Technology Meets the Moment: Zero Knowledge in Telecom Blockchain

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The resource-intensive inefficiencies inherent to telecom ordering, billing, and service level agreement (SLA) enforcement between carriers is an industry-wide problem that MEF and its member organizations have been working to solve for years. Giant leaps have been made toward fully digitizing transactions and leveraging Network-as-a-Service (NaaS) ecosystems to streamline and standardize processes across the industry, including increased adoption of MEF LSO API transaction standards.

Still, there has always been a missing piece of the puzzle: a shared single source of truth for all transaction records between carriers that allows for collaboration, real-time mutual endorsement, and automated transactions.

The answer is finally here. Not surprisingly, it’s multifaceted, involving a marriage between two technologies: blockchain and zero-knowledge technology.

Emerging and Established Technologies Meet to Enable Scalable, Private NaaS Solutions

In his recent post on automated SLA enforcement MEF VP of Strategic Programs Daniel Bar-Lev describes blockchain as “the path forward, not just for SLAs, but for the challenges inherent to many telecom business lifecycle processes such as ordering and billing, and product inventory, to name just two examples.”

As one of the key technology pillars to tackle these industry challenges, blockchain technology offers an extremely secure environment by storing shared and mutually endorsed data in blocks that cannot be altered without the consensus of the entire network, which can include millions of nodes. It’s the key to writing immutable, durable records that remove any subsequent uncertainty between carriers when it comes time to settle—uncertainty that today leads to a proliferation of billing errors and lengthy disputes that consume valuable resources for all carriers involved.

By design, decentralized distributed public digital ledgers, while they cannot be altered, are not private. Private blockchains are more akin to distributed databases with a bit of cryptography thrown in but private blockchains present their own set of challenges. The privacy issue presents a non-starter for carriers because it is critical to protect their pricing, terms, and conditions from general visibility to the world. While private blockchain solutions between only two entities solve for privacy, the immense cost involved in standing up and maintaining such solutions makes them unrealistic for most, and unscalable even for the world’s very largest carriers and trading partners.

Ironically, the best solution to the public blockchain privacy conundrum lies in a technology that’s been around for decades. Zero Knowledge Proofs (ZPKs) are the critical underlying component to creating secure and private communication, digital identity, and blockchains. Bringing ZKPs to public blockchains enables a hybrid solution: Transactions are executed in a centralized, permissioned execution environment (layer 2), with strong encryption and visibility constraints protecting privacy, before writing an obfuscated data record together with a ZKP of correct transaction execution to a public blockchain (layer 1) where the ZKP is verified finalizing the layer 2 transactions on the layer 1.

This two-layer system leveraging ZKPs makes global adoption and scalability of immutable shared transaction records that preserve privacy a very realistic outcome for carriers of all sizes.

The Critical Role of Zero Knowledge Proofs in Blockchain

According to an article by ConsenSys MESH, an organization committed to supporting the pioneers of Web 3.0, zero-knowledge proofs “allow information verification without disclosing the data itself—a groundbreaking cryptographic method ensuring both privacy and proof of specific knowledge. In the context of billing and settlement, ZKPs can play a crucial role in protecting sensitive business data and maintaining confidentiality during transactions.”

While ZKPs have been around since the 1980s, the advent of public blockchains, especially privacy-preserving digital currencies such as Zcash, and the need to scale transaction throughput on public blockchains through layer 2 solutions started a ZKP revolution around 2016 that has not abated but rather is still picking up steam with large scale VC investments into dozens of zero-knowledge technology web3 projects currently advancing the state of the art. These efforts have also spilled over into the enterprise space with the Baseline Protocol and the Nightfall project as two prominent examples of this emerging movement.

Within a public blockchain environment, and without the addition of a layer 2 zero-knowledge proof, anyone could see sensitive transaction details posted in a blockchain record. For example, if transaction records were written directly to a blockchain they would look like these three transaction records:

But with ZKPs, and utilizing a Layer 2 roll-up, the only information visible in the public blockchain record looks like this:

Blockchain and ZKPs Pave the Way to Smart Contracts and Fully Automated Transactions

As carriers become more comfortable collaborating with each other and mutually endorsing transaction details on the blockchain, the stage is set for smart contracts that automate real-time order rating, SLA enforcement, and all other transactions between carriers. This will help eliminate billing errors, validate that all orders are optimized, and generate significant operational efficiencies and savings for all parties. ZKPs will move the industry toward the fully digital NaaS ecosystem that represents the future of telecom.

In fact, the first use case, Project Wolf Town, is already live. As SVP of Blockchain for Sage Management April Taylor explains in her recent post, Project Wolf Town tests the open source smart contracts and MEF LSO APIs for automating the SLA enforcement process and stands to save both buyers and sellers the significant time and expense typically invested in the effort. Incorporating ZKPs into the project will be the final step in establishing a privacy-preserving public blockchain for SLA enforcement that is scalable –  any global carrier can join.

Learn More

MEF and Sage Management are excited to demo the Project Wolf Town telecom blockchain solution for all GNE attendees during the MEF Accelerator Live portion of the GNE conference, with identical presentations available. The presentations will give a closer look at how zero-knowledge proofs are the key to privacy in a fully scalable public blockchain for any carrier that wishes to join.

Join us at GNE to see the various technologies behind blockchain solutions and how NaaS will be a reality in the telecom industry in the near term.

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Andreas Freund

Andreas Freund


Andreas is the CTO of MOBI and co-founded several blockchain startups. Distinguished engineer in Blockchain. Thought leader with 20+ years of experience in tech across many industries.