Zcoin: Defined in CryptoCurrency

Zcoin:
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. 

Furthermore, the same type of mechanism used to break privacy in social networks, such as the analysis of social network topology, can be used to break privacy in the Bitcoin network.

 

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.