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Crypto Crypto Education Cryptocurrencies

Monero vs. Zcash vs. Beam on Confidentiality and Scalability

When the world was first introduced to cryptocurrencies, one of the features that stood out the most was the privacy these digital coins offered. However, as more people got on board the blockchain train, it became apparent that bitcoin and other pioneer cryptocurrencies weren’t exactly as private as we thought. 

Thus, the need for privacy-oriented cryptocurrencies arose. These cryptocurrencies have several built-in security features that enhance privacy and anonymity. Therefore, it’s no surprise that they are a hot deal among crypto enthusiasts who prefer to keep their affairs to themselves. 

Monero, Zcash, and Beam are three of the most popular privacy-centric cryptocurrencies. Crypto investors who are focused on the privacy features of a digital currency will probably contemplate buying into any or all of these three. So, which one should you go for in terms of scalability and confidentiality?

In this article, we’ll have an in-depth look at how the three altcoins compare. But first, how about a little background on them?  

Monero

The cryptocurrency, launched in 2014 under the name BitMonero, relies on a technology called Cryptonote. It is a Proof of Work algorithm different than that of Bitcoin. In order to make the operations on its blockchain anonymous, the method adopted is that of the “Ring Signatures.”

It is a digital signature that can be created by anyone and in which each user has the key. A person can then put the electronic signature anonymously in a message or document on behalf of a “circle” of users. The members of the “circle” are chosen by the author of the signature and are not necessarily informed about the operation.

The strength of Monero (XMR) is therefore based not only on decentralization but also on its secrecy, which allows carrying out transactions that are theoretically untraceable by an external agent. If, for example, bitcoin operations are publicly recorded on the blockchain, in the case of Monero’s ledger, the information is not accessible to everyone

Zcash

Zcash (ZEC) defines itself as “If Bitcoin is like HTTP for money, Zcash is HTTPS,” underlining its enhanced security and privacy features. Zcash has implemented a cryptographic tool called Zero-Knowledge Proof and grants participants an option to shield transactions. It allows participants to transact without any of them revealing their addresses to the other(s). Zero-Knowledge Proof also obfuscates the transaction amount. Zcash ranks at number 42 in the list of cryptocurrencies with a market cap of $654 million and trading at $60.50 per ZEC as of December 24, 2020.

Beam

Beam is a security-focused token with core features that include complete control over your privacy. All transactions are private by default and no addresses or other private information are stored on the blockchain. It claims superior scalability due to its compact blockchain size, opt-in auditability, support for online and offline transactions, atomic swaps, and hardware wallet integration. As of December 24, 2020, Beam tokens were trading at $0.28, with a total market value of $21.9 million, making it the 294th most valuable cryptocurrency.

Confidentiality Comparison

Monero

Monero enables confidentiality by using Ring Confidential Transactions (a combination of Confidential Transactions and Ring Signatures) and Stealth Addresses. In addition, Kovri (currently in pre-alpha) is used to obfuscate peer-to-peer communication. Confidential Transactions hide the transferred amounts. With Ring Signatures, at least six “decoy” coins are added to each transaction, each looking equally likely to be the actual one spent in the transaction, thus making the actual source and destination next to impossible to trace. That said, there are certain claims (see this study, for example) stating that there are ways to trace transactions on the Monero network. We do not aim to confirm or contradict those claims.

ZCash

Zcash uses zk-SNARKs — a novel and very advanced form of zero-knowledge cryptography. Some people call zk-SNARKs “Moon Math” — that’s how arcane and presumably beautiful they are. With zk-SNARKs, all transaction amounts, inputs, and outputs on the blockchain are entirely hidden. However, transactions on Zcash are not private by default. Since zk-SNARKs are computationally heavy to create (it takes 1–3 minutes on a regular PC to create a private transaction on Zcash), most users do not enable them, hurting the overall privacy of the network. At the time of writing, the percentage of fully shielded (i.e., entirely private) transactions on Zcash is below 1% (see here).

The upcoming Sapling network upgrade should make the performance of shielded transactions much more efficient, and hopefully, increase the amount of private transactions on the Zcash network.

In addition, zk-SNARKs require a special secret key to set up the entire system. If this key leaks, the perpetrator can print money and thus destroy the coin. Zcash carries out intricate multi-person ceremonies to create this key, and we have no reason to doubt the integrity of the people involved. However, this is still a valid concern.

Beam

BEAM is built on Mimblewimble, a very elegant protocol that allows for both confidentiality and scalability. Transaction amount, sender, and receiver are hidden using Confidential Transactions, and there are no “addresses” in the system — each user just holds private keys to the UTXOs she owns.

Privacy in BEAM is enabled by default. Actually, there are no “open” transactions at all. Reading the blockchain would not yield any information to the observer.

In addition to Mimblewimble’s default privacy, BEAM also implements Dandelion, a networking policy that significantly improves anonymity. Dandelion prevents someone from observing the network traffic to infer any valuable information.

Scalability Comparison

Monero

Due to the use of Ring Signatures, additional data is attached to each transaction, significantly increasing the size of the blockchain. At the time of this writing, Monero blockchain size is around 48GB and will continue to grow with wider adoption, hurting usability. We estimate that in Monero, the size of an average transaction is about 14Kb which is almost 25 times greater than in Bitcoin. Simply put, when Monero reaches Bitcoin’s current scale concerning the total number of transactions, its blockchain will be about 5 terabytes — hardly sustainable for a regular PC, let alone on smaller devices. It should be noted that Monero team is currently implementing bulletproofs that should improve scalability by up to 80% (which is still about 5 times more than Bitcoin)

ZCash

At the time of writing, Zcash blockchain size is around 19GB, while the total number of transactions is approximately 3.5 million, giving an average of 5.3KB per transaction — almost 9 times higher than Bitcoin. While it is better than Monero, it is still much heavier than Bitcoin, which is also not scalable enough in that respect

Beam

In BEAM, the Mimblewimble cut-through mechanism is used to keep the blockchain small. The cut-through removes all the intermediate states of UTXOs, essentially leaving only unspent outputs on the blockchain. Thus, the blockchain size does not grow with the number of transactions, but with the number of UTXOs, which is overall much slower.

We estimate that BEAM Blockchain size will be around 30% of Bitcoin’s, so the blockchain size should be below 70GB when BEAM reaches Bitcoin’s scale, making it possible to run a full node on smaller devices. We are actively researching additional improvements to Mimblewimble to make the blockchain even smaller (see Eliminating Transaction Kernels).

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Cryptocurrencies

Breaking down ZCash

The first-ever blockchain, Bitcoin, is pretty much an open ledger where all and sundry can see your transactions, and those transactions can be traced back to you, if need be. While this level of transparency is partly what endeared many to Bitcoin, it is not amenable to the notions of privacy that are increasingly prevalent in today’s world.

Is there a way we can take advantage of blockchain technology without sacrificing privacy? Several cryptocurrencies intending to answer that very question have sprung up in recent years. Zcash, a crypto-based on the Bitcoin code base, is one of them.

This article scratches beneath the surface of this privacy coin to look at how it works, who created it, and how it stacks up against other cryptocurrencies in terms of performance.

What is Zcash?

Zcash is a decentralized, peer-to-peer, and privacy-focused cryptocurrency. It is based on the Bitcoin code and was launched in October 2016. It was first called the Zerocoin protocol, then the Zerocash system before finally going by the name Zcash.

Zooko Wilcox, the founder of Zcash, describes it as “another blockchain and cryptographic money which permits private exchanges (and by and large private information) in an open blockchain. This permits organizations, buyers, and new applications to control who gets the chance to see the points of interest of their exchanges, even while utilizing a worldwide, authorization-less blockchain.”

The Team behind Zcash

Zcash is the product of a mix of engineers, scientists, and designers around the world. In the team are graduates from some of the leading universities from around the world, including MIT, Johns Hopkins, and Tel Aviv University. The team’s leader and also founder OF Zcash is Zooko Wilcox, who has 20+ years of experience in open and decentralized systems as well as cryptography.

There’s also the Zcash Foundation, a non-profit whose mandate is maintaining and constantly improving the Zcash protocol to accurately represent the interests of current and future users as well as the community. The foundation was launched in 2017.

How Zcash Works and Its Privacy Model

Zcash works by encrypting transaction details via zk-SNARK – a zero-knowledge proof protocol. Before we talk about zk-SNARK, let’s first get an idea of what zero-knowledge proof is.

What is Zero-Knowledge Proof (ZKP)

 The concept of zero-knowledge proof harks back to the 1980s when 3 MIT researchers – Shafi Goldwasser, Silvio Micali, and Charles Rackoff were working on interactive proof systems, and they stumbled on the idea of having knowledge of proof without revealing that knowledge.

The zero-knowledge proof concept has two parties: the prover and the verifier. A prover can prove to the verifier that they possess certain information without revealing what that information is. A ZKP must possess the following parameters:

  • Completeness: The statement must be true so that a verifier can be convinced of it without proof
  • Soundness: The statement must be true in a way that a lie in its stead would not convince the verifier
  • Zero-knowledge: The verifier has no idea what the information is

What is Zk-Snarks?

Zk-Snark stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.” Zk-Snarks are mathematical proof constructs that see to it that a transaction takes place without its details being divulged. These details include sender, recipient, and amount. Zk-Snarks also plays the role of preventing double-spending.

The Problem with Bitcoin’s Transparency

Bitcoin is the first cryptocurrency and one that a lot of cryptocurrencies are modeled after. On the Bitcoin blockchain, the world can see the details of transactions that took place, such as the public key. This transparency is a welcome idea, especially when preventing criminal activity from being conducted using the currency. But it’s also the crypto’s pitfall, especially in modern times when privacy is highly valued and protected.

Businesses also have the need to keep their most sensitive information away from the eyes of competitors and other interested parties. Companies also want to keep employee information, including salaries, from other employees and the public in general. Both these scenarios are not possible on the public Bitcoin blockchain.

Zcash’s Selective Disclosure

On the Zcash platform, transactions can either be “transparent” or “shielded.” Transparent transactions happen through the t-addr, or ‘transparent addresses while shielded addresses happen through the z-addr, or the zero-proof address. This is what’s referred to as “selective disclosure” of Zcash transactions. Users can choose whether to send funds using transparent or shielded addresses. Usually, a user can send funds publicly to a private address and vice versa.

This selective disclosure affords users the choice to comply with industry, tax, and legal obligations when and if required. For example, a user can prove that they own at least a thousand dollars without revealing the exact amount. As well, you can use this feature to comply with auditing requirements by providing payments.

Tokenomics of Zcash

Zcash is a fork of Bitcoin and has the same maximum supply of 21 million as Bitcoin. Zcash’s coins will all be mined by 2032, and block rewards get halved every four years as a deflationary measure. As of March 3, 2020, Zcash is trading at $51.85 with a market cap of $478, 526, 912, and #27 ranking. Its 24-hour volume is $370, 092, 058, and it has a circulating supply of 9, 228, 331, and a total supply of the same value. Zcash has an all-time high of $5, 942.80 on October 29, 2016, and an all-time low of $25.45 on November 25, 2019.

Where to Buy and Store Zcash (ZEC)

You can purchase ZEC from these exchanges, among other popular ones: Coinbase, Cointree, Gemini, Bithumb, Kraken, Huobi, YoBit.Net, Changelly, and etoro. Some exchanges will allow you to buy directly with fiat currency, while others will require you to first purchase Bitcoin or another crypto such as Ethereum to trade it for Zcash.

You can store your ZEC on the Linux command line client wallet known as zcashd. This option is good for you only if you know your way around computers or are sufficiently tech-savvy. There’s also a desktop wallet by the Cash foundation that supports Linux, Windows, and Mac. Other desktop options include Jaxx and Exodus.

If you’re more into hardware wallets – and you should – since they’re the safest option, you’re in luck because user favorites such as Ledger and Trezor both support the coin.

The Bottom Line

Zcash is a cryptocurrency that provides the decentralized, peer-to-peer model of transactions while keeping them private. Users, businesses, and organizations looking to combine the benefits of blockchain technology with privacy are right at home with Z-cash. They also get to comply with regulations without giving everything away. Zcash offers the world the benefits of blockchain without sacrificing their privacy. And with the world valuing privacy more than ever, Zcash is set to move only forward.

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Crypto Market Analysis

Daily Crypto Review, Jan 30 – Crypto market consolidating; Japan heavily into cryptocurrencies

The crypto market is consolidating after a few days of making gains. Bitcoin’s price went down 0.25% on the day. It is currently trading for $9,311. Meanwhile, Ethereum lost 1.33% on the day, while XRP went down 1.96%.

Zcoin took today’s most prominent daily gainer title with gains of 33.92%. On the other side, Crypterium lost 9.30% on the day, which made it the most prominent daily loser.

Bitcoin’s dominance increased slightly in the past 24 hours. It is now at 66.62%, which represents an increase of 0.49% when compared to the value it had yesterday.

The cryptocurrency market capitalization lost a bit of its value in the past 24 hours. It is currently valued at $253.32 billion, which represents a decrease of $3.74 billion when compared to yesterday’s value.

What happened in the past 24 hours

Nomura Research Institute, the Leading Japanese consulting firm, partnered with the cryptocurrency investment solution provider Intelligence Unit to launch a tradable cryptocurrency index.

The new index’s name is NRI/IU Crypto-Asset Index. The index is meant to be used by financial institutions. The NRI/IU also draws data from the cryptocurrency index platform MVIS as well as the major cryptocurrency data platform CryptoCompare.

Honorable mention

Zcash

The community decided to support Zcash mining reward changes, as the blog announcement stated. Zcash, by using Telegram and Twitter, questioned the coin’s community on how the miners should be paid out.

As Zcash mining halving happened in November, the new mining reward distribution will change to:

  • 80% for miners;
  • 7% for the Electric Coin Company;
  • 5% for the Zcash Foundation;
  • 8% for grants.

This change will take effect in November 2020.

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Technical analysis

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Bitcoin

Bitcoin looks like it is starting to consolidate after a few days of making constant gains. The largest cryptocurrency went above $9,000 and stayed above it for some time now. The price is fluctuating above $9,300 at the moment, with the closest support being at $9,251 which is holding extremely well. On the other hand, the next resistance level stands at $9,585.


Bitcoin’s RSI fell below the oversold territory while its volume is slowly descending.

Key levels to the upside                    Key levels to the downside

1: $9,585                                           1: $9,251

2: $9,732                                           2: $9,120

3: $10,000                                         3: $8,905


Ethereum

Ethereum followed the market but fell more than Bitcoin in the past 24 hours. The price did not break any resistance or support levels but rather went to the middle of the range. Its closest support is currently at $167.8, while its closest resistance level is at $178.5.


Ethereum’s volume is slowly descending, while its RSI is currently in the higher end of the value range.

Key levels to the upside                    Key levels to the downside

1: $178.5                                             1: $167.8

2: $185                                               2: $164

3: $193.6                                            3: $160


Ripple

Out of the top3 cryptocurrencies, XRP did the poorest. This is not only due to it being the cryptocurrency which lost the most value, but also because it is the only cryptocurrency (out of the top3) that dropped below its immediate support level. XRP managed to fall under the $0.235 support line and stay below it for some time in the past 24 hours. However, the price is now gaining momentum to the upside, and XRP is currently right on the line. Therefore, a $0.235 line can be considered a pivot point rather than a support or resistance level at the moment.


XRP’s volume is average, while its RSI level is just above the middle of the value range.

Key levels to the upside                    Key levels to the downside

1: $0.2454                                          1: $0.235

2: $0.266                                            2: $0.227

3: $$0.285                                          3: $0.221

 

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Crypto Videos

Is Your Cryptocurrency Anonymous? How To Ensure It Is!

 

Anonymity in cryptocurrencies

Confidentiality and privacy (financial and in general) are becoming more and more important nowadays as the world has pretty much given up on privacy with the expansion of the internet. Cryptocurrencies have given users an option to protect their financial privacy. These cryptocurrencies are based on cryptographic protocols that act as security methods. By utilizing these protocols, all the transactions are safe, irreversible, and do not contain any personal information whatsoever.
Privacy and anonymity are one of the most important factors that lifted cryptocurrencies in the eyes of potential users. However, we have to make a distinction between “anonymity” and “pseudonymity” and what they represent, as well as which cryptocurrencies possess these features.
Simply put, anonymous transactions are transactions that can’t be connected to any person/user. But are cryptocurrencies anonymous?

Bitcoin’s anonymity

Bitcoin is often described as anonymous because people can send and receive transactions without actually revealing their identity. However, the truth is a bit different.
Even though Bitcoin does not tie an identity to a person, all Bitcoin transactions are stored publicly and permanently on the Blockchain. This means anyone can see anyone’s balance as well as transactions. Even the identity of the user behind an address can be cracked down if an address is used to purchase goods or services outside the “system.”
Most blockchains aren’t truly anonymous but rather pseudonymous, and that includes Bitcoin. Transacting in Bitcoin is like writing under a specific pseudonym. If the pseudonym is ever tied to one of the transactions, everything done under that pseudonym is also tied to the account.

People may say that full privacy is what they want, but pseudonymity and having no anonymity is exactly the argument against people saying that Bitcoin can be used for illegal transactions. However, if full and complete privacy is required, then people should turn to a branch of Cryptocurrency called “privacy coins.”
Private cryptocurrencies
Unlike Bitcoin, every transaction involving so-called “privacy coins” obscures the digital addresses of the sender and the receiver. Not only that, but the network also obscures the value of the transaction. This feature offers privacy coin users near-total anonymity.
We will cover a few privacy coins with the biggest market capitalization to show what they have to offer to the market:
Monero;
Dash;
Zcash.

Monero

Monero is the biggest privacy coin by market capitalization. This is most likely due to a lot of people believing that this cryptocurrency is the most anonymous coin on the market. Monero is based on CryptoNote, a privacy protocol that implements ring signatures which obfuscate payments in order to ensure anonymity when both are sending and receiving funds.
However, throughout time, Monero has evolved far beyond CryptoNote. The development team behind Monero combined CryptoNote’s ring signatures with Greg Maxwell’s Confidential Transactions to create Ring Confidential Transactions (RingCTs), which only obscure senders but also hide the transaction amount. Monero is constantly improving and implementing new features, such as giving its users the option to hide their IP address and geographic location through garlic encryption and routing.

Dash

Dash, previously known as Darkcoin, came to life as a fork of Bitcoin in 2014. Even though Dash includes privacy features, this cryptocurrency also tries to achieve other features such as Portability, Inexpensiveness, Divisibility, Speed.

When talking about Dash’s privacy features, its users have two options. Dash gives you the option to send funds PrivateSend or through a regular network. PrivateSend implements a feature called “CoinJoin,” which mixes the sent funds with other people’s PrivateSend funds before sending them to the recipient. The coins that a recipient receives are not in any way associated with the wallet from which the transaction was initiated.

Zcash

Zcash is another extremely popular private cryptocurrency. It utilizes a feature called Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge (or simply zk-SNARKs). Zk-SNARKs validate the transaction without ever having to reveal the details of the transaction. This feature makes it possible to send ZEC, Zcash’s currency, while the sender’s address, the recipient’s address, as well as the amount is never compromised or revealed.
Even though Zcash developers built this cryptocurrency on the original Bitcoin code base, these two cryptocurrencies have very little in common today. One significant difference between Bitcoin and Zcash is that Zcash is run by a for-profit company called the Electric Coin Company. This company receives 10% of all the mining rewards, which is regarded as a “Founder’s Reward.” These funds are then used to support further development of the project.

Conclusion

It’s no secret that Bitcoin isn’t actually anonymous, despite what various public figures might claim. Its pseudonymity makes its transactions vulnerable to being tracked by governments and intelligence agencies. However, Bitcoin’s privacy features are steadily increasing.
With Bitcoin’s improving privacy, it is possible that cryptocurrencies such as Monero, Zcash, and Dash may become obsolete. This will, however, happen only if Bitcoin offers anonymity alongside with superior store of value.

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Crypto Market Analysis

Zcash – Sell A Retest

Zcash (ZEC)

Market Cap: $947.69

Circulating Supply: 3.89M ZEC

Max Supply: 0 ZEC

Volume (24h) $60.13M

 

ZEC/USD dropped significantly in the last days as expected. The current drop is somehow natural after the false breakout above the downtrend line and after the failure to approach and reach the 50% Fibonacci line again.

The cryptocurrencies are into a down move again after the short-term rebound. Please read my analysis on this crypto (Zcash breakout still in cards) and you’ll notice that I’ve said that the rate will maintain a bullish perspective only if it will stay within the ascending pitchfork’s body, and if it will make a valid breakout from the chart pattern.



 

The false breakout above the downtrend line has invalidated a further increase and has signalled a reversal on the short term. ZEC/USD is pressuring the lower median line (LML) of the ascending pitchfork. The breakdown needs confirmation, so only a retest of the broken dynamic support will confirm a further drop.

The price could make a sharp drop from now, but it should turn back towards the LML to retest it. A great selling opportunity will appear after a retest of the LML and maybe after a false breakout above the LML followed by a significant drop.

ZEC/USD is expected to drop further if the other major cryptocurrencies will resume the bearish movement.

Conclusion

ZEC/USD is under massive selling pressure and could reach fresh new lows without a retest of the broken LML. You’ll have a great selling opportunity if the rate will come back to retest the broken dynamic because you could place your Stop Loss above a lower high. The next downside target will be at the 173.02 and at the 150% Fibonacci line.

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Crypto Market Analysis

Zcash Breakout Still In Cards

Zcash (ZEC)

Market Cap. $1.12B

Circulating Supply:3.79M ZEC

Max Supply: 0 ZEC

Volume (24h) $ 64.10M

 

The ZEC/USD dropped today and erased some of the yesterday’s gains. Price remains under pressure after the last false breakout and because is still trapped below some crucial resistance levels. The has found a temporary resistance, but we could see another breakout attempt soon.

Zcash rose by 4.17% today and by 10.80% in the last 7 days. We need a confirmation that the crypto will start a larger upside movement.

Zcash (ZEC) chart

The rate is trapped within a Falling Wedge pattern after the false breakout above the upside line of this pattern. ZEC/USD has also made a false breakout above the 23.6% retracement level and above the 50% Fibonacci line (ascending dotted line), so the minor decrease is natural.

It will drop towards the lower median line (lml) of the ascending pitchfork if the downtrend line will hold. A valid breakout above the upside line of the chart pattern will signal a further increase, but only a valid breakout above the 50% Fibonacci line will confirm a sharp increase in the upcoming weeks and months.

The ZEC/USD further increase could be invalidated only if the rate will drop and will stabilize outside the ascending pitchfork’s body.

Conclusion

We may have a buying opportunity after the breakout above the downtrend line and above the 23.6% retracement level, but only if the rate will stay above the lower median line (LML) of the ascending pitchfork. The next major upside target will be at the median line (ML) of the ascending pitchfork.

©Forex.Academy