ZenCash – A Private Network
At Blockwolf we tend to like dynamic products that serve multiple purposes. Ethereum, Neo, and Icon are examples of networks that will grow as other cryptocurrencies are built on those platforms. Coins that offer private payments such as Dash, Monero, and Zcash, have proved the importance of privacy in the crypto space but they stop there as simple payment coins. ZenCash has greater ambitions.
What is it?
ZenCash provides a privacy-oriented infrastructure with a governance system structured to enable participants to collaboratively extend functionality in many dimensions. ZenCash’s whitepaper lists opportunities such as hosting of individual identification data, selective proof of title for property, decentralized banking services, privacy-preserving p2p/b2b asset exchange, mutual aid societies, p2p insurance, decentralized humanitarian aid mechanisms, or use purely as an anonymous token of value.
Although opportunities are important, ZenCash’s fundamental elements focus on private transactions, private messages, and private publications. These are broken down into Z_transactions, ZenTalk, ZenPub, and ZenHide
Z_transactions are used to anonymously send private amounts of money.
The Z_transactions in ZenCash have the ability to incorporate text-based messages, which are encrypted and included in the blockchain with a 1024 character limit. Instead of discussing the transaction in other less-secure channels, users can communicate via the ZenTalk messages with the other party or parties before and after the transfer takes place with very small Z_transaction spends. These messages can be sent directly from one to another but they can also be sent to a channel. By generating a z_address from the hash of a channel name, users can subscribe to the channel and read anything published by anyone to the channel.
Zen can publish documents to the IPFS or GNUnet. By creating an anonymous messaging layer in conjunction with an anonymous publishing layer, ZenPub allows for the creation of truly anonymous publications which can be rapidly distributed to interested readers.
It is possible for regulators in countries hostile to crypto-commerce to block traditional crypto-currencies like Bitcoin. Zen uses Domain Fronting to extend the ability to complete transactions in adversarial network environments. Domain Fronting is a censorship circumvention technique that hides the remote endpoint of a communication. This technique uses HTTPS to communicate with a forbidden host while appearing as what a censor would deem as a permissible host.
3.4 billion people do not have freedom of speech and can benefit from anonymous publishing
Secure Nodes maintain the full ZenCash blockchain and ensure all network communications are encrypted. Secure Nodes provide a resilient, distributed network. If one’s computer meets certain requirements and they own at least 42 ZenCash, they can create a Secure Node.
Zencash is unique in that only 88% of mined block rewards go to miners. 3.5% of block rewards are split evenly between all secure node holders. 8.5% of block rewards are used as treasury funds for development, support, and marketing. Growing a crypto currency requires a lot of capital. The 8.5% reward will give the core team and developers capital to scale the cryptocurrency.
Cryptocurrencies face a governance issue that undermines long term sustainability. Developers, miners, and users have different motives. Those motives lead to arguments that sometimes lead to a fork. A fork is a change in a protocol that makes a single cryptocurrency split in two. From a developer’s standpoint, forks cause teams to split and become less efficient. Zencash uses ideals from Bitcoin, Dash, Decred, and Seasteading to ensure that its governing system works effectively and has a minimal chance of forking. Proposals for Zencash are voted on every two months. 1440 Votes are split between ZenCash holders (25%), ZenCash project developers (17%), exchanges (4%), mining pool owners (4%), secure node holders (25%), decentralized autonomous organizations (8%), and the core team (17%). Zen’s core members believe that this voting system will lead to feedback and evolution that will offer a competitive advantage over other cryptocurrencies. Along with their governance model, Zen communicates through their blog every two weeks.
ZenCash collaborates with Input Output Hong Kong (IOHK), which is a leading research and development company that operates Cardano (ADA). IOHK will evaluate multiple protocol options and provide recommendations and specifications to ZenCash by Q2 2018. At the time of writing this, Cardano has the 5th biggest market cap for any cryptocurrency. If Cardano wants to adopt a private currency, ZenCash would be its first currency to work with. Any public endorsement from Cardano would be a powerful mover for Zencash.
Zencash’s supply details roughly follow Bitcoin’s supply. There will eventually be 21 million coins and the mining block reward will cut in half about every 4 years.
Zen offers more than just a private currency through its Zenpub and Zenhide, but their real advantage comes from their governance system, unique block reward system, and partnerships. Zen is designed for a long-term operation with a focus on research and development. We think that some private cryptocurrencies will resemble fads while Zen will gradually grow over time.
How to acquire
ZenCash is only available on Bittrex and Cryptopia right now for American users. We think ZenCash will increase in value once it hits a bigger exchange like Binance. However, for now you have to create a Bittrex or Cryptopia account to buy Zencash. As of the time of writing this, Bittrex registration is closed, so we use Cryptopia. Register on Cryptopia’s website, send cryptocurrency to your Cryptopia as you would with your Binance account, and place an order to buy ZenCash. Please visit our Cryptopia guide along with this report if you need assistance with Cryptopia.