ZCoin is a cryptocurrency that follows the Zerocoin protocol, a type of zero-knowledge proof. For those unfamiliar with the idea, zero-knowledge proofs are methods of proving the existence of information without actually revealing the information in question. The main goal of Zcoin is to provide a cryptocurrency that allows complete privacy for users in all transactions, something that other cryptocurrencies do not provide.
What Privacy Problems Does Zcoin Address?
There are some inherent flaws in Bitcoin’s structure when it comes to privacy. The perfect example is that its chosen method of solving the problem known as “double spending” is to store all Bitcoin transactions on a public ledger. This means that every transaction is visible, sacrificing privacy.
Additionally, many studies have shown that you can use various techniques to analyze the network topology of Bitcoin. In fact, these are the same methods you would use for analyzing social network topology, meaning many people are familiar with them. Because anyone can access the public ledger, there is no privacy from anyone, including powerful institutions and corporations. Zcoin offers up the example of the NSA using the information to get more.
Zcoin acknowledges that other cryptocurrencies have properties to improve anonymity, but they don’t do enough. Bitcoin, for example, uses ring signatures or transaction mixtures, but these don’t score well on a metric known as the “traceability set” that measures cryptocurrency privacy.
How Does Zcoin Deliver Improved Privacy?
The key to Zcoin’s ability to improve privacy over the Bitcoin Protocol is the use of the Zerocoin technology. With this technology, you “mint” a coin that you find listed on the public ledger, turning it into a private coin. Then, when you choose to spend this “minted” coin, there is no need to reveal the owner. You can repeat this process over and over again for complete privacy. The process of minting the new coin means that the transaction is not tied to any older transactions. This breaks the chain and eliminates the option of analyzing the blockchain to determine the owner of the coins.
Through improved privacy, Zcoin aims to enhance individual liberty. It can deliver freedom of commerce via financial privacy. This way, people can complete transactions however they want as long as they do not infringe on others’ individual liberty or well-being. Zcoin also feels that freedom of commerce leads to peace and prosperity between cultures and countries.
What Else Should You Know About the Zerocoin Protocol?
It is important to know that Zcoin qualifies as the very first complete implementation of Zerocoin protocol. That protocol lets users enjoy complete privacy with zero-knowledge cryptographic proofs. There is constant active research and improvement on the Zerocoin protocol, including creating a new extension that can hide address and transaction balances.
How to Mine Zcoin?
One of the ways to get Zcoin is by mining, which you can do with AMD and Nvidia GPUs or a CPU. Before mining, you must create a Zcoin (XZC) address for your mining payments to be received at. To mine Zcoin, start by getting your miner, either a Nvidia GPU, AMD GPU, or CPU miner, then extract your EXE binary into your chosen folder. Register in one of the pools, then configure your miner using the code on Zcoin’s “How to Mine” page. From there, you just have to run the .bat file you created when configuring your miner.
How to Buy ZCoin
You are not able to purchase ZCoin with “Fiat” currency so you will need to first purchase another currency – the easiest to buy are Bitcoin or Ethereum which you can do at Coinbase using a bank transfer or debit / credit card purchase and then trade that for ZCoin at an exchange which lists the token. Read on to see how to purchase it.
Register at Coinbase
For first time buyers of crypto currency, we recommend that you use Coinbase to make your first purchase – its easy to use, fully regulated by the US government so you know it is one of the safest and most reputable places to purchase cryptocurrency from. Coinbase offers the ability to purchase Bitcoin, Litecoin and Ethereum with a credit or debit card or by sending a bank transfer. The fees are higher for cards but you will receive your currency instantly.
You will have to carry out some identity verification when signing up as they have to adhere to strict financial guidelines.
Make sure you use our link to signup you will be credited with $10 in free bitcoin when you make your first purchase of $100.
To get started, click the “Sign up” button where you will be taken to a registration form where you will need to enter your name, email and choose a password.
Purchase Ethereum
In Coinbase, visit the “Buy / Sell” tab at the top, select “Ethereum”, choose your payment method and enter the amount you wish to purchase – you can either enter a US Dollar amount or a number of Ether.
You will then be asked to confirm your transaction, if paying with a card you might have to complete a verification with your card provider. Once that’s complete, your Ethererum will be added to your account.
Purchase ZCoin at Binance
You can now send your Ether over to Binance to make your purchase of XZC take a look at our review of Binance here to see how to signup and purchase on their exchange.
GVT is also available on the following exchanges:
What Are Znodes?
In general, nodes are computers hosting full copies of the Zcoin blockchain and work to verify transaction validity. Znodes earn a portion of the Zcoin’s block reward as an incentive for hosting the powerful, reliable node to support the network.
To set up a Znode, a user must have 1,000 XZC, which is refundable collateral. This requirement exists to ensure that any holder of a Znode has a vested interest in the coin and will be incentivized to ensure it has high uptime, is frequently updated, and works honestly. In the future, Zcoin hopes to use Znodes as building blocks for additional services, such as delegating Zerocoin transaction processing.
Those who set up Znodes receive 30 percent of the block reward, which would be 15 XZC at the moment. Znodes receives this reward in a queue, and the payout is typically once every couple of days, but it varies based on the number of active Znodes. The quantity of returns depends on active Znodes since more active Znodes result in fewer rewards for each.
What Is the MTP Algorithm?
Zcoin uses the MTP algorithm to provide fair and decentralized security, unlike proof-of-work coins, like Bitcoin, that have centralized security. The MTP algorithm was developed in June 2016. It should resist ASIC and GPU mining, so mining becomes possible with just a CPU, lessening the disparity between types of users.
How Does Zcoin Compare to Zcash?
Both Zcoin and Zcash were developed from Zerocoin; however, they are two separate entities and neither forks off the other. Instead, they rely on differing cryptographic assumptions, giving each its own tradeoff. The team at Zcoin says that the two cryptocurrencies supplement each other and describes them as “sibling projects.”
Zcash has additional privacy since Zcash hides the amount sent, which Zcoin does not. Both hide both the recipient and sender. Zcash also has slightly more advanced cryptocurrency, but this might not be a positive as, depending on future research, that might make it riskier. Additionally, this advanced cryptography means that Zcash transactions take more time than Zcoin ones.
Conclusion
For those who appreciate the benefits of cryptocurrency but dislike the lack of privacy, Zcoin offers an excellent option. Its use of the Zerocoin protocol enhances privacy for both the recipient and the sender in a transaction without unnecessary complications.
