Zcoin – Zerocoin Protocol For Private Cryptocurrency Transactions?
Zcoin, also known as XZC or Zerocoin, is a cryptocurrency that aims to facilitate private financial transactions. Find out how it works today in our Zcoin review.
What Is Zcoin?
Zcoin is an implementation of the ZeroCoin Protocol, designed to be the world’s most private cryptocurrency protocol. One of the key innovations of the ZeroCoin Protocol is its use of Zero Knowledge Proofs, which guarantee complete financial privacy anonymity.
Many people believe bitcoin is an anonymous digital currency. However, bitcoin is one of the least private digital currencies available online today. The transactions are broadcasted on a public ledger. Anyone can see your bitcoin address, your transaction history, and the value of your wallet. All it takes is one connection between your bitcoin address and your personal information, and anyone can use the public ledger to spy on your funds.
That’s where Zcoin, released in October 2016, sees an opportunity for improvement. Zcoin improves the privacy of bitcoin’s protocol.
With that in mind, let’s take a closer look at how Zcoin works.
How Does Zcoin Work?
Zcoin improves the privacy of bitcoin’s protocol in the following core ways:
Minting: Zcoin uses ZeroCoin technology that allows users to “mint” a coin found on the public ledger into a private coin.
Spending: When you need to spend your minted coin, you don’t need to reveal your identity. The owner of a minted Zcoin does not need to be revealed to complete a transaction.
Repeat: The process of minting and spending a coin can be completed as many times as you want, ensuring complete privacy.
The foundation of Zcoin relies on Zero Knowledge Proofs. Zero Knowledge Proof is a method in which a person can prove to another person that a given statement is true without conveying any information apart from the fact that the statement is true. Obviously, that sounds contradictory. However, the ZeroCoin Protocol is based on this concept.
Basically, Zcoin uses zero knowledge proofs by making a zero knowledge cryptographic statement. When someone receives a Zerocoin digital token, that person only knows that “X” amount of money was sent to their wallet. There’s no other information attached to the transaction. So unlike bitcoin, there’s no wallet address or other information exchanged between the sender and receiver, or even any attached transaction history. With Zerocoin, transactional history is completely removed.
Another key technological feature behind Zcoin is the Merkle Tree Proof of Work (MTP). MTP is a mining algorithm that emphasizes high performance, high security, and egalitarian computing. MTP was introduced in 2016 to create a more privacy-centric cryptocurrency ecosystem. Some of the benefits of MTP include a reduced ability for botnets to mine, and an increased ability for legitimate CPUs to perform proof of work.
You know how the bitcoin community is frequently accused of being run by a few major mining pools? MTP is often proposed as a way to deal with that problem. It allows a memory hard proof of work to be used while remaining very lightweight and quick for nodes and miners to verify.
Zcoin was the first cryptocurrency to implement MTP, something they achieved in 2017.
Zerocoin also uses features like Znodes (incentivized nodes for Zerocoin processing) and the Sigma Protocol (which allows for trustless setup). The developers expect to develop Sigma Protocol over 2017, although it could be pushed in 2018. By 2018, they also hope to create a decentralized marketplace where users can trade items or Zcoin without the need for a centralized marketplace or exchange.
About Zcoin Tokens
There will be a total supply of 21 million Zcoins. The tokens will follow the same halving cycle as bitcoin (every 4 years), with 10% of the total Zcoin supply being distributed to the Founders Reward as time passes. The Founders Reward is given to early investors, developers, and Zcoin community members.
It’s important to note that Zcoin is not a fork of Zcash. ZeroCoin is the technology, and Zcoin is the coin – similar to how Zerocash is the technology and Zcash is the coin.
There is, however, a connection between the two currencies: Zerocash was built on Zerocoin’s concept, although it wasn’t a fork of the Zerocoin blockchain. Zerocash was built to address the perceived shortcomings in Zerocoin.
Who’s Behind ZeroCoin?
Zcoin was proposed by Johns Hopkins University professor Matthew D. Green, along with graduate students Ian Miers and Christina Garman. The team proposed Zcoin as an extension to the bitcoin protocol, adding true cryptographic anonymity to bitcoin transactions.
The team originally proposed ZeroCoin as a mixing service built on the bitcoin blockchain. Today, however, it’s a separate blockchain with its own currency. The team eventually launched Zcoin on September 28, 2016 to demonstrate the power of their ZeroCoin Protocol.
Zcoin, or XZC or ZeroCoin, is a cryptocurrency introduced to solve problems with the bitcoin blockchain. The currency has a number of unique features that distinguish it from bitcoin – including anonymity services and zero knowledge proofs. The currency was designed to showcase the power of the ZeroCoin Protocol.
You can learn more about Zcoin, XZC, or ZeroCoin by visiting the official website online today at Zcoin.io.
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