I love this. It could be one of the stories the [Young Lady's Illustrated Primer might tell Princess Nell](http://enwp.org/The_Diamond_Age) when she ventures forth from Castle Turing.
The finest book I've ever read. Perhaps by the time my 2-year-old is ~13, a nano-scale machinebook will exist that can teach the both of us about zero-knowledge protocols. I understand, at the surface level, how it works, but am far too dense to see how such a system could exist in, say, computer authentication.
The Diamond Age is my favorite, by far, of the work of his that I've read (including the two you mentioned). It's very very good. I like the way he imagines a world where everyone can print whatever they need from The Feed (nanomachines + materials), and yet it's so different from the techno-utopias we have seen before where such is possible.
Most importantly, I really liked the characters (just like I did in Snow Crash). It's interesting in that there doesn't seem to be an antagonist, really -- it's more about the journey of the young lady. It's a neat fairy tale.
I never really noticed the "no antagonist" until you just mentioned it - I find that's a sign of maturity in a literary work - a story can be riveting by just seeing different people/organizations in contention with their own aims - not the simplistic good vs. evil trope.
He wanted, in fact, to show that it is possible to convince without revealing, and so without unveiling his secret.
Or from wikipedia [1]:
In cryptography, a zero-knowledge proof or zero-knowledge protocol is a method by which one party (the prover) can prove to another party (the verifier) that a given statement is true, without conveying any information apart from the fact that the statement is indeed true.
I think the privacy component is also important (somehow hidden in "without unveiling his secret", but not so clear imo). When Alice proves her knowledge to Bob, no external party would "believe in the proof", as A & B might have colluded.
I could tell you but, to trust my information, then how might you determine if I actually know what Zero Knowledge Protocols are without knowing them yourself?
If interested in the subject, I'd suggest to have a look also at DAA - Direct Anonymous Attestation [1]. It's probably one of the most advanced protocols related to ZKP, part of the Trusted Computing Group specs, there are several newer versions on pairing-based crypto, there are implementations both software and hardware... in short, it's quite an interesting protocol.