ZCoin (XZC) is a decentralized virtual currency that uses a sophisticated and advanced protocol to conceal sender and recipient data on a Blockchain. The digital currency was developed with the aim of addressing the security risks posed by Bitcoin and other cryptocurrencies.
ZCoin uses zero-knowledge proof via the Zerocoin protocol to achieve complete anonymity on transactions details. The zero-knowledge protocol is a method by which one party can prove to another party that a given statement is true without having to share any crucial information.
With Bitcoin, any person can access the details of a transaction such as user addresses by viewing the Bitcoin Blockchain. It is also possible to link a transaction to public addresses belonging to individuals, which many view as a security risk.
Research has already shown that it is possible to use publicly displayed addresses to link identities and organizations to transactions. The mechanism can also be used to threaten privacy in social networks. However, none of this is possible with transactions involving ZCoin. ZCoin seeks to enhance user’s privacy by leveraging proof-of-work algorithms to decentralize mining. Instead of scaling anonymity, ZCoin offers total anonymity, including all mined coins.
History of ZCoin
The Zerocoin platform first came into being as a proposal by John Hopkins University professor Mathew D. Green. Graduate students Ian Miers and Christina Garman also participated in the initial design of the project. The project was proposed as an extension to the Bitcoin project that would go on to add true cryptographic anonymity on Bitcoin transactions.
The software powering ZCoin was initially called Moneta. It was revealed to the public on December 18, 2015. ZCoin later became the official name of the project, replacing the name Moneta. The cryptocurrency ZCoin, which powers the network, was launched on September 28, 2016
The total number of Zcoins to ever be produced was 21 million units. Currently, there are approximately 3.4 million units in circulation.
How Does ZCoin Work?
ZCoin works by enforcing Zero-knowledge proofs. It works under two cryptographic transaction phases: The Zerocoin mint phase and the Zerocoin spend phase.
Zerocoin Mint Phase
This phase occurs when one wants to send a private transaction to ZCoin. In this case, one needs to select the total number of coins they wish to mint. Once the selection is made, the ZCoin balance automatically decreases and one is credited with the new coins without any recorded transaction history.
Old coins are usually burned after the new transactions are approved. This prevents anyone from accessing the transaction history. As of now, one can only mint in denominations of 10, 25, 50, and 100 coins. Znodes are nodes that run on the ZCoin network to process Zerocoin transactions. Anyone running the node is entitled to a share of 30% of the newly-minted Zcoins.
Zerocoin Spend Phase
The spend phase allows one to send any amount from the new pool of approved Zerocoin from the mint phase. Zcoins can be used to pay for goods and services. They can also be used in conjunction with Bitcoin to secure an individual’s Bitcoins.
How to Buy ZCoin
It is not possible to buy ZCoin using fiat currencies. You can only acquire the cryptocurrency by exchanging them for other digital currencies such as Bitcoin.
Zcoin’s future looks bright given that it is the first cryptocurrency to implement MTP proof of work, which enables mass mining of ZCoin using GPUs and CPUs. The use of Znodes takes decentralization of the cryptocurrency to another level as well as guaranteeing anonymity. There are also plans to introduce Tor or some IP obfuscation that will make the cryptocurrency completely anonymous.
A recent rally in its price underscores the fact that people are starting to take note of the project’s worth given its fungibility and privacy levels.
How To Mine ZCoin
ZCoin uses the Lyra2z algorithm for mining. Lyra2 is an improvement of Lyra and was designed to preserve the security, efficiency, and flexibility of its predecessor.
Solo mining is one of the ways in which the cryptocurrency can be generated if one has a lot of hashing power. However, the process is for advanced users with lots of hashing power, as it might take a lot of time to achieve substantial returns. If you have sufficient hashing power, then solo mining is worth looking into.
Pool mining is for people who don’t have enough hashing power. Search online for tutorials for pool mining ZCoin, and you will find plenty of valuable information.
Either CPU or GPU can be used to mine ZCoin. People with NVidia or AMD GPU can engage in solo or pool mining of the cryptocurrency. You can also use cloud computing services provided by Digital Ocean or Google cloud for mining purposes.