Zcoin is an open-source digital cryptocurrency that implements a secure protocol providing financial anonymity to the members of its community. The platform uses Proof-of-Work consensus and the Lyra2z hashing algorithm. In addition to that, one of the main benefits of the system is its Zero-Knowledge proofs that are able to show ownership of a Zcoin not revealing which coin every given user has in possession.
Zcoin puts financial privacy at the forefront making transactions entirely untraceable. Though the real identities of the individuals behind transactions are hidden in the Bitcoin system, it is still possible to identify users by analyzing transactions on the blockchain. Zcoin removes the possibility of linking bitcoin addresses to web entities and enables fully anonymous currency transactions by implementing a cryptographic extension to Bitcoin.
The project was launched by a Bangkok-based company on September 29, 2016. In 2018, Zcoin helped to arrange the Thai Democrat Party's elections, which were held on its blockchain with over 127,000 votes cast nationwide. Starting from 2019, Zcoin is accepted at any of the 5 million merchants registered via Thailand's nationwide QR code system through the Satang App.
Striving to increase individual liberty, the project helps to ensure freedom of commerce by guaranteeing financial privacy. The mission of the team is to create the highest level of anonymity. One doesn’t have to trust the third parties in mixing transaction when using Zcoin .
The founder of the project considers that BTC holders can face a serious privacy problem as governments and law enforcement agencies have made substantial strides in using metadata and pattern analysis to find out the real-world identities of Bitcoin holders. In fact, Bitcoin is considerably limited in terms of privacy as BTC transaction logs are entirely public, this is why the Zcoin team developed a cryptocurrency solving the problem. The technology doesn’t change the security model of Bitcoin but integrates cryptographic construction to the core code.
How Zcoin works
In order to mint a new coin, a user burns it with the further generation of a mathematical proof that it was burnt. Using the proof, the person is able to redeem a new coin while the previous transaction history becomes clean. The main point is that the proof doesn’t contain data of the minted coin, therefore it’s impossible to establish a link between the coin that was minted and a new coin that was redeemed. Consequently, there’s no information for analysis and a person can feel protected.
Zerocoin protocol is considered to be one of the most groundbreaking academic developments in Bitcoin research. Initially, it was developed to be an extension of Bitcoin, but when it wasn’t adopted by the community it was released as a separate coin and a separate blockchain. It is attractive for users who value privacy as it enables expenditures without referring to their identity or transaction history.
The idea for the Zerocoin protocol was introduced by professor Matthew Daniel Green from Johns Hopkins University who developed it together with his two graduate students: Ian Miers and Christina Garman. After the proposed improvement couldn’t gain consensus, Poramin Insom released a blockchain using this idea. Actually, it functions just like Bitcoin but applies the minting procedure before the assets are spent.
Then the Sigma protocol was released in July 2019 to be used instead of the Zerocoin protocol. It removed the necessity of a trusted setup. This was the last thing that caused controversy as far as security was concerned. Previously, the users had to believe that the setup was done properly to trust it. So a new protocol improved security and provided a unique advantage to the coin.
The work over protocol is still going on at the time of writing. This protocol is only a precursor of the next generation privacy protocol called Lelantus. Zcoin cryptographer Aram Jivanyan is developing it to improve the functionality of the current protocol. The next version will remove the need for fixed denominations in minting and spending.
Zcoin became the first coin to implement Merkle Tree Proofs on its network for egalitarian mining, as well as the Dandelion protocol which protects user identities by preventing their IP addresses from being tied to a transaction. Tech-savvy users are able to earn the bounties on the platform given for various tasks, such as Zcoin core development, web development, graphic design, marketing, etc.
Zcoin is an ERC20 coin that was released in October 2016. Being based on Bitcoin, Zcoin initially planned to create 21 million coins. But the bug in the code brought to the creation of additional 388,450 coins. After its fixing, the max supply was established at 21.4 million XZC.
XZC is traded on such exchanges as AEX, Binance, Bittrex, Cryptopia, Upbit, CoinEx, MXC, Huobi Global, DigiFinex, CHAOEX, and others. The coin doesn’t have an official desktop GUI wallet, but Electrum Light Wallet can be used to keep it. Also, Coinomi, Cobo Wallet, Trust Wallet or some other mobile wallets can be used.
The founder of the project is Poramin Insom who worked under the guidance of Matthew Green (the author of the idea the platform is based on) at Johns Hopkins University. Previously, Poramin worked over Vertcoin but seeing the demand for anonymous crypto transactions he switched to Zcoin. Though he is fully concentrated on work over Zcoin, he still plans to return to Vertcoin in the future.
The lead developer of the team is Peter Shugalev who has a Master Degree in Computer Science and Mathematics from Moscow State University. He is an author of the programming language used in a signature-based intrusion detection systems.
The COO of the company Reuben Yap has shaped the vision and direction of the project. He had been working as a corporate lawyer for 10 years before he joined the team in 2016. He is responsible for business processes in Zcoin. Being a proponent of privacy, he also established a VPN service that is very popular in Southeast Asia.