Black swan and uncertainty have become the keynote of 2020.
What is the relative certainty in uncertainty, and what is the law behind the development context? Let us try to find the answer in the past 2019.
For privacy technology, 2019 may be the most exciting year in the past few years.
The ancient anonymous coin, which was born in 2014-2016, fell into a community scale bottleneck and a regulatory storm after several years of development. Monero and Zcash chose to carry out anonymity to the end in slow iterations, while continuously enhancing the performance of the public chain (product availability), while DASH is changing rapidly, slowly moving towards the road of digital cash in the main promotion of instant payment.
On the other hand, new anonymous coins represented by Grin have appeared one after another, and mainstream digital currencies represented by ETH, BCH, and LTC are incorporating privacy technology into their update schedules, which means that pure anonymous coins are facing stronger challenges. competition.
After years of empirical evidence, some people in the industry believe that pure privacy performance is not suitable as a core value proposition for tokens that want to go public; final destination.
01 Why do we need privacy technology?
As we all know, Snowden is a privacy fighter against government surveillance. In his view, privacy technology means giving people freedom of will.
Now it is the world of experts and the rich, and privacy has become a privilege. But the privacy we need is not a privilege, but a right. Snowdens shouts were deafening.
He further stated that compared with the freedom of speech, the freedom of transaction obtained by individuals is much smaller. In Snowdens view, Bitcoin has given freedom to transactions, but still faces the threat of low privacy, and thus requires a high degree of privacy technology.
This article mainly starts from the disadvantages of electronic cash, arguing that people should use decentralized digital currency or anonymous currency.
In order to eliminate crimes such as corruption and money laundering, centralized digital currencies try to replace traditional banknotes, but at the same time, centralized platforms use personal privacy as a means of profit. A digital trace of your life will be permanently preserved, allowing any person in power, good or evil, to view your life in detail through transactions.
Centralized digital currency will drive cash out of the stage of history. The death of cash is the death of freedom. At that time, nothing can help you stay away from the prying eyes in the panopticon. And privacy-focused cryptocurrency will give Freedom brings rebirth.
At the 5th Satoshi Nakamoto Roundtable, the participating senior practitioners expressed their strong interest in privacy technology.
They talked about that privacy has many scenarios in the real world. For example, for enterprises, how to protect privacy is a thorny issue.
Because, business operations are inevitably subject to state action intervention. We used to run services for many users together, but after receiving a large number of letters from government agencies, we didnt want to deal with these troubles, so we shut down the service. We are a service-driven company. company, so we maintain customer trust. The safest approach we can determine is to store as little data about users as possible. We must assume that at some point, we may be forced to hand over the data we store All data about users.
With the availability of privacy technology, perhaps many enterprises can easily solve this problem.
When it comes to the usage scenarios of privacy technology or anonymous currency, many people think it is used for money laundering and crime without hesitation.
But this article systematically explained to us that the high anonymity of anonymous coins is not the same as the first choice for money laundering.
Through the coinjoin operation provided by a third party, the method of using Bitcoin to launder money is quite mature, and the anonymity it achieves is no less than that of anonymous coins.
02 Privacy technology genre
Privacy technologies include the CryptoNote privacy protocol represented by Monero, the coinjoin technology represented by Dash, the zero-knowledge proof (zk-SNARK) technology represented by Zcash, and the Mimblewimble protocol represented by Grin.
《Why was Gu Tianle able to launder money with Monero, but was caught using Bitcoin?These technologies are introduced in detail, so I wont repeat them here. Around these technologies, a rich anonymous coin project landscape has been developed, and the following article introduces it most comprehensively.
As a branch of the blockchain world, Privacy has so far developed a privacy ecosystem including privacy technologies and privacy products (anonymity coins). The development of privacy technology has led to the emergence of anonymous coins, and it is the development of anonymous coins that has promoted the continuous progress of privacy technology.
By 2019, in addition to the old privacy projects, new technologies are also emerging.
On the basis or challenge of zk-SNARKs (improving privacy while reducing transaction capacity and increasing transaction costs), new zero-knowledge proof technologies including zk-STARKs and Bulletproofs have been derived. Under the concept of new privacy technologies, including Many projects, including PLONK, Halo, Sonic, Supersonic, etc., were born in 2019.
In addition, capital and public chains are also focusing on privacy.
NuCypher, which focuses on the privacy layer of Ethereum, completed the $10.7 million future token agreement SAFT investment led by Polychain Capital, becoming another star project. The mainstream cryptocurrencies represented by Ethereum, Litecoin, and BCH are putting their next deployment plan on the privacy protocol.
With the integration of privacy features in mainstream cryptocurrencies, pure privacy coins are facing more and more strong competitors.
The most interesting part of this article is that it introduces some non-mainstream privacy implementation methods.
The second layer protocol built on the underlying technology of the blockchain, such as Lightning Network, state channel, etc., allows a small number of users to conduct off-chain transactions with each other. This means that all intermediate state is stored among these users, and only state changes are written periodically on the main blockchain. The intermediate state is thus invisible to outside observers, thereby achieving a degree of privacy.
03 The danger and innovation of the three major anonymous coins
The early anonymous coins had a first-mover advantage, but they were also questioned.
Anti-money laundering policy is one of the points of doubt.
In August 2019, Coinbase UK dropped support for Zcash due to regulatory pressure. In September, OKEx Korea announced the delisting of six cryptocurrencies including Monero, Dash, Zcash, ZCache, Horizon and SuperBitcoin, and stated that this was related to the FATF rules formulated in June...
In addition to supervision, there is also a market for the view that anonymous coins are useless.
After being delisted, Dash Core CEO Ryan Taylor frequently spoke out in the second half of 2019 in order to help himself, clarifying that Private Send (private transaction) is only one of the options, and this type of transaction only accounts for less than 1% of the Dash network transaction. Ryan Taylors defense won Dash a chance to review (for example, OKEx Korea announced the temporary suspension of Dashs offline plan); but on the other hand, it also revealed that the privacy option is almost unused.
So, how do anonymous coins solve this paradox?
Monero, as it defines itself - Untraceable Digital Money, will not bow to regulation and instead increase its usability.
《Privacy is the future, but privacy coins are notBitmain spends 700 million to buy Dash, what exactly is it fancy?
If Monero is on the road to anonymity, Dash is just the opposite.
Dash does not care about the fact that the anonymous transaction function is unused. Raico, the head of the Dash Chinese community, even subversively interpreted: Dash is instant payment by default, and anonymous payment is only an option. This is enough to show that what Dash wants to do is not an anonymous currency, but a payment digital currency. , Digital Cash (digital cash).
This is not a whim or a roundabout scheme. Judging from its evolution process, Dash has already surpassed the scope of DarkCoin, and has achieved many innovative applications in terms of public chain scalability, developer incentives, and community governance.
Dash is created on the basis of the Bitcoin code. Based on the underlying PoW ledger, there is also a layer of master node network with POS as the consensus mechanism, which provides the network with currency mixing, instant payment, chain locks against 51% attacks and community voting. Governance four functions.
Zcash’s “October Siege”
Zcashs crisis is much more complex, with at least these two aspects.
First, the development team has a crisis of trust.
In May last year, Electric Coin Company, the development company of ZCash, disclosed its transparency report for the second half of 2018, showing a huge financial deficit of $3 million.
In addition, according to the Zcash project design, in the first four years of the project, 20% of the block rewards will be deducted and used as operating expenses for the founder and team (that is, the ECC company). According to the plan, this pumping mechanism will end in October 2020.
However, recently, the Zcash Foundation re-voted in the community. As a result, the previous design was overthrown and the crowdfunding mechanism was continued, which caused dissatisfaction among some members. In July 2019, some founding team members forked Zcash, created a new chain Ycash, and implemented the original route.
Another aspect is that the optimized design of zk-SNARKs by external competitors will weaken the advantages of Zcash. V God has made it clear that zk-SNARKs will be added to Ethereum 2.0, while Israeli startup Starkware raised $6 million in funding last year to deploy this privacy solution for customers who need it.
04 Can the emerging anonymous currency reproduce the legend?
In addition to the ups and downs of the old-school anonymous coins, compared to the past three years, 2019 may be a year for the emerging anonymous coins Qianfan to compete.
In January 2019, the Grin mainnet developed based on the privacy protocol MimbleWimble was launched, triggering the first wave of hot spots in the new year.
A year has passed, looking back at the various designs of Grin, it is still valuable.
People are used to comparing Grin with the old anonymous currency, calling it anonymous currency upstart, but Grins goal is far more than that, but to become another kind of Bitcoin.
Its unlimited, linear issuance mechanism is different from 99% of digital currencies. Its explanation is also quite reasonable:
“First, if monetary policy is deflationary, early miners will inevitably benefit more than later miners — which is not what we want to see. Second, we think this will make it easier for Grin to become a currency, while Not a store of value like Bitcoin. If the value of Grin is less likely to change, people will be more willing to use it rather than hoard it speculatively.”
As the parent body of the two new coins, MimbleWimble has its own advantages.
The combination of confidential transactions, CoinJoin and Dandelion and other encryption methods enables MimbleWimble to achieve the purpose of hiding transaction addresses and transaction relationships.
Also, despite being based on MimbleWimble, Grin and BEAM differ in every other way. The Grin team chose to adhere to open source governance, and its monetary policy is unique; BEAM, like Zcash, reserved 20% of its tokens to the founding team, and also conducted a round of private placement. The race between these two dark horses has just begun, we might as well wait and see.
Last year, one of the emerging anonymous coins followed the upgraded version of the three major anonymous coins, that is, a slightly modified anonymous coin from the original coin. This article focuses on a small mining coin SERO that claims to be an upgraded version of ZCash, which focuses on zero-knowledge proof protocols and smart contracts, known as Black Ethereum; there are two upgraded versions of DASH, AX and KMD , was dubbed by some speculators as the Two Heroes of Dashi...
However, although such small mining coins attract many investors in the primary market and players in the secondary market, it is difficult to say that there are mainstream capital and weight developers involved. The consensus and the community are suspicious. .
The need for a high degree of anonymity in the digital world is self-evident. Although the world of anonymous coins seems to be calm, the continuous progress of privacy technology is inseparable from the exploration and persistence of early anonymous coins; in the long run, the entry of new players will boost the further prosperity of the privacy field. In addition to external training, many anonymous coins still need internal repairs, continue to improve product usability, and at the same time, find more usage scenarios and convert potential community members.