ZClassic is new-generation version of the classic private cryptocurrency platform ZCash. By focusing on selective anonymity as well as securing private sensitive personal information, ZClassic hopes to become a leader in the value exchange division of digital currency. The key difference between these two platforms is the distribution and control of the coins by the founding team.
ZCash implemented a clause that made it so that they received 20% of the total mining rewards for the first four years of the company, leading to a 10% total control of the supply. A section of the community as well as the development team disagreed with this approach and believed that the miners deserved to receive the full reward for their efforts, as the miners are the key to establishing the total privacy and anonymity that ZClassic is known for. In addition, ZClassic also provides the anonymity and encryption backend for Bitcoin Private, through a hard fork on February 28th, 2018.
Until now, ZCash was the leader in this space with their zero knowledge proofs and zk-snark encryption. ZCash and ZClassic are very similar, but ZClassic hopes to move forward as a truly decentralized and community-driven token. In addition, ZCash placed barriers that limited the speed and scalability capabilities of the platform as it grew, creating a slower start for the first 20,000 blocks. ZClassic did not implement this feature, as they believe the platform should function as intended from the start, and not worry about founder and contributor incentives over the health and functionality of the network.
What is ZClassic?
ZClassic is the answer to an increasingly centralized ZCash system that some believe was not wholly invested in the future of the platform as much as they were their own financial futures. ZClassic’s main function are the zero knowledge proofing schemes that they have slightly altered from ZCash’s original design in order to better fit modern technological needs. Their zero-knowledge proving scheme is a decentralized and open-source technology that offers privacy and selective transparency of transactions for anyone who uses their currency. This can be especially helpful for those who wish to keep their personal transactions and identity secure in a world fraught with identity theft, as well as businesses who wish to only selectively release sensitive information as needed, rather than leave it open and vulnerable to those who have malicious intentions.
As mentioned, ZClassic is a fork from ZCash that removed the 20% mining deduction and also gave the community more voting power in decision making for the future of the coin. ZClassic also removed the block hindrances that ZCash placed on the initial blocks in the chain in an attempt to help push the price in their favor.
The Trusted Setup
ZClassic is using the same protocols that were used in the now famous “trusted setup meeting” where developer Peter Todd confirmed the viability of the zk-SNARK’s to provide private and anonymous transactions. ZClassic can hide not only the sender and receiver, but also the amount of the transaction while maintaining a trustless environment.
The Trusted Setup is what makes Zcash and ZClassic function properly. Zcash was the first cryptocurrency to use a simplified implementation of zk-SNARKs. These SNARKS are simply the algorithms that efficiently verify transactions quickly and add them to the blockchain without revealing any personally-identifiable details. The problem with these zk-SNARKS and the reason why controversy and debate has raged on is that, similar to most cryptographic algorithms, these keys need to be immediately destroyed after use in the genesis block.
The keys used in the first ever genesis block of ZClassic require a defining parameter to define anonymity and privacy. The problem is that this “key” can be used to create a never-ending supply of ZClassic if it is not destroyed. This means that the owners of the initial keys need to destroy it after their first transaction, and if this isn’t done, this user could theoretically anonymously create ZClassic for himself in an unending supply. This is why it is called the “Trusted Setup”, because a great amount of trust is required in order for this system to be setup and function properly.
Zk-SNARKS create the keys used to generate proofs for private transactions as well as helping to verify these same proofs. After the keys are generated, an encrypted piece of code is created that links the two keys together and facilitates the transaction. These small but important links of code are the troublesome pieces that, if not destroyed, could be used to commit fraud and illegally obtain ZClassic. This criminal could theoretically pay himself an unlimited amount of Zcash without being caught. While the creation of the perfect anonymous digital currency is an important breakthrough, this small but critical loophole makes it very difficult to ensure trust in the coming trustless age.
The premise behind zero knowledge proofs may be hard to grasp at first, but at its core, it simply means proving something exists without getting all of the knowledge surrounding it, which is done through the generation of keys. The strong privacy guarantee of ZClassic is delivered through encrypted transactions that are still able to be verified as valid under the network’s consensus rules without including private data.
Zk-SNARK stands for “Zero-Knowledge Succinct Non Interactive Argument of Knowledge.” It is a piece of code that proves information and hence a transaction took place using a secret one-time use key. This whole process takes place without revealing any personal information and without any direct interaction between the buyer and seller taking place, hence the name zero knowledge.
“Zero-knowledge” proofs allow multiple parties to agree that a claim is true without requiring any trust to be placed in these strangers. The participants are able to prove that they own a key that was generated as result of a successful transaction. The key premise to understand about ZClassic is that your information and addresses/keys are never available to anyone, the only type of data that is publicly viewable at any given time come in the form of cryptographically encrypted segments of code, effectively removing the ability for your information to be stolen while still verifying authenticity and cementing the transaction into the blockchain.
Future of ZClassic
ZClassic has a bullish roadmap that mentions coming features such as a specially designed Electrum Bitcoin wallet, as well as their own ZClassic desktop wallet. Perhaps the most important milestone for ZClassic is their fork into Bitcoin Private.
This fork is unique because it will not prevent investors from receiving the new forked currency, as multiple exchanges will be supporting this fork and crediting them with the new coin. The fork works by merging a Bitcoin chain fork with a ZClassic fork as the backend that supports anonymous transactions through the zk-SNARK protocols. This resulted in the Bitcoin Private currency that successfully completed their initial snapshot on February 28th, 2018. This method allowed for Bitcoin private to handpick the pieces of code from each of these unique platforms and integrate them into the new hybrid platform.
The ZClassic platform will remain and provide the backend for Bitcoin Private, but the new Bitcoin fork will be the main vehicle of value transfer using ZClassic’s unique mining rewards and zero knowledge proof architecture. ZClassic has some critical advantages over other currencies and even has a decentralized advantage over the top 25 sister project ZCash.