You may have heard that Bitcoin transactions are not fully anonymous; with certain tech skills, a capable person or an organization could trace the money going from one end to the other.
Most people don’t mind that pseudo anonymity, but some do… and so other, more private cryptocurrencies were born. Today, we are talking about one such token, Zcoin, which is also known as Zerocoin, and marked as XZC.
But before we go into details let me add that Zcoin has nothing to do with Zcash, which uses its own Zerocash protocol to accomplish the same thing – provide users with privacy and anonymity.
With that out of the way, let’s proceed…
1. How does Zcoin achieves privacy and anonymity for its users?
Zcoin does its magic by using zero-knowledge proofs via the Zerocoin protocol, which also happens to be one of the most cited cryptography papers out there.
According to Wikipedia, zero-knowledge proof or zero-knowledge protocol is a “method by which one party (the prover) can prove to another party (the verifier) that a given statement is true, without conveying any information apart from the fact that the statement is indeed true.”
For instance, when making bitcoin and ether transactions, your transaction history is always linked to your coins and your current IP address. Even with VPN services, authorities could be able to find out who’s sending money to whom.
In contrast, if you’re sending money with Zcoin’s Zerocoin feature, none of your transaction histories is linked to the actual coins and only the receiver and sender know you have actually exchange funds.
You can see how Zcoin works from the following video:
2. How many Zcoins are out there?
Like Bitcoin, Zcoin also has a strict monetary policy; meaning there won’t be a unlimited supply of these tokens. Also like Bitcoin, Zcoin was supposed to be capped at 21 million coins, but the total supply has increased by 388,450 XZC units after the Zcoin’s code bug, which the team has not rolled back due to economic reasons — hence the total supply stands at around 21.4 million.
At the moment of this writing, there were around 3.8 million Zcoins in circulation and the rest is yet to be mined.
Every 10 minutes, a new Zcoin block is mined, and 50 coins are generated, making it for 72,000 Zcoins per day.
3. Everyone can mine Zcoin
The Zcoin platform was the first cryptocurrency to implement a better proof of work algorithm called MTP (Merkle Tree Proof), which makes it possible for general masses to mine Zcoin with GPUs and CPUs. MTP doesn’t allow for ASIC miners which are used for Bitcoin mining.
The MTP algorithm was devised by Alex Biryukov and Dmitry Khovratovich from the University of Luxembourg in their paper published on the June 11, 2016 entitled “Egalitarian Computing.” These are the same researchers who came up with Equihash that is currently used in many other cryptocurrencies, and that could be one of the reason why some people are confusing the two tokens (Zcoin and Zcash).
4. Serious team
Zerocoin as a cryptocurrency was not invented by some tech-savvy individual looking for a new career or an easy way to make a few bucks; rather, it was 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 true cryptographic anonymity to Bitcoin transactions.
In September 2016, Zerocoin was first implemented into a fully functional cryptocurrency released to the public as Zcoin by the lead developer known as Poramin Insom.
The whole team comprises of other developers, community managers, support personnel and advisors who maintain the required balance.
As I’m writing this, Zcoin is implementing the so called “Znodes” to make their cryptocurrency more decentralized and anonymous. These Znodes would be like masternodes and will facilitate anonymous transactions because making an anonymous transaction single-handedly is quite computational.
As part of the plans to incentivize people to setup Znodes, they will be reducing some portion of founder’s reward… You can learn more about Znodes from here.
6. Buying and storing
Zcoin is available from a number of exchanges, including Bittrex, Cryptopia, CoinExchange, and LiteBit.eu. In most cases, you will have to use Bitcoin to get XCZ units, though.
As for the supported wallets, they include Coinomi mobile app (Android), and Zcoin’s official GUI Wallet (Windows, Linux, Mac).
There is obviously a lot of work to be done, but if we can learn something from the Zcoin’s price that would be that these guys are onto something. In March 2017, a unit of Zcoin was worth $2 and as of the end of 2017, it is trading at around $130. That’s one hell of a growth, when you think about it.