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Zerocoin is a project to fix a major weakness in Bitcoin: A collaboration between the the original Zerocoin project members and cryptographers at MIT, The Technion, and Tel Aviv University, has produced a far more efficient protocol that allows for direct private payments to otherusers of hidden value. For disambiguation, we refer to this new protocol as Zerocash, and detail its technical underpinnings here.
The Bitcoin payment network offers a highly decentralized mechanism for creating and zero cash decentralized anonymous payments from bitcoin news electronic cash around the world.
Unfortunately, Bitcoin suffers from a major limitation: Worse, since the Bitcoin ledger is public, any party can recover this information and data mine to identify users and patterns in the transactions. Bitcoin transactions are conducted in public. The Bitcoin protocol and clients address this in two ways: Unfortunately, a growing body of research indicates that these protections are insufficient.
This information may allow data miners to link individual transactions, identify related payments, and otherwise trace the activities of Bitcoin users. Laundries suffer from a number of potential drawbacks, however, as they must be trusted to return coins. Moreover a compromised or malicious laundry offers no anonymity. Zerocoin and the Zerocash protocol operates in the Bitcoin network and is implemented as a series of extensions to the existing Bitcoin protocol. This approach means that Zerocoin can be deployed without relying on a central coin issuer or bank as used in previous e-cash schemes.
Moreover, since no single trusted party operates the Zerocoin system, attacks on Zerocoin must take on a substantial fraction of the Bitcoin network. The Zerocash protocol uses provably secure cryptographic techniques to ensure that Bitcoins cannot be traced. These techniques allow users to conduct transactions on the Bitcoin network while receiving strong mathematical guarantees that the transactions cannot be traced. These guarantees remain in place even if a portion of the Bitcoin network is compromised by an attacker.
Other anonymous cash systems rely on distributing the work of anonymizing users amongst a set of parties. Because Zerocoin is built on top of Bitcoin, it is widely distributed among all the Bitcoin peers, ensuring that the system can remain available even when many nodes are compromised. With the new Zerocash protocol, unlike the old Zerocoin protocol, users can make direct payments to each other with a vastly more efficient cryptographic protocol that also hides the amount of the payment, not just its origin.
With the new Zerocash protocol, Zerocoin allows direct anonymous payments between parties. Zerocoin transactions exist alongside the non-anonymous Bitcoin currency. Each zero cash decentralized anonymous payments from bitcoin news can convert non-anonymous bitcoins into anonymous coins, which we call zerocoins. Users can then send zerocoins to other users, and split or merge zerocoins they own in zero cash decentralized anonymous payments from bitcoin news way that preserves the total value.
Users can also convert zerocoins back into bitcoins, though in principle this is not necessary: For a more detailed explanation of the new Zerocash protocol zero cash decentralized anonymous payments from bitcoin news the website for Zerocash protocol.
The plan is to make an altcoin, powered by the new Zerocash Protocol, that provides consumers with the financial privacy they expect from debit cards, credit cards, and cash. To do this, we plan on release a working, non research code quality client based off the bitcoin 0. Created by Ian Miers imichaelmiers. Zerocash, the protocol that succeeded Zerocoin, is being developed into a full-fledged digital currency, Zcash.
