Zcoin:
Defined in CryptoCurrency
Defined in CryptoCurrency
Zcoin (XZC) is an open-source privacy-focused cryptocurrency token that
launched in Sep 2016. To enable privacy, Zcoin uses zero-knowledge
proofs via the Zerocoin protocol.
Zerocoin is a cryptocurrency proposed
by Johns Hopkins University professor Matthew D. Green and graduate
students Ian Miers and Christina Garman as an extension to the Bitcoin
protocol that would add cryptographic anonymity to Bitcoin transactions.
With Zcoin’s Zerocoin feature, only the sender and receive would be
able to ascertain the exchange of funds in a given transaction, as no
transaction histories are linked to the actual coins. Zcoin operates a
multi-node model where mining nodes verify blockchain transactions and
Znodes store blockchain data.
Privacy-enhancing Technology, Zerocoin Protocol Zero-Knowledge Cryptographic Proofs.
In Bitcoin, all transactions are
broadcasted on a public ledger. Research has shown that external
information, such as publicly announced addresses, can be used to link
identities and organizations to transactions. The default reuse of
bitcoin addresses exacerbates this problem.
Bitcoin and preceding alternative cryptocurrencies attempted to
solve this problem through the use of transaction mixers or ring
signatures.
However, there are a number of drawbacks to these proposed
solutions. For one, a malicious or compromised member of a mixer and-or ring
signature can break privacy the transaction mixer.
Furthermore, the anonymity set is a key
metric to understanding how private a cryptocurrency is. The anonymity
set in formerly proposed solutions is limited by the size of the mixing
cycle and-or ring signature.
Each mixing cycle and-or ring signature is limited
by the number of transactions per cycle, which is transitively limited
by the the block size of the cryptocurrency.
Thus, the anonymity set in
previous attempts at privacy tends to only be a few hundred
transactions.
With Zcoin, the anonymity set is on a dramatically higher magnitude.
Instead of having an anonymity set limited to the few dozen, Zcoin has
an anonymity set that encompasses all minted coins in a particular RSA
accumulator that can scale to many thousands and unlike other solutions
is not subject to transaction graph analysis.