That would work if you were only demonstrating encryption or creating challenges related to encryption, but some challenges don't map very easily to a cipher (t

That would work if you were only demonstrating encryption or creating challenges related to encryption, but some challenges don't map very easily to a cipher (though you might be able to get them to map to a cipher key). In Simplicity (and in a sense in Bitcoin Script) there's a broader concept of "if you show you know information X, you're entitled to this money", but it has this specific issue that if the information or the entitlement to receive money for knowing it isn't unique to a specific recipient, there will automatically be a witness swiping or front-running risk for architectural reasons.