Kaspa: How ZK Turn Blockchains Into Settlement Layers (Part II)

[00:00:00]What's going on, guys? This is James Allen. I am recording this on Friday, December 19th, 2025.

[00:00:10]You are watching part two of why Caspa is going to become the universal settlement layer of blockchain. In part one, we covered what ZK proofs are. We explained that ZK proofs are a way of verifying something without disclosure.

[00:00:25]Again, CK proofs are a way of verifying something without disclosure. They are part of the trend to reduce information leakage. Be sure to watch part one if you haven't already. Very interesting section. In part two, we will cover why ZK systems are the future of blockchain.

[00:00:43]Again, in part two, this episode, we will cover why ZK systems are the future of blockchains. And there's mainly three reasons. The first one is that they allow blockchains to offload computation. The second reason is they allow blockchain to scale. And the third reason is that they allow blockchains to interoperate. Let's get into the first part. They offload computation from the blockchain. If you remember doing computation on chain is a very expensive matter, very expensive business because every node have to re-execute uh the computation, right? So that's tremendously wasteful and not optimal whatsoever.

[00:01:24]And ZK proofs, what they basically do is they compress the execution for the blockchain layer. I'm going to say that one more time. ZK proofs compress the execution for the blockchain layer so that the blockchain layer doesn't have to re-execute. It just verifies that the execution was done correctly. Now this is a little abstract. Uh I understand that some people may not understand all this abstract abstract concepts. So I've thought of a an analogy to make that a little clearer to you. I'm going to use a classroom example like a test classroom example to kind of drive home how ZK proofs allow blockchain to offload computation. Let's just say a teacher is giving out an exam. He has 50 students and he's given out a 100 question exam. So again 50 students and the exam is 100 questions. Now when the exam is finished and the professor or teacher collects the exam, he has to grade them, right? So the traditional option would be for him to grade the exam one by one and go through each question one by one. So 100 questions, 50 students, that's 5,000 checks, right?

[00:02:42]So, the teacher would have to do 5,000 checks in order to grade the entire classroom. That would be the traditional way of doing computation on chain. You check every question for every student and you have 5,000 transactions. Now, let's just say that the the teacher is smart and he uses a ZK system on the exam. Now when the student takes the exam and finishes the exam automatically generates like a geometry that summarizes the result of the student. So different results will give you different geometric shapes. So if the student gets 50 of the questions wrong that's one geometric shape. If they get uh 70% of the questions correct that's another geometric shape. if they get 90% of the questions correct again. So you have different geometric shapes based on a result. So let's just say when a student takes the exam that ge geometric shape is generated along with a proof of how that geometric shape came to be. Now instead of the professor having to verify each question one by one, they could just he could just look at the geometry of the result, right? he could just look at the geometric result of the test and know, okay, this student got 90 or this student got 70 or 65, right? So, instead of doing 5,000 checks, the teacher now just does 50 checks. He just looks at the geometric result and he could also look at the proof to make sure that geometry was arrived correctly. That's an example of using ZK systems in a blockchain. Instead of 5,000 transaction, you just have 50 verific verifications and you know everything was done in a fair way. Now let's move on to the second point. Um uh ZK systems let blockchain scale and that's the very important component of it because you cannot increase block size forever. You cannot decrease block time forever neither. You cannot shard indefinitely without compromising security. I've talked about that in my episode ICP versus Internet Computer.

[00:05:01]When you shard the blockchain, you're basically um compromising its security.

[00:05:07]So, there is real limitations on how much the blockchain can scale hardware-wise and in terms of architecture without compromising what the blockchain is meant to do in the first place. ZK proofs basically remove that scaling limitation because some ZK systems they're known as ZK rollups um they can batch thousands sometimes millions of transactions into one proof right so when that ZK system takes a million transaction and batch it into one proof um that blockchain just now have to verify that one proof proof to make sure those thousand transactions are accurate. So that blockchain just basically scale a millionfold. If you remember the teacher example I gave where you know the exam looks at the question the student answers and create a geometric result that basically represents the score of the student.

[00:06:07]When a ZK rollup system batches a million transaction and sends that proof to the blockchain. Now the blockchain could just verify that one proof and know that those million transactions was done correctly. That blockchain network just scaled a million fold. So I hope you realize that ZK proofs allow the blockchain to scale without compromising its architecture, its security and it removes all those barriers, those real limitations that the blockchain will at some point hit a hard ceiling. Like I said, you cannot increase block size forever. You cannot decrease uh block time forever and you cannot shard the blockchain indefinitely without compromising security. So ZK proofs are a way of scaling the blockchain. Again, it does that by compressing the execution into a proof so that the blockchain layer just verifies the proof. The last one is ZK systems allow blockchains to interoperate. And that's perhaps the most important one. We could argue they're all important, so I don't need to rank them. But what you have to understand is that a proof generated on one blockchain can be verified by another blockchain. I'm going to say that one more time. A ZK proof generated by one blockchain can be verified by another blockchain. So because proofs can be verified across chains, this basically allowed blockchain networks to talk to each other. So this is a form of trustless bridging system. So it allows uh crosschain asset validation, right?

[00:07:36]it allow multi-chain DeFi, right? So blockchains are no longer siloed.

[00:07:41]They're actually sovereign networks that could share value with one another, right? And trade information and validate assets with one another, validate state transitions to one another, right, through this um ZK system because again a proof generated in one chain can be verified in another.

[00:08:01]So uh in a way ZK systems allow what Gavin Wood uh was envisioning with Polka Dot. He envisioned uh a unified uh layer where blockchains could talk to each other and he was hoping Polka Dot could do that. But it's looking like that's going to be ZK systems that's going to serve as that layer zero. Now, in the next episode, I'm going to talk about why Caspa is the blockchain is the only blockchain that can handle full proofs without um a hiccup. Because if you remember, uh Uncle Stefan, that's the point he had stressed in his ex uh post.

[00:08:36]So, this next and final article is where I'm going to talk about why Casper is the only blockchain that can handle full proofs without congestion. And I think you Casper guys are going to love that.

[00:08:46]But, I hope this episode made it clear why ZK systems are the future of blockchain. And with Caspa being the only protocol that could fully ingest them without hiccup, we're in a very good position for the future because I do think the industry is going to catch up. And when they do catch up, Casper might actually become a layer zero for all other networks. In any case, my misfits, that's all I have for you in this episode. If you would like to book a consulting session with me, there's a link in the description. Um uh don't forget to press that like button and of course support me on Patreon because I'm a solo entrepreneur operating by myself so I could use your support. In any case, I will see you next time.