zcash, the absolute privacy promise for blockchain transactions

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All the enthusiasts of the ecosystem are talking about Zcash, whose big launch, after some delays, occurs tomorrow, October 28th. The main characteristic that can be granted is summarized in one word: privacy.

Other key words associated with this cryptocurrency are actually very prominent names: Zooko Wilcox, its founder, Gavin Andresen, Vitalik Buterin, Matthew Green, Adam Ludwin, Erik Voorhees and, in fact, a long list of well-known personalities (and organizations). ) that have been involved in one way or another with this project born in 2014 as a White Paper but that dates back to 2013 in its essential base.

So let’s start at the beginning: the zero knowledge protocol that is the basis of this cryptocurrency. This test goes back to the end of the last century, and it works so that each of the parties prove to another that a statement (mathematical) is true without revealing anything other than the veracity of that statement.

Based on this cryptographic method, in turn, Zerocoin was born in 2013, another cryptographic currency protocol created by Ian Miers, Christina Garman, Matthew Green, and Aviel D. Rubin, together. A project born among the best professionals at Johns Hopkins University in the United States, led precisely by Green, renowned cryptographer. The following year Zerocoin is further improved by the hand of Green himself, this time accompanied, as well as by Miers and Garman, by Eli Ben-Sasson, Alessandro Chiesa, Eran Tromer, and Madars Virza. On this occasion, the name given to the project is Zerocash.

Finally, this is the protocol that is implemented with some improvements in the Zcash cryptocurrency (ZEC), whose main offer is the total confidentiality of payments, while maintaining a decentralized network using a public blockchain. Despite this, in its chain of blocks, the sender, the receiver and the amount of the transaction are hidden automatically. Total privacy for your users, something they can not get in the original blockchain, whose transactions can actually be tracked.

PRIVACY VS. ANONYMITY

Certainly, it can not be said that this is the first cryptocurrency to take as an objective the increase of privacy in the blockchain. Famous cases have been Monero and Komodo, which in fact also uses the same Zerocash protocol, but accompanied by a new consensus method of Deferred Work Test (dPoW).

The Zerocash protocol uses the SNARK parameters, which allow the creation and destruction of digital signals for reliable use in financial transactions, ultimately without a trace. But not in all cases this method allows to completely hide every piece of information.

As stated in the page associated with Zcash, the word ‘privacy’ rather than ‘anonymity’ is preferred, since the former refers more to the protection of certain data, while the latter only refers to the “elimination of linked personal data”. to potentially public data. ” Each transaction made with this cryptocurrency, in addition to protecting its information cryptographically, is mixed with all the transactions carried out since the beginning of the blockchain, which ensures that tracking it is almost impossible.

However, Zcash warns that this functionality is not available for multi-sign accounts, correlations made with public transactions (for example, exchanges to another cryptocurrency), nor for hiding or modifying IP addresses. Although, in this case, it can be integrated with networks such as Tor, which ensures greater privacy.

MORE SECURITY

Although privacy is often mentioned with zeal, a feature highlighted in Zcash is also security for its users. Officially, it is explained that a blockchain that encrypts data and makes it private, and lacks evidence of zero knowledge, “also lacks the assurance that all transactions are valid.” Which means that the network nodes can not verify the encrypted data, therefore they can not know if the sender actually sent the money or committed fraud.

On the other hand, the Zcash protocol is able to read this encrypted data automatically and verify each transaction, without revealing anything other than its authenticity to the participants. Without a doubt, a notorious advantage over other block chains.

ASSIGNMENT AND BLOCKCHAIN

It is expected that 21 million ZEC will come into existence over time, as with Bitcoin. 90% is destined to the miners and 10% will be the so-called ‘Reward of the Founders’, aimed at creators, employees, advisers and the Zcash Foundation, non-profit, which is dedicated to improving the protocols of the system in interest of all users.

On the other hand, this cryptocurrency is based on its own blockchain, which in fact allows you to keep your transactions in the strictest privacy. However, it is possible that it will connect directly to other block chains such as Ethereum in the near future, as explained by Wilcox during DevCon2.

HOW TO GET ZCASH

For now it will only be possible to get this cryptocurrency in two ways: either by buying it or by mining it. As for exchange houses, it has been reported through social networks and official sites that the Chinese company Yunbi, the African BitMex, the American Bittrex, and the giants Bitfinex, Kraken and Poloniex have already prepared support for this new digital currency, even before its launch. Additionally, it will also be integrated into the ShapeShift platform, which allows instant conversion to other cryptocurrencies.

On the other hand, Zcash will also be added to the cross-platform portfolio Jaxx and its CEO, Anthony Di Iorio, confessed that its users expressed great interest in making this new alternative available as soon as it was launched. Interestingly, this announcement comes shortly after one of its biggest competitors, Monero, also announced its integration with Jaxx.

As far as mining is concerned, there are already several mining software available, both for mining ZEC with GPU and with CPU, and some tutorials on how to configure them. Also, several mining groups have enabled cryptocurrency on their platforms, such as CoinsForAll, CoinMine.pl and Zmine, among many others. Even cloud mining companies like Genesis Mining have already prepared the space and the tools so that their clients can dedicate themselves to mining Zcash.

MINING

The first thing to consider if you want to mine ZEC, is that in the first 20 thousand blocks, for at least 34 days, a slow-start mining will be carried out. This means that, during this time, the reward per block will begin at 0 ZEC and will gradually increase. This in order to minimize the impact in case of unexpected initial errors, to experiment with the potential value that this cryptocurrency can have and to avoid a ‘gold rush’ among the miners.

After this period, the reward for each block of 2MB will be 12.5 ZEC in an average time of 2.5 minutes. Then, every 4 years (or 840 thousand mine blocks) this reward will be reduced by half: from 12.5 it will go to 6.25 and so on until it reaches the limit. The developers hope that over a year the blockchain will grow up to 420 GB.

Until now, you can only mine through Linux and Windows with the Equihash algorithm, a type of memory-based Work Test (PoW) that allows a very efficient verification, which is undoubtedly suitable for Zcash. This means that the amount of mining depends on the amount of RAM available. In fact, for the process of creating transactions with zero knowledge test, at least 4 GB of RAM is required.

INVESTMENT

Zcash is able to verify a transaction without revealing anything other than its authenticity. Apparently, this idea has attracted very important personalities and groups, so in this sense it predicts an exponential growth, given its strong connections and political interests.

Among the most outstanding names of the project is, in the first place, that of its founder, Zooko Wilcox, who has 20 years of experience in decentralized systems and cryptography, known for his work in the decentralized warehouse Tahoe-LAFS and his participation in DigiCash , perhaps the first anonymous digital currency.

As consultants appear none other than Gavin Andresen, one of the leading developers of Bitcoin, and Vitalik Buterin, founder of Ethereum. Both, the highest representatives of the two cryptocurrencies with the highest capitalization in the market. At least so far.

Its investors include Adam Ludwin, CEO of distributed accounting technology company Chain, Erik Voorhees, CEO of ShapeShift, Barry Silbert, CEO of Digital Currency Group and Fred Ehrsam, Co-founder of Coinbase. But perhaps the most interesting is who has been in the background in the Zerocash protocol.

You can still see that in its original page its investors have been, among others, Amazon, the Israeli Ministry of Science and Technology and nothing less than DARPA, which recently revealed its interest in the blockchain for the militia.

Another point in its favor is the future price that has reached even before its launch: 0.340549 BTC ($ 230 approximately) by ZEC, which would make the second cryptocurrency with more value after Bitcoin.

THREATS

Despite all this glow, not everything is perfect for Zcash. And what is perhaps its greatest threat lies in its own parameters. In order to make a transaction as private as it is intended, SNARKs are generated through a process that also, like nuclear energy, produces ‘toxic waste’. This by-product, in theory, could be used to subvert the blockchain by creating as many false coins indistinguishable from the real ones as desired, which, in turn, could cause inflation strong enough to end the Zcash.

The security measure against this event is to divide the information of public parameters (and their waste) among several managers. So it is based on the confidence that they will safeguard this data. As long as only one of them is in charge of destroying its ‘toxic waste’ part, the chain of blocks will remain intact. However, it sounds dangerously like a treasure to be chased by hackers.

On the other hand, a factor that can act both against and in your favor has a lot to do with the DeepWeb markets. It is well known that DarkNet has been a great promoter of Bitcoin and also of Monero, two cryptocurrencies that, in principle, had as their main promise privacy in their transactions. Something, undoubtedly, appreciated by criminals. And while this can increase your price, it can also affect your reputation.

However, Zooko Wilcox has already thought that this is inevitable, because Zcash is just a tool and it will depend on each user the use that is given, although, beyond the illicit, there are legitimate reasons to want to keep data private , as the protection of intellectual property.

On the other hand, a factor that can act both against and in your favor has a lot to do with the DeepWeb markets. It is well known that DarkNet has been a great promoter of Bitcoin and also of Monero, two cryptocurrencies that, in principle, had as their main promise privacy in their transactions. Something, undoubtedly, appreciated by criminals. And while this can increase your price, it can also affect your reputation.

However, Zooko Wilcox has already thought that this is inevitable, because Zcash is just a tool and it will depend on each user the use that is given, although, beyond the illicit, there are legitimate reasons to want to keep data private , as the protection of intellectual property.

Either way, Zcash comes on stage as a strong competitor for cryptocurrencies like Monero, Komodo, ShadowCoin, Silk and ZCoin. Only in the next thing we will be able to know if in fact all of them are able to coexist and if, as it is foreseen now, Zcash will become not only the leader in privacy, but in one of the biggest of all the ecosystem.

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