Futurism – Keys, ZKs, and DIDs

By Handsome Bob | NOV 12, 2022

NFT Futurism - Keys, ZKs, and DIDs 8:37 Min Read

NFT Futurism – Keys, ZKs, and DIDs

There are three main concepts I want to lightly introduce and then expand upon. I will be attempting to peek into the future of NFTs, and find the non-BAYC, monkey-free layer of sweet, sweet future tech.

Don’t worry if this seems overwhelming at first; it’s all really quite simple. In fact, from a security standpoint, it’s going to make our lives a hell of a lot easier.

It’s also going to likely eliminate most man-in-the-middle attacks, weak security due to useless passwords, and generally allow you to control your personal data in whatever way you see fit. At the very least you will be allowed to make decisions about what you are comfortable with sharing. Ultimately the markets will adapt to what the users decide.

Here are the three main concepts before we get to the future. I’m not assuming any prerequisite crypto knowledge; I’m just trying to distill this down to palpable information, and maybe inspire a neuron, or two.

Public and Private Keys

Pretty self-explanatory for most – the public key exists on the blockchain as a gateway for transactions.  Your private key proves you can access this matching public key.

You can think of a public key as an address where people can send you crypto (such as Bitcoin) and the private key proves you are the owner of that public address. This description is mostly just to show a technical method. This can be useful in understanding the two concepts below.

Zero-Knowledge Proofs

In cryptography, a zero-knowledge proof is a method by which one party (the prover) can prove to another party (the verifier) that a given statement is true.  Meanwhile the prover avoids conveying any additional information apart from the fact that the statement is indeed true.

In other words, I can prove to my bank that I am the owner of a certain account; without actually sending my password to them, or typing it into the website. There is a lot more to this technology, of course. The most important technicality in this example is that you would have had already setup a password with the bank at a prior time; most likely at a branch or secure location.

When you are using a ZK proof, you are able to prove something is true without actually showing any other information. You’re not actually sending the ‘knowledge’, you are proving you have it.

Digital Identities (DIDs)

These are pretty much what they sound like, but you are able to limit exactly what you share with a person, company, or group.

It’s similar to having a bunch of gaming profiles on an Xbox or Playstation. You have what you show the government, what you show a grocery store, what you might show a concert promoter, and finally what you might show your bank. Each profile is designed to only show what is necessary, only to share what is required. Hopefully DIDs will be the death of unnecessary data mining, and a more reasonable (and safer) Internet experience.

Ok, so we have private, and public keys that allow us to control ownership of anything we can reach in the physical and virtual world. We have blockchains listing all transactions. We have ZK-proofs to allow simple privacy of the aforementioned keys. Finally we have DIDs to easily setup and organize this technology, allowing us to breeze through our tens, hundreds, or even thousands of Internet interactions each day.

A quick list of common NFT use cases in today’s world.

  • Fashion
  • Licenses & Certification
  • Collectibles
  • Event Tickets & Merchandise
  • Gaming
  • Augmented & Virtual Reality (AR/VR)
  • Legal Documents
  • Invoices
  • Health Records
  • Voting


Future Scenario #1

Alice walks into the hospital with shortness of breath. She has a history of asthma, and is allergic to a few common food ingredients. She’s having trouble breathing. She’s probably going to have a hard time giving her personal information, go through triage, show her health plan, or even attempt to have the hospital find her medical records.

With the above three pieces of technology mentioned above, Alice can just take out her phone, select her DID medical profile, and transfer access to her medical data on the blockchain. If the hospital is unable to access blockchain health records, she can just use her phone to send an open-sourced compliant template.

In fact it is more likely that Alice’s medical records are already stored on the blockchain and she just needs to prove to the hospital that the records are hers.

Future Scenario #2

Bob wants to rent an apartment, but the landlord wants:

  • Completed Rental Application
  • Proof of Employment
  • Proof of Income
  • Bank Statements
  • Photo ID

You can imagine how this is a nightmare, and extremely unsafe for anyone’s data. How many landlords or condo corporations need to see your financial and employment data before it gets leaked, hacked, abused, or worse?

One of the tests of Zero Knowledge Proofs was validating data even if you didn’t trust both sides of any transaction. So, what does a landlord, or rental organization really need to know?

How about the following:

  • Proof of Identity (DID)
  • Proof of Income (ZKP) – You are gainfully employed, don’t need a landlord to know with whom.
  • Proof of Assets (ZKP) – You have proven means to pay 40x rent.

Future Scenario #3

You have kids and need to login to Google Meet, Google Classroom, YouTube, Team Signups, Parent Teacher Groups, basically anything where you need to prove your kid is a student, or member of that particular sports team.

Proof of Membership (DID)


Proof of Identity (DID)

In fact depending on the team, or how deep your child is involved there are so many use-cases that it’s a bit overwhelming. DIDs and ZKPs are a bit interchangeable here, I’m only aiming to prove that if you squint your eyes a bit into the future you can see how this can be very useful technology. ZK proofs in particular have been around for a very long time, they just needed to find that product market fit.

Another few simple scenarios would be private voting, and private blockchain transactions, but I want to end with one more interesting advancement in regards to NFTs and their technical underpinnings.

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Off-chain files can be stored on-chain

It’s a bit of a circular maneuver, but typically NFTs have a media file. These would normally be stored off-chain on AWS (Amazon Web Services) or a similar service as an efficient, inexpensive solution.

In 2021 these media files started to be stored with Filecoin – using IPFS (Interplanetary File System). Web2 cloud computing is still used as a backup to the backup. This leads to problems. It makes decentralized technology dependent on web2 centralized technology (e.g. AWS) as a last resort.

I’m not going to get into the whole ‘How much decentralization is enough?’ argument. Needless to say we need these unique protocols to be able to operate without a single corporation or jurisdiction deciding that they don’t like a particular use-case or codeblock of certain protocols.

Here’s the problem with the IPFS storage solution. Even if you used Filecoin there was a risk the file would not be stored permanently. This is because Filecoin works on an incentivizing structure for miners, so it’s a bit of a process. Still, it’s better than AWS from a web3 point of view.

Blockchain storage solutions

Enter Arweave and Shadow Drive – both permanent blockchain storage solutions. This has mostly closed the loop: Arweave and Shadow Drive store for keeps.

Currently popular NFT marketplaces such as OpenSea and Magic Eden use Filecoin, and as a worst-case scenario use centralized servers as a backup. This means that your data is pretty safe, but not very decentralized.

In the past if the servers went down (or worse, lost the data) your NFT collection was gonzo. Generally most NFT marketplaces seem to exclusively use Filecoin and IPFS right now.

This is much, much better than when any data too expensive to store on the blockchain was all stored on web2 cloud services. In fact, Arweave and Shadow Drive have so many new products coming it’s hard to tell how much data will actually NOT be stored on the blockchain.

The problem with AWS dependency

One of the longest-standing arguments against crypto use-cases was the fact that the logic and data storage areas of crypto were dependent on AWS. If AWS went down, the blockchain would go down.

Another way to visualize this is to imagine all data as oceans, lakes, and rivers. AWS is like a huge ocean, all data in it is dependent on Amazon, and if it fails, all data in the ocean fails at once.

Decentralized storage is more similar to millions of rivers, branching out to thousands of lakes. If a few lakes fail, the data can swim to other lakes via the millions of rivers. This is the power of decentralized data.

Then again, it’s useless if it’s not fast, scalable, and censorship resistant. The entire digital world basically runs on AWS right now, and this mainly means European and North American jurisdictions. Freedom of data transmission means new markets, but new markets hurt old markets. I’ll leave it at that for now.

To sum it all up…

With the entire web3 data loop now arguably complete – it is possible to glimpse into a future where the world’s data floats around like a torrent file, but without a tether attaching it to a physical location. NFTs, as they were first constructed, were unique non-fungible tokens that represented a person, place, or thing existing anywhere in the world virtually, or in reality.

Don’t just squint your eyes, close your eyes. Imagine a world where not just things, but the parts of all things can be efficiently traded, interacted with, or simply proven to exist, all at the speed of current hardware data transmission.

In this article I’ve mostly been talking about only one color of the entire spectrum. Namely, that is the exciting applications of Zero-Knowledge Proofs. Just go to sleep knowing that much more is in store!

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Author: Handsome Bob

The older and wiser Bob of the duo. He chooses to spend his time buried in history books to further understand mankind and the various ways he is governed. He’s determined to apply this worldly knowledge to its decentralized autonomous counterpart but must finance this through his writing.

Education: Masters in Cardano

Crypto Class of: 2021

Fun Fact: Older than sand

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