Anonymous cryptocurrencies: why Edward Snowden supports the concept of evidence with zero disclosure
Translated - Maria Ageeva, Binary District
On February 6, at the Zero knowledge proof protocols blockchain rally, ZCash CEO Zuko Wilcox and Ergo Platform founder Alexander Chepurnoy will discuss the basic principles of the zero-disclosure protocol, as well as the specifics of ZCash, Bitcoin, Ethereum and other cryptocurrencies.
The problem of the lack of confidentiality of transaction data is relevant for the vast majority of public blockchains; measures to solve it are proposed by the creators of anonymous cryptocurrencies.
Bitcoin, Ripple, Ethereum, Bitcoin Cash and Litecoin are the 5 largest in terms of market value and cryptocurrency capitalization. Each of them is potentially vulnerable to a number of attacks, which increases their attractiveness to scammers. Using blockchain explorer, you can easily track the origin and purpose of transactions, amounts, hashes, etc.
Riccardo Spagni, chief developer of Monero, the first multi-billion dollar cryptocurrency exchange, emphasized the importance of transaction confidentiality measures.
He is convinced that the guarantee of the security of personal data is important for all cryptocurrency users, and not only for those who, for whatever reason, often related to criminal activities, are forced to act with extreme caution.
“Lack of measures to protect transaction information can have some consequences - from targeted advertising that pursues you, which is fed by information about your consumer habits, to a threat to your life and health. I paid with bitcoins - and now the seller already knows the amount of funds available in your account, or even worse - they begin to threaten you with a knife, ”Spagni shared.
On December 28th, one of FluffyPony's fears was confirmed. According to the BBC, Pavel Lerner, chief executive officer of the Exmo cryptocurrency exchange, was attacked in Kiev. “Men in Balaclavas” threatened Lerner with a knife, and then forcibly put him in a black Mercedes Benz. There is an assumption that the kidnappers intended through Lerner to gain access to large amounts of funds in cryptocurrencies on the exchange.
Exmo spokesman Anatoly Larin noted that the user’s funds remained safe, as Lerner's job responsibilities do not imply that he has access to them: “Despite this incident, the exchange is operating normally. Pavel’s activity in our company does not include work with storages or personal data of users. All customer funds are completely safe. ”
Anonymous cryptocurrencies: Zcash, Dash, Monero, Verge
Zcash is the first cryptocurrency developed on the basis of the zero knowledge proof protocol. This protocol potentially allows you to process confidential and anonymous transactions in cryptocurrencies of any blockchain network.
Monero cryptocurrency gained fame thanks to the activity of the developer community and the proposed technological solution, which is quite interesting. But despite this, cryptocurrency could not be popular with a wide range of consumers due to the incomplete wallet interface and a number of other functional difficulties. Last year, Jaxx representatives canceled Monero integration for technical reasons.
Anthony Di Iorio, the founder and president of Jaxx, said that until technical problems that hinder Monero’s integration were resolved, Monero won’t be able to compete with currencies like Dash and Zcash, even though it’s quite progressive. technology.
“We discussed the issue of Monero integration for over a year. For several months, we studied Monero in detail, developed integration scenarios, ”said Di Iorio. - We also identified critical shortcomings of the cryptocurrency, which can significantly complicate its further development. Until these shortcomings are eliminated, you should not count on the wider use of cryptocurrency. ”
High hopes for ensuring the security and confidentiality of transactions are assigned precisely to Zcash. Anonymity of transactions is achieved by hiding confidential information, for example, transaction entry and exit points, as well as data about the sender and receiver.
Blockchains using the zk-SNARK protocol that underlies the cryptocurrency can immediately start anonymous transactions. Several projects with multi-billion capitalization, in particular, Ethereum, have already begun active study and implementation of the protocol.
In July, Christian Reitwiessner, head of the Ethereum Solidity and C ++ implementation development team, said that the first anonymous transaction Zcash was registered on the Ethereum test network.
Zcash transaction in EtherScan. As you can see, there is no information about the entry point and exit point, as well as the data of the sender and receiver.
“For authentication, only one component of the real transaction occurring on the Zcash network is used - the zk-SNARK protocol. Apparently, the transaction was carried out in January. I don’t know who created the transaction, how much was sent, but the Ethereum network “knows” that the transaction is reliable, ”said Reitweisner.
On October 16, through the Byzantium hard fork, the zk-SNARK protocol was successfully integrated into the Ethereum network. Over the course of a week, several developers, members of the Ethereum open community, worked on a confidential transaction on the Ethereum test network, and it was found that the anonymous transactions could be carried out on the Ethereum network for up to $ 72 billion.
Why does Snowden support the concept of evidence with zero disclosure
Former National Security Agency employee Edward Snowden explained that integrating Zcash into the Ethereum network will benefit both network users and the development of decentralized applications.
Agreeing with Ethereum creator Vitalik Buterin, Snowden suggested that “behind zero-disclosure evidence is the future of safe trading.” He added: “Zcash's privacy protection technology makes this currency the most interesting alternative to bitcoin. Bitcoin is good, but does not guarantee anonymity, and therefore is not safe. ”
Snowden reacted to critical reviews about the trusted setup system used in Zcash, according to which 6 people were to take part in the installation procedure. One of them, by the way, was Peter Todd, the developer of Bitcoin Core. Each of the 6 participants had to delete their part of the Zcash secret cryptographic key, otherwise the network could not be activated.
“The procedure is designed in such a way that the chances of compromising each of its participants (which is the only way to harm the system) tend to zero. At the same time, the appearance of a hidden flaw in modern cryptography seems to be a much more possible option, ”said Snowden.