Zcash: life on a roller coaster

Zcash has been subject to repression in Japan. He then became one of the leaders in the digital field, working in New York. He was accused of a billion dollar fraud, and yet he solved the mining mystery. All this time, Zcash has been a leader in the development of the latest cryptographic technologies.

Zcash is a fork of Bitcoin that uses a cryptographic protocol called Zero Knowledge Proof. This allows users to hide both the parties involved and the amount, while still recording and storing the transaction on the public Zcash blockchain.

This level of privacy has become a stumbling block for many governments and regulators, in the same way that cryptographic protection on phones has become a barrier to law enforcement seeking user information. Following the $500 million hack of Japanese exchange Coincheck, which was attributed to North Korean hackers, the Japanese regulator has launched a crackdown on privacy-focused cryptocurrencies... even though they were not successfully stolen.

Of course, Zcash is not the only cryptocurrency with an emphasis on privacy. Their list also includes Monero and Dash. But Zcash is considered the most advanced of them. Zcash recently released a new and improved version of zk-SNARK certificates, so we can expect steady growth in zk-SNARK transactions once the new version is integrated into the network.

JPMorgan Chase has partnered with Zcash to integrate privacy technologies into its own blockchain research. As a result of this and/or a deep understanding that privacy is of utmost importance to the financial industry, Zcash was recently listed by the New York State Department of Financial Services as a Gemini crypto exchange, which is subject to strict regulatory regulation. And at the same time, it is banned in Japan. We live in amazing times.

In addition, Zooko Wilcox - engineer, cryptographer and creator of Zcash - is being criticized even by his own community. The reason for this is ASIC miners.

For many years, Bitcoin mining has been controlled by large mining companies that use special devices that are capable of mining much more efficiently than ordinary processors that most small miners use.. In an attempt to democratize mining, many cryptocurrency companies have opted for ASIC boycott. Zcash is one such company. Despite this, ASIC developers are not fools either, so they decided to release a miner for each of the major cryptocurrencies. When the company announced the release of a miner for Monero, the developers changed the hashing algorithm in order to prevent the spread of ASICs on their platform.

This is big business. Tens of millions of dollars are at stake every day, this does not take into account the costs of the so-called “51% attacks”, which have recently targeted several small cryptocurrencies. When the announcement was made to launch an ASIC for Zcash, Zooko did not immediately change the hashing algorithm, and was immediately accused of treason. The developer’s social networks receive many questions about the price for which the CEO of Bitmain purchased it.

Every compromise in a multibillion-dollar market is sure to offend someone. In this case, ASIC miners for Zcash mean more specialized hardware, which has a positive effect on the security of the system. On the other hand, corporations have a clear advantage over individual miners, and pose the threat of a 51% attack. Zooko's current strategy is to support both GPU and ASIC miners, sharing the rewards between them.

The most surprising fact about Zcash is that in order to implement zk-SNARK, a team of participants had to create and then hide secret information. If a few of them don't, and they subsequently collaborate, it will allow them to create tokens out of thin air. The team performed a complex ritual for six people, and if it was carried out honestly, then the Zcash network is completely resistant to this kind of attack.

However, even these guarantees can be strengthened. Zooko is considering new cryptographic designs called “STARKs” and “bulletproofs” that would provide even greater levels of protection. He also plans to implement the “Bitcoin-NG” protocol to scale Zcash by an order of magnitude or two..

Meanwhile, the Secret Service, feeling that they cannot take any adequate action in response to the Coincheck hack, decides to launch a crackdown on confidential cryptocurrencies that are not relevant at all. And this all comes a week before Zooko organizes a conference in Montreal, which will undoubtedly be attended by those who accuse him of being corrupt. It is not yet known whether this is all for the better or for the worse, but one thing can be said - it definitely saves you from boredom.

According to techcrunch.com