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Recently, Bill Gates said the following phrase - "The main feature of cryptocurrencies is their anonymity." Today we can already say that this is nonsense. Why?
We previously published an article on how Silk Road users are calculated by analyzing Bitcoin transactions on the blockchain. In fact, most cryptocurrencies are not as anonymous as the average user imagines. The fact is that the blockchains of all coins are public, ie open. As in the case of Bitcoin, it is possible to carry out a comprehensive analysis of transactions in order to identify users of the cryptocurrency. By the way, in this sense, the Monero cryptocurrency differs, in the blockchain of which all transactions are private by default . However, other "anonymous" coins, such as Zcash and Zclassic, are in fact so beautiful and do not provide the declared confidentiality.
Zcash and Zclassic - what's wrong with them?
Like Zcash and Zclassic - both coins imply private transactions carried out through the so-called "zero knowledge proof" - an interactive cryptographic protocol that allows one of the interacting parties ("The verifier" - verifier) to verify the authenticity of any statement (usually mathematical), without having any other information from the other side ("The prover" - proving). Within the framework of Zcash and Zclassic, this protocol was called zk-SNARKS.Executing a private transaction, of course, requires much more computational power than an ordinary, transparent transaction hosted in an open ledger. It can take more than 40 seconds and more than 3 gigabytes of RAM for Zcash or Zclassic miners to create an anonymous transaction. Users of this cryptocurrency claim that not all private transactions are private, because this loads the network very heavily and that is why Zcash and Zclassic, or rather their blockchains, are simply not able to service all anonymous transactions due to their growing number. Some Zcash wallets don't even support private transactions. The Zcash developers hope to make a difference in the future.
A little about Zcash
Zcash was created in 2016 by Zerocoin Electric Coin. Having developed as a fork of the cue ball, the coin was strongly promoted by various resources as an anonymous and fast alternative to bitcoin, as a result of which it gained popularity. The volume of the issue is the same as that of Bitcoin - 21,000,000 coins.In a blog post, the Zcash developers said they very much hope that all transactions will be private in the future. The next update promises faster transaction processing, which will possibly improve the situation, which is simply deplorable.
Study
According to a study by Alex Vikati and Edwin Ong, 85% of Zcash transactions are transparent , traceable and public. Of the remaining 15% of private transactions, only 7% are in reality private.If we talk about Zclassic, then it has a similar situation - about 69% of transactions are public. Researchers have found that real private transactions in the classic blockchain are about 16%, and "private" (which have become transparent) - about 15%.
The researchers also found that despite the increase in the total number of transactions in both Zcash and Zclassic, the percentage of private transactions dropped over the past year from 32% in February 2017 to 11% in February 2018.
A recent hard fork of both Zclassic and Bitcoin, known as Bitcoin Private, also uses zk-SNARKS to carry out private transactions. Bitcoin Private probably also has the most transparent transactions and suffers from the same issues as Zcash and Zclassic. Cryptocurrencies that use zk-SNARKS must rely on reliable setup. With a secure setup, the creators of cryptocurrencies like Zcash, Zclassic, and Bitcoin Private had to generate a master private key. Cryptocurrency users who use zk-SNARKS must trust that the developers of the coin are not lying when they say they destroyed the key. And who knows how it really is?
