Zcoin (Zerocoin/XZC) is a decentralized crypto coin that was created by enthusiasts from Johns Hopkins University as a fork of Bitcoin.Get Wallet
What is zcoin?
Zcoin (XZC) is an open-source cryptocurrency that was released in September of 2016. Originally using Zerocoin protocol to allow users privacy, Zcoin later switched to a protocol called Sigma that gives the opportunity for greater scalability, eliminating the need for reliable setup. With the Sigma feature, only the sender and receiver are able to determine the exchange of funds in any given transaction, as transaction history is not linked to the actual coins.
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Zcoin (Zerocoin/XZC) is a decentralized crypto coin that was created by enthusiasts from Johns Hopkins University as a fork of Bitcoin. The developers set themselves the task of creating a confidential financial digital asset for anonymous transactions. The basis of XZC is the Bitcoin blockchain, which was corrected by the developers making some changes to create a new PoW-based cryptocurrency using the Lyra2RE hash algorithm. Initially, Zcoin was positioned as an addition to Bitcoin but later the creators began to develop a separate, completely independent cryptocurrency. All operations on the network are encrypted in a unique, new way with full anonymity of digital money transfers. Zerocoin Electric Coin Company helped to implement this startup. Zcoin is a digital asset that provides financial independence for individuals.
Zcoin Key Characteristics
Zerocoin is an open-source, decentralized digital currency. To ensure the privacy and anonymity of transactions, the network uses the cryptographic protocol Zero-knowledge proof to allow users to conduct both closed and public transactions in which both the user data and amount of the transfer are encrypted. If the transaction is conducted on either the Bitcoin or Ethereum blockchains, its history always has a connection with a user's actual money. If this user's personal information (such as IP address) becomes available, anyone could track the location of their digital assets. This is impossible on the Zcoin network. The user's transaction history is not related to existing coins and only the two participants in a transaction can know about it. Zcoin also implements a unique concept in money transactions: coins are not transferred between users. The transfer amount is burned in the sender’s wallet, and a similar number of coins is generated in the recipient’s account.
Zerocoin uses three important components to solve blockchain decentralization problems:
- With Zcoin’s Sigma Technology, any user can “mint” a coin found on the public ledger into a private coin, breaking any transactional links and ensuring complete privacy.
- Zcoin has integrated Tor to hide user IP addresses. Dandelion++ further conceals an IP address when broadcasting a transaction on the network.
- MTP (Merkle Tree Proof) is Zcoin’s unique Proof-of-Work algorithm, with a focus on ASIC-resistance and egalitarian mining for all participants.
Sigma is a new Zcoin protocol that was activated on the mainnet in July 2019, making significant improvements in three areas: removal of trusted setup, reduction of proof size, and improvement of security level. This is very important, as it makes the network faster and more secure. Zerocoin developers believe that the main purpose of a blockchain should be to build systems that do not require trust. Sigma is based on the academic paper One-Out-Of-Many-Proofs: Or How to Leak a Secret and Spend a Coin. It replaces some parameters whose cryptographic constructions don’t require a trusted setup. Zcoin is also the developer of the Lelantus Privacy Protocol, enhancing the safety and functionality of Sigma.
Zcoin was the first cryptocurrency to implement Dandelion++ protocol. By adding a new, additional layer of privacy to Zcoin, the developers have made it harder for someone to link user's transactions to personal information such as IP addresses. Dandelion++ changes the spreading way of transactions across the network by making simple yet crucial changes to the previous patterns. Each transaction is initially sent to only one other node instead of being sent to all neighbors.. Then, the next node rolls a dice to decide if it should pass the transaction on to either just one or all of its neighbors. With this element of chance, the propagation pattern becomes unpredictable, making transaction tracking impossible. Dandelion++ provides “lightweight” networking with formal anonymity guarantees without relying on external services. Tor integration and Dandelion++ complement each other and can safely be used together.
Much like some other cryptocurrencies that use the coin generation protocol based on Proof of Work (PoW), Bitcoin suffers from the possibility of centralization. Zcoin differs from BTC, instead using the MTP (Merkle tree proof) algorithm - an improved version of the Equihash algorithm. MTP is a way of eliminating the discrepancy between single participants and mining rigs. The concept is simple: no device should have a significant advantage over another. Thanks to MTP, the verification process is faster and makes the network more resistant to attacks. It also allows light equipment, such as smartphones, to perform verifying of new blocks.
Zcoin Mining Algorithm
Zcoin encryption (hash) algorithm is Lyra2RE. In the Bitcoin blockchain, the history of all transactions is stored in a public registry and transaction info can be used to identify it. Zcoin utilizes a set of Lyra2RE functions to ensure the anonymity of all transactions on the network and make it more scalable. Lyra2RE uses a combination of different algorithms to provide a simple hashing interface, high-speed data processing, and data security, while allowing the ability to change basic settings. It also has additional attack resistance, and finally ensures low computing power and energy requirements. A total of 21 million XZC tokens will be issued. In the first four years, the reward for mining will be distributed as follows: 80% goes to miners and 20% goes to the founders. Then, after these four years, the reward is fully paid to the miners. Every subsequent four years, the reward amount will be reduced by two times.
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