Zcoin before it have aimed to improve

Zcoin is a decentralized, open source cryptocurrency, first launched in September 2016, whose mission is to increase individual liberty by guaranteeing financial privacy and freedom of commerce. Zcoin is based on the Zerocoin protocol – originally created in 2013 as an extension to run on top of Bitcoin, it uses ‘zero-knowledge cryptographic proofs’ to obfuscate both the sender and receiver’s transaction data. Zcoin, however, also claims to have solved one of the lingering problems of other zero-knowledge coins – that of the ‘trusted setup’, by their employment of what they call the ‘Sigma protocol’. HistoryZcoin is the first fully functional implementation of Zerocoin, a cryptocurrency that was first proposed by Matthew D. Green, a professor at the Johns Hopkins University, along with two graduate students – Ian Miers and Christina Garman. It was initially conceived as an extension to the Bitcoin protocol that would add true cryptographic anonymity to Bitcoin transactions. The testnet software was publicly released on December 19, 2015, with the name, Moneta, before being changed to Zcoin for its official release on September 28, 2016, by Poramin Insom.FeaturesZcoin is a proof-of-work cryptocurrency that uses the same mining method and halving cycle as Bitcoin (4 years) but a different hashing algorithm – Lyra2.Zcoin’s greatest achievements have been in the area of anonymity and privacy. Bitcoin and other altcoins before it have aimed to improve the anonymity of their transactions by using transaction mixers or ring signatures. These are methods that either mix transactions with others to hide their origins and destinations or, in the case of a ring signature, require the endorsed digital signature of someone in a selected user group. The problem with these methods is that their score is very low on the traceability set – a measure of a cryptocoins privacy. This is because of certain inherent limitations due to the number of transactions per cycle and the block size. So while they demonstrate a traceability set rating in the hundreds, Zcoin has managed to increase this to the order of many thousands, thanks to their system of zero-knowledge cryptographic proofs. This is basically a method by which one user proves to another user that a given statement is true, without communicating any other information whatsoever, other than the fact that it is true or not.The other problem that is solved by this system is due to the inability to perform a topological analysis of the transaction history. There are multiple research papers that demonstrate how a topological analysis can identify the owners of supposedly anonymous wallets by comparing a separate network like Facebook with the transaction history of a cryptocurrency’s blockchain. With Zcoin, this chain of transactional history simply does not exist. There is literally nothing that can be analyzed.Zcoin seems to have even taken a step further than this in their drive towards perfect privacy. Although zero-knowledge setups provide a great deal of anonymity, they still suffer from an ‘Achilles’ Heel’ in the form of a ‘trusted setup’. This basically means that at some point, someone needs to be trusted to generate the initial parameters before destroying them. This is like making a lock and then having to trust one person to destroy the only key to it. The lingering question is: how can one be sure that they have not made a copy or perhaps not even thrown the key away? In order to remedy this situation, Zcoin has come up with the Sigma protocol which does away with the need for a trusted setup in the first place.Zcoin is no doubt pushing the boundaries in securing the privacy and anonymity of its users, however, the question still remains as to whether privacy can ever be ‘perfected’ or merely held at bay through constant effort and innovation.

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