Bitcoin is dead. Or, not. We don’t know what the future holds, but what we do know is the pioneer in the cryptocurrency movement is in some trouble.
In periods of trouble, companies either fix their flaws, either real or perceived, and bounce back, or they’re quickly replaced by a better alternative.
Zcash is one such alternative.
Much like Bitcoin, Zcash uses the blockchain, a public ledger of all transactions using the currency. Where it differs is in the “public” part. Zcash is completely anonymous and relies on “zero-knowledge proof” to offer the same anti-forgery assurances, while masking the sender or receiver if they so choose.
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We’ve seen “Bitcoin killers” come and go, but Zcash is in a unique position amongst cryptocurrency enthusiasts in that it uses the blockchain to secure and verify transactions, but it doesn’t pass along identifying data.
This could lead to the world’s first truly anonymous currency system.
According to Zooko Wilcox, a 41-year-old cryptographer and the creator of Zcash:
Consumers want to buy and sell things over the Internet and need privacy from snoops who might use the knowledge of their transactions against them. This is the first time you can transact with anyone on the Internet, and control over who gets to find out about those transactions is solely in your hands.
Zcash’s early investors offer additional intrigue.
Naval Ravikant was an early investor in Twitter and Uber, Barry Silbert founded a startup equity-trading platform called SecondMarket and Roger Ver has serious cryptocurrency street cred after investing in bitcoin startups, Blockchain.info and Bitpay as well as bankrolling the defense of now-convicted Silk Road creator, Ross Ulbricht.
One other interesting departure from the bitcoin model by Zcash is in its corporate structure. That is to say, it has one. Zcash is a for-profit company that aims to ‘tax’ mined Zcash coins at a rate of 11 percent.
10 percent will go to fund the company and pay back its early investors, while 1 percent will be funnled to a not-for-profit created solely to oversee the code and community over the long haul.
Just last week, Zcash published its source code on Github in an effort to iron out some of the wrinkles before its public launch.
Developers can currently take the system on a test run, though there’s no graphical interface, so you’ll need to run it from the command line. Any transactions on the network don’t represent actual money.
Wilcox notes that Zcash probably won’t be ready for actual cash transaction for another six months.
➤ Zcash, an Untraceable Bitcoin Alternative, Launches in Alpha [Wired]
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