An interview from 2013 has recently been uncovered and suggests that Zerocoin, the technology behind Zcash, may have a “police backdoor” into their code. The interview has already been deleted, but is viewable through the archive.org Way Back Machine. The original article called “Bitcoin Add-On Makes Your Virtual Purchases Private” appeared in new scientist back in March 2013. In the article, John Hopkins researcher Matt Greene made the comments. He is currently listed as a scientist for the Zcash project. The article was recovered by Twitter user “grubles“.
Zcash Troubles Abound
Zcash is a privacy cryptocurrency that has always faced a number of controversies. There are issues like the so-called “founders tax”, and of course the infamous trusted setup in which many technically literate commentators have suggested could be by design a serious problem. The problem is so severe that if exploited, the trusted setup could allow any of the founding members to create an infinite amount of Zcash on the network and it would all be completely undetectable.
According to the article from 2013, the group that put together Zerocoin (a technology that was later adapted into other privacy currencies like PIVX) were originally intending for their technology to become an add-on to the bitcoin core code. However, when this failed to develop, the team instead released their own project which is what we now know as Zcash today.
This page on Zerocoin + Matthew Green ("Scientist" on the Zcash team page) is now deleted, but the internet never forgets.
Zerocoin was initially supposed to be added to Bitcoin in some manner, but now exists as an altcoin known as Zcash.
"A backdoor", Green says. pic.twitter.com/fvIe6jByb7
— notgrubles | activate BIP 176 (@notgrubles) June 27, 2018
The idea behind a back door is that software is designed with a secret entrance of sorts that would allow for possibly governments, law enforcement, or developers of the software itself to gain secret access to a system without anyone being aware. This is much in the same way that a hacker would gain access to a system secretly.
So what did Matthew Green say in the interview with NewScientist? He said that himself and his team were not interested in “facilitating criminal activity with Zerocoin”, and that “Zero coin would give you this incredible privacy guarantee, then we could add on some features which let the police, for instance, to be able to track money laundering. A back door.”
If such a backdoor existed, it would mean basically one thing – all of Zcash’s alleged privacy features are completely ineffective. As such, all transactions ever made on the network could perhaps be later made public or used in a criminal case.
If such a backdoor is proven to exist (and that has so far not happened), then that would mean potentially all transactions on the Zcash network would be subject to blockchain analysis much in the same way that bitcoin is today.
Does Zcash Have a Backdoor?
This is a difficult question to answer, and it also in many ways ties back to the idea of the trusted setup.
For those that don’t know, the trusted setup was when Zcash first launched its Genesis block in 2016 and created a set of keys upon which all cryptographic data that keeps the network private was based on. It’s called a “trusted setup” because those who created the keys need to be trusted themselves. If they were to keep a copy of the setup information, then they could, as mentioned above, produce an infinite number Zcash, and perhaps even gain access to otherwise private transaction data.
Read our Guide to Zcash
Outside of the trusted setup itself, it is also entirely possible that a backdoor could exist in theory, and no one would be able to know about it. However, the odds of there actually being a back door in Zcash are quite low.
The Case Against a Backdoor
Think of it this way. Let’s imagine that the FBI has a back door into Zcash. They use that back door to trace illicit activity and make an arrest. Once this enters the court system, it would generally become public knowledge. This would mean that even if they didn’t admit to the back door, they would be admitting that they were somehow able to get transaction data out of Zcash in order to build their case against their suspect. And of course, once this became public knowledge, the public would lose trust in Zcash and likely move on to something else. This would in turn causes Zcash usage and subsequent valuation to drop rapidly.
With that in mind, those who created Zcash and benefited from the founders tax likely held a large supply of the coin. As such, they would be quite foolish to create such a back door because it would devalue their own currency and thus hurt their own holdings. Further, it would be a major black mark on their public personas and likely for some would force them to stay out of the technology sector altogether since they would be known for installing backdoors.
The only final thing to consider is that perhaps a backdoor does exist, and a system somewhere is secretly collecting all the transaction data from the Zcash network but not using it. Then, perhaps at some point in the future, the data could be used somehow.
The truth of the matter is that there is really no way to prove whether or not such a backdoor exists. But the fact that one of the founders of the Zerocoin protocol who now works for Zcash said that they would be happy to put in the back door is suspicious to say the least.
But again, at this time all we have is a five-year-old article and a raised eyebrow. No direct or concrete proof has been found indicating that Zcash does, or does not, have a back door.