ZeroCoin Protocol Release Could Soon Grant Bitcoin Anonymity

ZeroCoin protocol concept granting total anonymity is finally implemented in Moneta coin.

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ZeroCoin Protocol Release Could Soon Grant Bitcoin Anonymity

ZeroCoin, a blockchain protocol that grants total and absolute  transaction anonymity, has finally been brought from concept to implementation. The protocol will allow developers to create coins that, linked to the Bitcoin network, will grant transactions anonymization.

As most bitcoinists already know, the Bitcoin protocol does not grant anonymity, but only pseudonymity. This means that, while for the everyday use concealing a Bitcoin ID is enough, people with enough time and motivation can track down the owner of a certain address with a decent precision.

There’s no doubt that Bitcoin is less traceable than a bank account, but, opposite to what governments want to let us think, there’s also no doubt that Bitcoin is actually MORE traceable than cash. If terrorists want to be untraceable, they better stick to banknotes for buying their weapons: nobody will ever track down those pieces of paper.

Cryptocurrency Anonymity Is Not An Option

The first thing that comes to mind is that criminals will be the first to take advantage of this technology, that would finally put Bitcoin on par with cash in regards to transactional anonymity.

But that’s just the destiny of money: criminals use their medium of choice for their activities. It may be cash, it may be Bitcoin, it may be barter. That won’t be stopped ever, and Bitcoin or Zerocoin do not represent an increase in anonymity for criminal activities, even though, for sure, this new technology will in the first period create a certain traffic, mostly due to incompetence in the use of computers.

However, those that need anonymity the most are not criminals: they are the honest common citizens. One may argue, why should I be looking for complete anonymity? I am not a criminal, I don’t really care if the government tracks me and finds that I own 50 btc in my wallet.

The problem is, criminals will also be tracking transactions on the Bitcoin blockchain, and if you own a small fortune, they could abduct your daughter and ask for the Bitcoin ransom, and they could know more or less exactly how much you own.

And with Bitcoin, you are your own bank, so you have to take adequate measures to protect  your wealth.

As much as you can blame the system for managing your wealth and keeping populations poor on purpose, you should also be grateful to the system for blocking the bank from paying the ransom in these cases. Criminals limit their activities in this field because they know there’s a certain difficulty in getting the ransom paid.

You see where this is going: if you are wealthy, and this is, essentially, public on the Bitcoin ledger, you are at risk. Your family is at risk. There’s no bank to protect you from criminals, you have to do it yourself. And realistically, as not everybody can pay bodyguards for his whole family, the easiest solution is to not let the world know how much money one has.

“Anonymizing networks and payment methods could continue to fuel the major and rapidly growing threat of ransomware. In 2016, greater numbers of inexperienced cybercriminals will leverage ransomware-as-a-service offerings which could further accelerate the growth of ransomware.”

Specialistic Investigation On The Blockchain Won’t Be A Thing For Few Still For A Long Time

On another side, one could also argue that tracing back the owner of a certain Bitcoin address requires a concerted effort and much time. Police can do it, but can criminals? It’s not for everyone to understand how to trace back hashes and investigate to find the owner of an address.

But this is the present situation, which is going to change soon.

It’s just a matter of time before tools and instruments able to trace back certain quantities of Bitcoin in the blockchain history will become available on the internet.

You can already find tools online to create your own ransomware, people with decent IT knowledge, not hackers, not programmers, can already use this software.

Ransomware episodes and software are expected to rise steadily in the coming years, if you want to switch to digital currency, you have to be able to hide it.

ZeroCoin: Anonymization For Everybody

First of all, let’s clear this up: ZeroCoin is not a coin, it’s a protocol.

Thanks to two young people, Gary Lee and and Poramin Insom, the first working implementation of ZeroCoin became a reality with Moneta.

While the Moneta system is already working, Poramin is calling to action developers and coiners to expand the project:

“First, we would like to invite the cryptocurrency community to help test for bugs and give us feedback on our software usability. We have a bounty program in place to help incentivize bug-finding.

Secondly, we would like to invite the dev community to get involved in our project. If you are a talented developer or designer (even including website developers and designers), we would love to hear from you. There will be extra Moneta coins rewarded to those that can help significantly contribute to our project. If you think you can help in some other way, we would also love to hear from you.”

Not A Competitor To Bitcoin

Moneta is not a competitor to Bitcoin, or so Gary states:

“I guess one important point is that we do not see ourselves with competing against Bitcoin in any way. It’s simply an alternative if you care about privacy, or you have specific use cases that require complete privacy.

We may consider implementing atomic cross-chain swaps, which allows it to be transferable with Bitcoin.”

However, when some developers make a coin, the aim is to maximise adoption, and, as exposed earlier in the article, it’s not difficult to see that anonymization is something Bitcoin will need very, very soon. It seems a bit strange that the developers didn’t implement their protocol in the Bitcoin Core and instead spawned another altcoin: after all, ZeroCoin was conceived as an extension to the Bitcoin protocol.

Gary Le explains that pushing the ZeroCoin protocol into the Bitcoin Core would likely take years, as even the smallest change causes a lot of controversy in the community, and this modification would mean a fork of the code.

Atomic cross-chain swaps would be the solution, but at the moment there’s no word on when this feature will be implemented:

“The best way for a person to hide his Bitcoins would be to use atomic cross-chain swaps to exchange them for Moneta in a completely decentralized fashion. This could become a common flow, and essentially “imports” the Zerocoin anonymizing technology into Bitcoin. It could also open up opportunities never possible before, such as Satoshi being able to liquidate his wealth anonymously without having to rely on any centralized exchange. We have not planned anything with regards to developing atomic cross chain swaps, and it is not a core focus of the project. It might come soon, a long time later, or never. However, if we do, we will announce it.”

But do not despair: as soon as any exchange adds Moneta into its system, the flow will be as easy as registering with the exchange, converting the chosen amount of BTC into Moneta, and then reconverting the Moneta into BTC and sending it to another address (or better, more of them) in your wallet.

Still better than any bank.

We hope that you liked this article. We recommend you get acquainted with our ratings of the top Blockchain companies and cryptocurrencies.

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