Privacy coin Zcoin came out with Sigma, its live zero-knowledge proof (ZKP) protocol that includes financial privacy, but not a trusted setup.
Zcoin explained that it will be phasing out of the original Zerocoin protocol, while implementing Sigma, with the aim to tackle “a privacy coin vulnerability”, which could leave space for bad actors to create countless counterfeit coins.
Zcoin finds that, unlike the majority of cryptocurrencies, Bitcoin included, which “only offer psudonymity”, as well as non-ZKP privacy coins that only obscure the links between addresses but not break them, ZKP protocols offer the "highest level of anonymity" at the moment through a burn and redeem process. Its widespread adoption was prevented by trusted setups and complicated constructions, Zcoin says. On the one hand, attackers could use a failure to correctly destroy a trusted setup to create counterfeit privacy coins and inflate the supply. On the other hand, current deployed ZKP protocols often use highly complex cryptographic constructs that are difficult to understand, “making them prone to unseen errors.”
Poramin Insom, Founder and Core Developer of Zcoin, said that these are the two issues Zcoin wanted to tackle upon its launch. “Trusted setups go against the fundamental principle of blockchain which is “don’t trust, verify” and Sigma offers the first compelling alternative to solve all these issues.”
The new ZKP protocol was coded from scratch, and it’s aimed at solving the mentioned concerns through the following points:
- It’s the first mainnet deployed privacy protocol using the burning and redeeming mechanism that does not require trusted setup
- Sigma’s protocol doesn’t use experimental cryptography, but relies only on “well-established and standard cryptographic assumptions”
- Sigma’s performance has proof sizes of ~1.5 kB (17 times smaller than Zerocoin’s 25 kB) and low verification times that can be aided by batch verification techniques, stands in the announcement.
Since Sigma upgrade is a hard fork, users need to download a new version of Zcoin, thus updating their wallets. Users also have six months to redeem unspent mints from the previous Zerocoin protocol for new Sigma mints. Sigma too has its eventual replacement, which is already being developed – a new anonymous payment system, Lelantus. It is an independent innovation by Zcoin, which is aimed at additional improvement of Sigma’s capabilities “by removing the need of fixed denominations and hiding transaction values.” Lelantus is scheduled to go on testnet in early 2020.
At pixel time (11:46 UTC), zcoin (XZC), which is ranked 83rd by market capitalization, trades at USD 8.96 and is downy by 0.6% in the past 24 hours and by more than 6% in the past week.