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Zcash, The 'HTTPS For Money,' Brings True Privacy To Money Transactions

Zcash, the successor to Zerocoin (originally created by cryptography professor Matthew Green and his students), is now complete after being in development for two years. The protocol promises to be the most anonymous cryptocurrency on the market due to a recent breakthrough in privacy technologies called “zero knowledge proofs.”

Bitcoin’s Main Flaw

Bitcoin is currently by far the most used cryptocurrency, worth over $10 billion in market capitalization and about $200 million being transacted every day (in Bitcoin). However, Bitcoin has one major flaw: Its transactions are transparent to everyone, so everyone--not just governments--can track payments made by anyone else.

Users pay with wallet “addresses” (cryptographic hashes), which are pseudonymous because they're just random strings of characters. However, those addresses can be tracked to real names, especially when users pay through middle-men services such as BitPay or Coinbase that are required by law to ask for users’ personal information when signing up for an account.

Some people can use Tor to hide their real identities when paying with Bitcoin from their real wallets, but it’s easy to make mistakes and reveal your identity when browsing the web. Plus, the Tor browser itself can have vulnerabilities, which can sometimes allow governments to track users.

Zcash's Privacy Promise

There are multiple entities out there trying to solve the anonymity problem of Bitcoin, most of which involve "mixing services." With this solution, money is first sent to a centralized pool, and after some time you can retrieve different coins with the same total value from the pool. The level of privacy offered by this solution is given by how many people send their money to any given pool. The users also have to hope that the pool owners won’t just run away with their money.

Zcash uses advanced cryptographic techniques called  “zero knowledge proofs” (zk-SNARKs) to ensure that only the payment itself is transparent, but the sender, recipient, and amount of a transaction remain private.

"This is the first protocol of its kind," said Zooko Wilcox, the CEO of the company and a well known security expert, in a blog post."It is the product of years of scientific research, advanced engineering, and diligent security work. Zcash is a group of scientists and hackers who came up with a way to combine blockchains for immutability with encryption for data security. These two things are separately well understood, important, and widely used, but they’ve never been put together before now.""We encourage the Zcash community to experiment with us, and to mine, run a node, and join the growing and friendly community. Zcash is a consensual currency, a community network, and developer-supported cryptocurrency; your active participation makes the network stronger,” added Wilcox.

The team also said that if Bitcoin, whose transactions are transparent to all, is like HTTP, then Zcash is like HTTPS. The analogy is quite apt considering HTTPS encrypts traffic so that no one can see what is being sent, by spying on the network. In the same way, nobody can see what the transactions represent in the Zcash network, nor who made them or received them.

The Zcash blockchain is now live, and people can mine Zcash or make transactions with it. The official client can be downloaded from the company’s website (beware of fake clients from other parties).

  • bit_user
    I had a similar idea as this. Of course, the real value is in a design that properly addresses all the details.

    The users also have to hope that the pool owners won’t just run away with their money.
    That's a pretty big downside.

    beware of fake clients from other parties
    Not really a problem, with bitcoin. I guess it could be an issue, but bitcoin's transparency probably makes this less tempting.
    Reply
  • TaoOfSatoshi
    Wow, Zcash sure is getting a lot of hype these days! But is all the hype worth it, or are there other, more worthy alternatives in the digital currency space?

    Amanda B. Johnson of Dash: Detailed investigates:
    https://youtu.be/591J9KcKgHM

    Invite to Dash Nation Slack: http://dash-nation-invite.herokuapp.com.
    Reply
  • Kimonajane
    You think the fascist FED and their overlords in the privately owned Federal reserve will let this get big, not a chance.
    Reply
  • bit_user
    18796546 said:
    You think ... will let this get big, not a chance.
    Hey, we actually agree on something!

    I believe Bitcoin & other block-chain alternatives were only allowed because they actually made it easier for government agencies to track financial transactions. Anything that's truly private and anonymous will be banned, if it starts to catch on.
    Reply
  • Christopher1
    Well I am waiting for the first post that says "If you have nothing to hide you have no reason to use this!"
    Actually in the real world yes even regular people do have a reason to use these services: The Fed has been getting very very very nosy lately and trying to monitor ALL transactions.
    You also have various credit card companies refusing to process payments to legal but controversial services today.
    Reply
  • bit_user
    18802569 said:
    Actually in the real world yes even regular people do have a reason to use these services: The Fed has been getting very very very nosy lately
    It doesn't even matter if they're nosy. The fact is that when there's no transparency, there's unlimited potential for abuse. We need legislation or a constitutional amendment requiring a rigorous auditing framework, in order to ensure that 4th amendment rights aren't violated.

    18802569 said:
    You also have various credit card companies
    When talking about the private sector, there's currently no equivalent to the 4th amendment. This is the other thing we need.

    We won't get either, but those the only conditions under which I would be willing to consider any attempts to abridge my use of encryption.
    Reply
  • Christopher1
    18802596 said:
    When talking about the private sector, there's currently no equivalent to the 4th amendment.

    BZZT! WRONG! Read the papers of John Adams, George Washington and the other founders. The Fourth Amendment was supposed to ALSO apply to infringement on the Fourth Amendment by PRIVATE organizations.

    Many people have this mistaken impression that the Bill of Rights was solely meant to constrain the federal government. It was not. It was supposed to be used also against private organizations and individual to protect human and Constitutional rights.
    Reply
  • bit_user
    18802723 said:
    Many people have this mistaken impression that the Bill of Rights was solely meant to constrain the federal government. It was not. It was supposed to be used also against private organizations and individual to protect human and Constitutional rights.
    Well, that's not the traditional legal interpretation. If you want to challenge it by brining a case to the US Supreme Court, I'll chip in a few $.
    Reply
  • MaxxBit
    Zcash cloud mining contracts are available on Genesis Mining again! The initial Zcash Genesis block contracts are sold out and already mining. Reserve your contract for the next mining start at December 1st. 2016.
    BTC, ETH and other cryptocurrency are available also. Coins arrive directly to a wallet daily. Use promo code GzNuFE to get hashpower discount.
    Reply
  • MaxxBit
    Zcash cloud mining contracts are available on Genesis Mining again! The initial Zcash Genesis block contracts are sold out and already mining. Reserve your contract for the next mining start at December 1st. 2016.
    BTC, ETH and other cryptocurrency are available also. Coins arrive directly to a wallet daily. Use promo code GzNuFE to get hashpower discount.
    Reply