Zcash: the first truly anonymous cryptocurrency


    Zcash official client works only under Linux

    On October 28, 2016, Zcach CEO Zuko Wilcox (Zooko Wilcox-O'Hearn) conducted an official " cryptographic ceremony " of launching a new cryptocurrency Zcash - the world's first cryptographic currency based on an interactive zero-knowledge proof cryptographic protocol (proof with zero disclosure). The principle of operation of such a protocol assumes that one of the interacting parties is able to verify the validity of the mathematical statement, while not having any other information from the second side. Zcash is essentially the first truly anonymous currency. Technical description of the protocolcould well be the topic of a master's thesis on cryptography.

    To date, a list of alternative digital currencies has 710 pieces . Of these, 372 currencies are traded on the open market. 86 currencies have a market capitalization of over a million dollars. 24 currencies exceed $ 10 million. Those who watch the market have long been skeptical about the news about the launch of new alternative currencies. For example, a year ago, a new wonderful PayCoin cryptocurrency trumped on all channels with a “guaranteed” support level of $ 20. Now it is in the rating at 268th place, trading at the rate of $ 0.002816, and the market capitalization is $ 32,689.

    Against this background, the launch of a new cryptocurrency will cause the most natural reaction: “What, another one? How can?".

    It would seem that the traditional scheme of enrichment and divorce of investors?

    There would be no subject for conversation here, if not for a few nuances. First, it is the credibility of the developers - well-known technical experts. Secondly, the support of quite serious investors. The third is math. The mathematical foundations of zero-value proofs make Zcash an interesting phenomenon irrespective of the prospects for this currency as an investment item. It is interesting purely from the technical side.

    Like Bitcoin, Zcash works on the blockchain, a standard chain of transactions that the peer-to-peer network of computers around the world calculates. From an infrastructure point of view, there is no particular innovation. The main feature of Zcash is mathematically guaranteed anonymity. Complete anonymity, in contrast to the rather transparent Bitcoin, where the movement of money through wallets is monitored with absolute accuracy.

    How does zero non-disclosure work? Perhaps, in the most simplified way, this mathematical concept was formulated by cryptographer Jacques-Jacques Quisquere in the article “ How to explain the evidence protocol with zero disclosure to your children, ” published in 1989:

    Zero Disclosure Cave
    In this case, Peggy serves as the Proving Claim, and Victor as the Checker. Peggy knows the magic word (“key”), the entry of which allows you to open the door between C and D. Victor wants to find out if Peggy really knows the password, and Peggy does not want to give the password himself. The cave has a round shape, as shown in the figure. To solve the problem, they proceed in the following way. While Victor is at point A, Peggy goes to the door, and after she disappears from view, Victor goes to a fork, that is, point B, and shouts from where: “Peggy needs to go to the right” or “Peggy needs to go to the left” . We get every time the probability that Peggy does not know the password is 50%. If you repeat the process k times, then the probability will be 1/2 k. With 20 repetitions, this probability will be of the order of 10 −6 , which is sufficient for the validity of the assumption that Peggy knows the key.

    Strictly speaking, a zero-disclosure proof is a probabilistic proof, not a deterministic one. It must have three properties: completeness, correctness and zero disclosure. The last property implies that any Inspector learns nothing from the proof except the fact that the statement is true.

    In the Zcash system, the software produces a series of random values ​​that are taken as input parameters. It also generates fragments of a cryptographic key, which together can be used to generate new Zcash coins. Actually, at the ceremony on October 28, it was just demonstrated how the creation and distribution of these fragments of a cryptographic key takes place so that the key itself is never fully embodied in reality.

    Zcash transactionsdo not leave traces in the chain of transactions about which purse money is written off, which purse they are credited to, and what is the amount of the transfer. Only the fact that the transaction is completed is visible. The blockchain is hidden information about the parties to the transaction, if they so wish (the parties can open information about themselves). This is a truly unique feature of Zcash.

    So that miners could support a chain of transactions in such conditions, a proof protocol with zero disclosure is used. It allows users to confirm that they have coins without giving information about where the coins came from and where they will be transferred. For information transfer in the protocol, constructions called zk-SNARK are used .

    Some experts believe that mathematically guaranteed anonymity is the main advantage of Zcash over all other cryptocurrencies. There is an opinion that in the present conditions of attempts at harsh state control over citizens in different countries, it is precisely such a currency that will be in demand by society.

    Bitcoin was also initially called anonymous cryptocurrency. But in reality this is only a theoretical pseudo-anonymity, which requires the user to observe the utmost care not to reveal confidential information about himself. All transactions and purse numbers remain forever in history, and the path of each coin can be traced. Special intelligence services like Chainalysis are already running ., which provide customers with such payment tracking services, identifying the real identities of Bitcoin users.

    Fundamental Zcash was developed in 2013 by Matthew Green - Head of the Department of Applied Cryptography at Johns Hopkins University. Cryptographers Eli Ben-Sasson from the Israel Institute of Technology, as well as a group of researchers from the Massachusetts Institute of Technology and the University of Tel Aviv took part in the development later . All of them are now employed in the company Zcash, which lists 10% of new coins from miners.

    It seems that the developers of Zcash have set tasks to make the cryptocurrency the way Bitcoin should have been from the very beginning. With anonymity and privacy in the heart. Let's see the extent to which their plans are implemented. At the very least, Zcash looks like an ideal currency for underground markets - and the main contender for a legislative ban in countries where government regulation of the Internet is practiced.

    On October 28, the first version of Sprout software was released for the operation of the Zcash node and coin mining ( for Linux only ). The source code is published on Github . For the Zcash node to work, the computer must have at least 4 GB of RAM.


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