Since the invention and successful implementation of Bitcoin, the original cryptocurrency that promised anonymous transactions, there have been efforts to seal privacy loopholes found in the Bitcoin system.
The rationale for Zerocoin was invented in 2013, but Poramin Insom and Gary Le managed to implement it as a fully operational cryptocurrency recently.
What is Zcoin?
Zcoin is not Zcash – it’s completely different, see article on this page: https://bitcointalk.org/index.php?topic=1638450.msg16708076
Zcoin is a cryptocurrency that utilizes a sophisticated and advanced protocol that manages to conceal sender and recipient data during transactions. It addresses the security risk posed by Bitcoin.
The Zcoin software was initially named Moneta and was availed to the public on 18th December 2015. Later, the name Zcoin was coined, and it replaced Moneta as the official name of the project. The functional Zcoin cryptocurrency was launched on 28th September 2016.
Why the Zcoin Cryptocurrency?
With Bitcoin, anyone with enough incentive can manage to get details of transactions such as user addresses. Such data can be obtained through data mining of the Bitcoin blockchain.
In specific transactions, it is possible to link a transaction to public addresses belonging to an individual which poses a security threat. It is because of this that the Zcoin cryptocurrency was invented to make transactions more anonymous.
How it works
The workings of Zcoin are a bit technical, but the gist of it is that it involves two independent cryptographic transaction phases: The Zerocoin mint phase and Zerocoin spend phase.
The Zcoin network allows an individual to mint’ coins and then spend them. The separation of the mint and spend processes ensures that any minted coin cannot be easily associated with its expenditure.
What is great about Zcoin?
Essentially, the Zcoin network allows one to create and spend coins with anonymity using the zero-knowledge-proofs.’ The zero-knowledge-proof enables an individual to prove that a statement is genuine, without leaking any other information other than that the statement in question is valid.
If someone receives Zerocoin, the only information available to that person is that indeed an x amount of Zcoin was deposited into their wallet. The Zcoin process eliminates transactional history.
How is Zcoin Used?
Anyone who desires financial anonymity can use it to pay for goods or services though knowledge on how to use Bitcoin is first required for those unfamiliar with cryptocurrencies. Zcoin can also be used in conjunction with Bitcoin to secure an individual’s Bitcoins.
How much of Zcoin is currently available?
For up to date information on number of coins, market cap, and other pertinent information about Zcoin see:
Downsides of Zcoin
The primary concern with Zcoin has been that transactions require more time, memory, and computing power to process compared to Bitcoin. In practice, however, the increased computing resources needed to actualize transactions has not been sufficient to warrant any worry since proofs can be kept outside of the network’s blockchain.
Zcoin is yet to take up in earnest, but it is slowly gaining steam. The Zcoin team is working to make it one of the best avenues for people seeking complete anonymity in making financial transactions. Time will certainly tell whether or not the development team will reach this goal in the ever changing world of cryptocurrency.
written by: stroebel