zcash cryptocurrency

New ZCash Cryptocurrency Promises Completely Anonymous Transactions

On January 20, developer Zooko Wilcox released an early edition of ZCash, an anonymous alternative cryptocurrency similar to Bitcoin. Wilcox and his team have only released the alpha version of the currency so far, but are promising that transactions will be completely anonymous. Bitcoin was originally conceived as a semi-anonymous currency, but the level of anonymity ultimately depends on precautions taken by the user. ZCash wants to take the level of privacy even further.

As of right now, the transactions being conducted on the ZCash system are not using actual money. The system is not expected to go live for another six months. ZCash will operate similar to Bitcoin by generating currency via the process known as mining. This involves high powered computers solving complex mathematical equations in order to release the coins.

Wired reports:

“Like bitcoin, Zcash’s currency will be created by ‘mining’ computers that compete to solve mathematical problems. But unlike bitcoin and other attempts to create an alternative cryptocurrency or ‘altcoin,’ Zcash is launching as a for-profit company. For its first four years online, a portion of every mined Zcash coin will go directly to Wilcox’s Zcash company and a smaller portion to a non-profit he’s creating to oversee the Zcash code and community longterm. Wilcox says that he plans for 1 percent of Zcash’s currency to ultimately go towards that non-profit, and 10 percent to be paid to the for-profit startup.”

ZCash, once known as Zerocoin, will employ something known as a “zero-knowledge proof” which will allow any spender or receiver to choose to keep their Zcash transaction private.

“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,” Wilcox, a 41-year-old cryptographer, told Wired. “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.”

The possibility of using a currency like Zcash or bitcoin to conduct illegal activity has been an increasing concern for law enforcement.

“The people who built the first cars weren’t held responsible for car accidents or bank robberies. The people who use these tools for good or ill are held responsible for that,” Wilcox said. The guilty verdict in the Silk Road trial seems to indicate that the judicial branch does believe it can hold administrators for websites responsible for the actions of the users.

Still, Wilcox told Wired that he believe legitimate business transactions would be the majority of business conducted using ZCash.

“Can the internet be used for crime? Yes, it can be, but that’s not what’s important about it,” Wilcox says. “I’m focused on the trillions of dollars of legitimate commerce that flow around the world.”