Zcoin, also known as XZC or Zerocoin, is an open source decentralized cryptocurrency that focuses on achieving privacy and anonymity for its users while transacting. To achieve this privacy and anonymity, Zcoin uses zero-knowledge proofs via Zerocoin protocol which is one of the most cited cryptography papers at this point in time. In other words, when you transact using Bitcoin or Ethereum or something similar, your transaction history is always linked to your coins by default which makes you vulnerable. That, because all it takes is one link to your personal information or IP to find out the origin of the coins. However, if you transact using Zcoin’s Zercoin feature, none of your transaction histories is linked to the actual coins and only the receiver and sender know that you have actually exchanged funds. Ethereum Keeping that in mind, let us see how this cryptographic wonder works in Zcoin.
How doez Zcoin work?
Zcoin works on Zerocoin protocol by enforcing Zero-knowledge proofs. Here is a short introductory video of Zcoin that explains how it works under the hood. Mint: When you want to send a private transaction with Zcoin all you need to do is select the number of coins you want to mint. Post that your normal Zcoin balance would automatically reduce and you will be credited with new coins with no transaction history. Basically, your old coins are burned cryptographically, thus preventing anyone else from using it again and being directed to your transaction history. The fact that you are credited with new coins with no history is maintained, and so is the total supply.
As of now, you can mint only in denominations of 1, 10, 25, 50 and 100. Let us suppose you choose ‘100’ coins to be minted. You will automatically be credited with new 100 Zcoins with no history attached to it.
- Spend: And now when you want to make a private transaction you will be required to use these ‘100’ minted new coins. You can now send any amount from this pool of fund in any denomination to anyone with anonymity because there is no history attached to it.
- Repeat: And the same way you can ‘mint’ and ‘send’ Zcoins in any number anytime with your privacy intact.
The total number of Zcoin to ever be produced is 21 million units. At present, there are approx. 3.4 million units in circulation and rest units yet to be mined. But the total supply has increased by 388450 XZC units after the Zcoin’s code bug, which the team has not rolled back due to economic reasons hence the total supply stands at 21.4 million approximately. Also, every 10 minutes, a Zcoin block is mined, and 50 coins are generated, which makes it 72,00 Zcoins per day.