Greetings Steemians! I haven't posted a mining update in awhile so I thought it would be a good idea to summarize the latest coin I'm mining, XZC, also known as ZCoin. What is ZCoin? ZCoin is the first cryptocurrency utilizing zero knowledge proofs via the Zerocoin protocol for anonymous transactions of cryptocurrency. Oct 20, 2017 - On October 18th, 2017, ZCoin had a market cap at USD $36,461,822 for an equivalent of 6,457 BTC with a circulating supply of 3,239,208 XZC at a price of $11.26 per coin. Having a great day, ZCoin is in the green and up 13.04%. Today, ZCoin hits the lists at cryptocurrency #109 by market cap.

On October 18th, 2017, ZCoin had a market cap at USD $36,461,822 for an equivalent of 6,457 BTC with a circulating supply of 3,239,208 XZC at a price of $11.26 per coin. Having a great day, ZCoin is in the green and up 13.04%. Today, ZCoin hits the lists at cryptocurrency #109 by market cap. I have a feeling, though, that Zero is a hero and will be rising to the Top 100 list. Who knows top 50 seems possible. With recently adopting ZeroCoin protocols, I’m excited to dig into ZCoin specifically.

Is there a reason why PIVX chose ZCoin over “the other guy?” Let’s dig into the content, gather data, and explore ZeroCoin together! ZCoin: Private financial transactions, enabled by the Zerocoin Protocol • Zerocoin is a cryptographic extension to Bitcoin that augments the protocol to allow for fully anonymous currency transactions. • The Zerocoin Protocol, created in 2013, was originally meant to be an extension on top of Bitcoin. There was a lot of support for Zerocoin from key members of the Bitcoin community. However, Bitcoin has the primary goal of ensuring stability in its money supply, by moving slowly with only unanimously agreed upon changes. As a result of the political deadlock, the Zcoin project was created.

• “Our system uses standard cryptographic assumptions and does not introduce new trusted parties or otherwise change the security model of Bitcoin.” • “We are not the first to propose e-cash techniques for solving Bitcoin’s privacy problems. However, a common problem with many e-cash protocols is that they rely fundamentally on a trusted currency issuer or bank, who creates electronic coins using a blind signature scheme.” • Zerocoin allows individual Bitcoin clients to generate their own coins. • Zerocoin is a distributed e-cash scheme that provides strong user anonymity and coin security under the assumption that there is a distributed, online, append-only transaction store. • “We use Bitcoin to provide such a store and the backing currency for our scheme.” • With Zcoin’s Zerocoin Technology, you can “mint” a coin found on the public ledger into a private coin. • When it is time to spend your minted coin, the owner of the minted coin does not need to be revealed.

• The process of minting and spending a coin can be completed as many times as you want, ensuring complete privacy. • Although Zerocash is a development from Zerocoin, their respective implementations are not simple forks of each other, but rely on different cryptographic assumptions with various tradeoffs. Both approaches supplement each other quite nicely, and a good way to describe them would be sibling projects. • “Our protocols use zero-knowledge proofs that can be instantiated using the technique of Schnorr. • We convert these into non-interactive proofs by applying the Fiat-Shamir heuristic.

• In the latter case, we refer to the resulting non-interactive proofs as signatures of knowledge. • When referring to these proofs we will use the notation of Camenisch and Stadler.” • Accumulators: “Our construction uses an accumulator based on the Strong RSA assumption. The accumulator we use was first proposed by Benaloh and de Mare and later improved by Baric and Pfitzmann and Camenisch and Lysyanskaya.” • “Our scheme is secure assuming the hardness of the Strong RSA and Discrete Logarithm assumptions, and the existence of a zero-knowledge proof system.” • “We extend Bitcoin by adding a new instruction: ZEROCOIN MINT.” • Normal Bitcoin transactions include an ECDSA signature by the key specified in the scriptPubKey of the referenced input. • However, for a spend transaction on an arbitrary zerocoin, there is no ECDSA public key.

• “Instead, we use the ZKSoK π to sign the transaction hash that normally would be signed using ECDSA.” • Validating a zerocoin changes Bitcoin’s semantics: • Bitcoin’s persistent state is defined solely in terms of transactions and blocks of transactions. • Furthermore, access to this state is done via explicit reference by hash. • Zerocoin, on the other hand, because of its strong anonymity requirement, deals with existentials: the coin is in the set of thus-far-minted coins and its serial number is not yet in the set of spent serial numbers. • “To enable these type of qualifiers, we introduce side effects into Bitcoin transaction handling.” • Processing a mint transaction causes a coin to be accumulated as a side effect.

• Processing a spend transaction causes the coin serial number to be added to a list of spent serial numbers held by the client. • “The complexity of the proofs will lead to longer verification times than expected with a standard Bitcoin transaction.” • “For our implementation, we chose to modify bitcoind, the original open-source Bitcoin C++ client. This required several modifications.

• First, we added instructions to the Bitcoin script for minting and spending zerocoins. • Next, we added transaction types and code for handling these new instructions, as well as maintaining the list of spent serial numbers and the accumulator.” • “We used the Charm cryptographic framework to implement the cryptographic constructions in Python, and we used Boost’s Python utilities to call that code from within bitcoind.” • Zerocoin reveals the number of minted and spent coins to all users of the system, which provides a potential source of information to attackers. This is in contrast to many previous e-cash schemes which reveal this information primarily to merchants and the bank. • The public model of Zerocoin actually removes an information asymmetry by allowing users to determine when conditions might pose a problem. • Zerocoin does not hide the denominations used in a transaction. • There are three distinct security choices for Zerocoin which affect either the system’s anonymity, its resilience to counterfeiting, or both.

These are: • The size of the Schnorr group used in the coin commitments. • The size of the RSA modulus used in the accumulator. • The security of the zero-knowledge proofs. • Because Pedersen commitments are information theoretically hiding for any Schnorr group whose order is large enough to fit the committed values, the size of the group used does not affect the long term anonymity of Zerocoin. • Accumulator RSA key: Because generating a new accumulator requires either a new trusted setup phase or generating a new RSA UFO, we cannot re-key very frequently.

• “As a result, the accumulator is long lived, and thus we truly need long term security. • Therefore we currently propose an RSA key of at least 3072 bits. • We note that this does not greatly affect the size of the coins themselves, and, because the proof of accumulator membership is efficient, this does not have a large adverse effect on the overall coin spend proof size. • Moreover, although re-keying the accumulator is expensive, it need not reduce the anonymity of the system since the new parameters can be used to re-accumulate the existing coin set and hence anonymize spends over that whole history.” • Zero-knowledge proof security λzkp: This parameter affects the anonymity and security of the zero-knowledge proof. It also greatly affects the size of the spend proof.

• Thankfully, since each proof is independent, it applies per proof and therefore per spend. • As such, a dishonest party would have to expend roughly 2 λzkp effort to forge a single coin. • Our results show that Zerocoin scales beyond current Bitcoin transaction volumes.

• Though we require significant computational effort, verification does not fundamentally threaten the operation of the network. • Even with a block containing 800 Zerocoin transactions — roughly double the average size of a Bitcoin block currently — verification takes less than five minutes. • “We have found the answer in solving the trustless setup problem through the use of the Sigma protocol in Zerocoin as detailed by Jens Groth and Markulf Kohlweiss from the University College London and Microsoft Research.” • What the Sigma protocol does is it eliminates the use of the trusted setup and replaces the RSA accumulators with elliptic curve groups. • More so, there will be a reduction of Zerocoin proof sizes from 25 KB to around ~1 KB allowing more Zerocoin transactions per block and making Zcoin much more scalable coupled with higher security using 256-bit elliptic curves roughly equivalent to 3072-bit RSA. • At the moment, the Zcoin network is using 2048-bit RSA.

• “We are utilizing the RSA-2048 parameters generated in 1991 from the RSA factoring challenge which was an academic challenge to learn about the difficulty of factoring large numbers. • The parameters we used had a $200,000 prize if someone managed to factor it.

• “To this day, no one has claimed the prize or announced a successful factorization of RSA-2048 with the last successful public factorization at RSA-768.” • Currently Zcoin can be mined by CPU and also Nvidia and AMD GPUs. • With Zcoin, the anonymity set is on a dramatically higher magnitude. • Instead of having an anonymity set limited to the few dozen, Zcoin has an anonymity set that encompasses all minted coins in a particular RSA accumulator that can scale to many thousands and unlike other solutions is not subject to transaction graph analysis. ZCash: • A common misconception is that Zcoin is a fork of Zcash. • Zcoin is based off the Zerocoin paper while Zcash is based off the Zerocash paper. • While the Zerocoin paper and Zerocash paper share common authors and both use zero knowledge proofs, they rely on different cryptography.

• Cryptographic Implementations • Zcoin uses RSA accumulators which were introduced in 1993 as the foundation of our anonymity scheme while Zcash uses zk-SNARKs which was recently formulated in 2014 and very few understand. • Comparatively, RSA cryptography is one of the earliest form of public key cryptography which was publicly described in 1977, has been battle tested and forms the basis of many encryption schemes in wide use today such as HTTPS, SSH logins and PGP for e-mail. • Trusted Setup • While both Zcoin and Zcash uses trusted setups, they are implemented differently. • Zcoin’s setup is conceptually very simple as it only involves taking two primes p and q, to generate a modulus n.

P and q are then destroyed. • “Instead of generating these parameters ourselves, we use parameters that were generated from the RSA factoring challenge many years ago so there is no possibility that the devs of Zcoin know these parameters.” • “We can remove trusted setup completely using the that would allow us to continue using the high anonymity of zero knowledge proofs without worrying about trusted setup and this is currently in development.” • Auditable Supply: • The main risk of having trusted setups being broken is that an attacker can counterfeit coins out of thin air. • Zcoin features a fully auditable coin supply. How To Become A BridgeCoin BCO Miner. • “In our view, this is immensely important as in the event of any issues with our trusted setup or cryptographic implementation, this can be detected.” • Major differences between Zcoin (Zerocoin Protocol) and Zcash (Zerocash Protocol) are as follows: • Zcash conceals the amount of money sent in each transaction, whereas Zcoin does not. • Zcash is less prone to privacy timing attacks than Zcoin.

On the other hand, this comes with a big tradeoff for Zcash, in the form of potentially undetected hyper-inflation in Zerocash’s money supply. • Zcash requires a higher use of memory with significantly longer time needed to send a private transaction than Zcoin. On the other hand, Zcoin currently requires significantly more storage space than Zcash. • Zcoin’s private transactions are not memory-intensive as with Zcash.

On a quad-core benchmark server, generating a private transaction with “Zerocoin mint” and “Zerocoin spend” consumes ~10 seconds of compute time. Thus, sending a private transaction with Zcoin could be between 5-200 times faster than Zcash, depending on device. On the other hand, Zcoin’s private transaction sizes are about 50 times larger than Zcash’s transaction sizes.

• Zerocoin was one of the most cited cryptography papers in the last 3 years, with over 200 citations. • The primary markets for ZCoin are: • Bittrex (currency pair XZC/BTC) at 61.61% of daily volume.

• Bitcoin Indonesia (currency pair XZC/IDR) at 37.10% of daily volume. • The Twitter handle for ZCoin is:. • ZCoin market cap history: • On September 19th, 2017, ZCoin ended the day at $22,727,100. • September 29th, 2017: ZCoin reaches a market cap high: $42,749,900.

• Resources: • Egalitarian Computing: • Zerocoin: Anonymous Distributed E-Cash from Bitcoin: • ZCoin wallets: • ZCoin mining guide: “Zcoin’s zero-knowledge proof makes a cryptographic statement. When someone is sent Zerocoin, the person only knows that X amount of money was sent to their wallet. Unlike Bitcoin, there is no other unintended identifying information about the sender and receiver. Zero Knowledge proofs ensure that there is zero information leakage about the sender and receiver of a transaction.” Thanks for reading! Make sure you get your free subscription to my daily digital newspaper, and don’t forget to check out my other cryptocurrency articles, collected here: Check out the: Live Twitter feed.

Privacy coin Zcoin has announced specifications for its new “incentivized nodes” system to help secure its blockchain. Similar to DASH’s Masternode network, “Znode” machines will always host a complete download of the chain and assist other nodes in verifying complex transactions. Also read: Join the to get the latest Bitcoin, cryptocurrency, and tech news updates: Zcoin Founders Take a Pay Cut to Reward Znode Operators Zcoin’s developers about rewards and requirements for Znode operators on the official website.

They will need to hold at least 1,000 Zcoins (XZC), have a computer or VPS with a fixed IP address and 1GB of RAM — and enough disk space to store the entire blockchain (currently around 25GB). Znodes will receive 15 ZXC from each block reward, or 30 percent. It’s estimated Znodes will hold about 50-60 percent of total XZC supply, depending on how many join. To pay node operators, Zcoin will also reduce its “founders’ rewards” system, which provided 20 percent (or 10 XZC) from every block mined to founding devs and investors. Those founders, including Poramin Insom, Roger Ver and Tim Lee, will take a 50 percent cut in their income. Zcoin will also increase the reward share given to its “team and bounty wallet”. Znodes are currently running on the testnet and will launch live in late November/early December 2017.

The change will require a hard fork, and developers are communicating with miners to make sure it goes smoothly. Strong Node Layer Needed to Process More Complex Transactions Speaking to Bitsonline, Zcoin’s Reuben Yap said Znodes would “ensure a strong node layer” for the network. “Beyond the economical benefits, Zerocoin verification is particularly computationally intensive and proofs also take up quite a bit of size (25 kb currently).” Zcoin transactions use “zero-knowledge cryptographic proofs”, which its developers claim set a higher privacy standard than coins using methods like built-in mixing or ring signatures. Developers estimate around 1,700-3,000 Znodes will come online within the first year.

As an anonymous/privacy coin, Zcoin will also need a trustless way to verify operators have the funds. Yap explained: “Although the 1,000 XZC is kept in your own wallet, it’s tagged to a specific address which you generate a key from. You use this key in your Znode hosted elsewhere so that it links to your 1000 XZC and identifies it as a Znode, but does not expose your funds.” Price Spike and Privacy Coin Popularity Like fellow privacy coins DASH and Monero, Zcoin has enjoyed a price spike in the past few days.

According to it’s, up 25 percent in the past day. That means Znode owners will need to hold $23,350 USD worth of the currency. Note that Zcoin is different to — the similar names have caused some confusion for newcomers, especially given that both coins launched around the end of 2016. In case there’s some confusion over the different “Z-name” privacy coin projects, Zcoin’s: A common misconception is that Zcoin is a fork of Zcash. Zcoin is based off the Zerocoin paper while Zcash is based off the Zerocash paper. While the Zerocoin paper and Zerocash paper share common authors and both use zero knowledge proofs, they rely on different cryptography. There is otherwise no relation between the two projects.

Yap said some merchants (including “real-world” locations) have begun to accept Zcoin, but that hasn’t been a priority so far. Zcoin developers are focusing on user experience such as light wallets, hardware and mobile wallets first. “We are however exploring some very interesting markets, but will announce this as a later time,” he added.

Have you ever used Zcoin? What’s your opinion? Please share your thoughts in the comments. Images via Zcoin, Pixabay.