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Zcoin has upgraded to the Sigma protocol today, beefing up its privacy features and allowing users to keep their entire history hidden. The protocol, the result of a hard fork, went live at block 184200 this morning. As a result, Zcoin wallets and nodes will need to be upgraded to Sigma in order to keep using the network.
In the process, the network has abandoned Zerocoin, a protocol proposed in 2013 as a privacy-focused alternative to Bitcoin. Zerocoin was used as the basis for other privacy coins, such as Zcash.
While Zcash, the #26 ranked cryptocurrency by market cap, is more well-known than Zcoin (ranked #81), it has one particular problem: toxic waste. Due to the requirements of the cryptography it uses, when it is created (or upgraded), it goes through a “trusted setup” ceremony. At this point, if everybody were to collude, or the ceremony was fixed, the entire cryptocurrency would be at risk. The private keys produced during the process are known as toxic waste—if anybody could access them, they could control the network. Which, unsurprisingly, is a bit of a worry.
Zcoin’s new upgrade claims to offer similar privacy features to Zcash but, crucially, without the trusted setup. And it’s about time, says Poramin Insom, founder of Zcoin.
“Trusted setups go against the fundamental principle of blockchain which is ‘don’t trust, verify’ and Sigma offers the first compelling alternative to solve all these issues,” he said, in a statement.
From now on, it will no longer be possible to look up a Zcoin address and see its transaction history. This means that, while the details of each transaction will be publicly available (the amount, time, etc.), it will be much harder to link multiple transactions together. This stops blockchain analytics companies from being able to piece together someone’s transaction history, and makes it harder to identify the person associated with the address.
However, the plan is to bring this level of privacy to the transaction data itself. Zcoin is working on an upgrade called Lelantus, which would eliminate this information altogether—as Zcash already does. The upgrade is scheduled for 2020, but with the arrival of coins like Libra, where privacy isn’t as much of a concern, people are hoping they might speed things up a tad.