Zero-knowledge encryption is a method of ensuring data security and privacy by allowing only the user to have knowledge of the encryption key, preventing anyone else, including service providers, from accessing their data. This approach involves encrypting data on the user's side before it is transferred to external servers, effectively making it impossible for service providers to decrypt the data without the key. It utilizes both symmetric and asymmetric encryption techniques, with protocols like AES and TLS being industry standards for encryption-at-rest and encryption-in-transit, respectively. Zero-knowledge encryption is particularly beneficial for cloud storage and password management services as it minimizes server-side privacy breaches and liability for providers. However, it comes with drawbacks such as the inability to recover lost encryption keys, slower speeds due to the complexity of secure data transfer, and limited application features since service providers cannot access user data to personalize services. Ultimately, zero-knowledge encryption replaces the need for trust in service providers with mathematical guarantees of data security, aligning with the principles of Web3 by enhancing data privacy, sovereignty, and security.