STEEMIT CRYPTO ACADEMY SEASON 2 WEEK 8: PRIVACY COIN BY @levycore

Hello everyone,

Thanks to @levycore for the simple and straight forward lecture. below is my homework task for this week.

https://pixabay.com/illustrations/security-castle-sure-internet-1202344/

PRIVACY COIN

Cryptocurrencies that operate in a private manner are known as privacy coins. They're private since the origin and destination of transactions are usually hidden. They don't provide the precise address to which a coin is being transmitted to the general public. This level of privacy is only available during transactions. Private coins are able to remain private by combining many accounts so that they are difficult to trace. Unlike bitcoin and other non-privacy block chains, which make it easy for anybody to figure out who owns a wallet, privacy coins hide the true identity of a transaction and ensure that it is untraceable by third parties that might want to use block chain analysis to figure out who owns a wallet.

HOW DO THEY MAINTAIN PRIVACY?

They employ the following methods to attain their goal of anonymity and untraceability:

• Address secrecy: ensures that a sender establishes a new address for each new transaction, preventing the sender and receiver from becoming linked.
• CoinJoin: They combine transactions from several individuals to generate a single transaction, which is then used to distribute coins to numerous users via a new address.
• Zk-SNARKS allows cryptocurrency holders to verify the legality of a transaction without having access to the parties' identities or account balances involved.

LIST OF SOME PRIVACY COIN

• monero
• Zcash
• Dash
• Beam
• Horizen

For the purpose of this homework, I will be talking about ZCASH

QUESTION 1: CHOOSE A PRIVACY COIN AND PERFORM A FUNDAMENTAL ANALYSIS OF THE COIN IN DETAILS.

https://z.cash/press/

ZCASH

It's a decentralized coin that runs on a private block chain. Though it resembles bitcoin in certain ways, it is more fungible and private than Bitcoin. In October28 2016, Zooko Wilcox-O'Hearn discovered Zcash in his endeavor to meet the desire of consumers who desired an open banking system with a lot of privacy characteristics.The bitcoin block chain was forked into Zcash, which was originally known as Zerocoin protocol, then Zeocash system, and eventually Zcash.

TOKEN

The digital token of the Zcash network is known as Zcash(ZEC) or ZEC coin. The Zcash block chain keeps track of all Zcash Network transactions and balances. Its smallest unit is the "zatoshi," which is equivalent to 10-8ZEC. The fungibility of ZEC is what makes it so special. It can be bought on a crypto currency exchange and saved in either a Zcash or a Crypto wallet.

PRIVACY TECHNOLOGY

It makes use of a cryptographic tool known as ZK-SNARKS (Zero knowledge proofs) with the help of which users who perform transactions are unable to identify their payment addresses, because these coins from various users are combined and then sent using a single address. As a result of this method, tracing the path of either sender or receiver becomes extremely difficult.

SUPPLY

Its supply may be traced back to prior supply, which is fixed at around 21 million ZEC and is tied to Zcash mining. In the Zerocash protocol, its supply is firmly guarded or encircled.The total number of ZEC in circulation is around 9960781.

PRICE

The crypto market dynamics and other significant economic factors are used to forecast its price.1ZEC is currently worth $167.68 at the time of this assignment.

ALGORITHM

It employs the equihash algorithm, which necessitates a large amount of RAM.

TRANSACTION TYPES

It supports 4 major transaction types;
• private transaction
• Deshielding transaction
• shielding transaction
• public transaction

• PUBLIC TRANSACTION
  It occurs when two "t" addresses are used together (t-transparent). The amount sent by a user is made public on the Zcash block chain when they send ZEC.

• DESHIELDING
  It occurs when a "z" address is followed by a "t" address. The balance of the "z" -address is kept private, but the amount sent out and the balance of the "t" address's receiver are made public.

• SHIELDING
  This happens between the "t" and "Z" addresses ( Z-shielding). In this scenario, the "t" address's balance and amount transferred are made public on the Zcash block chain, but the balance of the "Z" address's receiver is kept hidden.

• PRIVATE
  It can be found between two "Z"-addresses. Their account balances, as well as the amount exchanged or sent between them, are kept private.

COMPARISON BETWEEN ZCASH AND BITCOIN

It is relatively easy for a user to see the whole history of a coin as well as the balance of a specific user's wallet in Bitcoin; nevertheless, it is exceedingly difficult to do so in Zcash. Zcash is a very private cryptocurrency that protects a user's identity.

The proof of work for Zcash and Bitcoin differs because Zcash employs the Equihash algorithm, whereas Bitcoin employs ASIC technology, which is a high-powered mining rig.

QUESTION 2; DESCRIBE THE STEPS IN CREATING A WALLET FOR THE PRIVACY COIN OF YOUR CHOICE (SCREENSHOT REQUIRED)

Here are the steps for creating a Z.Cash wallet for storing Z-coins (ZEC) and carrying out transactions with ZEC.

• first, visit https://z.cash and select the “Get a Wallet” option.

• On the wallet page, you will find the available wallets. Scroll down to the first group of options “Mobile wallets with shielded-address support” to select a private wallet of choice. For this demonstration we will be using “ZecWallet Lite” shown below. This choice was made as ZecWallet lite is supported both on mobile and PC. Click on the “visit” site link to access ZecWallet Lite.

• Clicking on the “visit site” to takes you to https://zecwallet.co. Download the wallet on your preferred device, here we will be downloading for desktop.

• When download is complete, install Zecwallet app by clicking on it. Allow for sometime to complete the installation.

• On successful installation, you should be greeted with the Zecwallet app page. You have the option of creating a new wallet (for new users) or restore existing (for individuals that already owned a wallet.
  We will be create a new Zecwallet for our Z.coin (ZEC). So, select “Create New” to create a personal “seed phrase” that will be unique to your wallet and is used in processing transaction.

• Clicking on “Create New” generates the seed phrase some of which are shown below. The seed phrase is the code the wallet owner uses for transactions.

• Next, click on start wallet and allow it some time to set things up, after few seconds, your wallet is setup and ready for use. Here is what your wallet should look like:

• The above is the Dashboard for Zecwallet. The dashboard have the details of recent transactions.

The above shows the send area and can be used to send funds privately.

The above shows the Receiver area and contains details of the user’s shielded address for receiving ZEC.

The above shows the transaction area and it contains history of all transactions on the user’s wallet.

Above shows the address book and the address book enables a wallet holder to store send addresses with unique labels to make transactions easy.

QUESTION 3; EXPLAIN THE REASON YOU CHOOSE THE PRIVACY COIN .(STATE THE ADVANTAGES AND DISADVANTAGES)

I am a big fan of privacy, and I believe that everyone has the right to it. Zcash is distinct from all other crypto currencies in that its privacy is unrivaled, in contrast to most other cryptocurrencies, which make every transaction public.

Zcash protects the privacy of its users and keeps all financial information secret. Transactions are normally quite quick, and transaction costs are usually quite minimal. It's one-of-a-kind, open, and fair, and it can be spent, sent, and received on any device, including mobile phones, digital wallets, and computers. When it comes to Zcash, everyone is treated equally regardless of social position when it comes to accessing Zcash.

ADVANTAGES

• Zk-SNARKS technology has helped to increase accuracy in various digital processes without disclosing much information
• low trade charge
• high security
• ease of mining.
• There are fewer reports of network errors.

DISADVANTAGES

• Because most wallets do not accept Zcash, it has restricted storage possibilities.
• When there is a little breach in their network, ZEC can be misallocated, resulting in rapid inflation and a drop in the value of the currency.
• Because of its privacy, individuals may be skeptical of its openness.
• it has only CPU mining ability

QUESTION 4; CONCLUSION

Zcash aims to address the shortcomings of first-generation block chains. It protects both your privacy and your security. As a user, you always have the option of conducting a transparent transaction.
Zcash meets all of the requirements to become a global payment system, and it outperforms bitcoin. When compared to bitcoin, its hardware is far less expensive.
The ability to Trust is one of Zcash's strongest features. As a Zcash user, you must be willing to trust that this is where you want to be. Zcash is headed in this way, as more and more users want to be anonymous with their blockchain transactions. While competing with other privacy cryptocurrencies, Zcash ensures transaction security with its zero-knowledge proofs.