Crypto Academy Week 16 - Homework Post for @levycore

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Greetings to you all and welcome to my assignment of this week, it have always been a thing of joy to me whenever am writing any of my crypto academy assignment. I will start this week assignment by writing the assignment on Privacy coin which was Lectured by distinguish Prof. @levycore. This assignment is been centered on:-

• Choose a Privacy Coin and perform a fundamental analysis of the coin in detail.

• Describe the steps in creating a wallet for the Privacy Coin of your choice. (Screenshot required)

• Explain the reason you chose the Privacy Coin. (State the advantages and disadvantages)

• Conclusion

Now to the assignment, but before starting my assignment, I will be explaining what really is privacy and then what privacy coin is.

WHAT IS PRIVACY

Privacy can be said to be when someone is not been observed or disturbed by others. It can also mean a state of solitude, isolation, not to be disturbe, not to be interrupt, free from any kind of interference and free from public attention. Privacy can also mean to be a state where an individual or group of person secluding every information about themselves from the public.

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WHAT ARE PRIVACY COINS?

Privacy coins can be describe as those type of coins that has blockchain that are performing private and anonymous transactions by hiding sender and receiver of they transaction. This privacy coin blockchains, hide's the user’s wallet details and also multiple transactions are mixed together, thereby avoiding chain analysis. These privacy coins are not transparency like Bitcoin and others that are non-privacy blockchains, which allow free viewing access to public addresses and transactions. Which is why non privacy blockchain are easily trackable of deposit and withdrawal details.

Privacy coins use two aspects to achieve transaction privacy, which are untraceability and been anonymity at all times. The anonymity aspect will make sure that the identity of the transaction is hiden, while untraceability aspect takes care of making sure that it's impossible for anyone to trail transactions, while using blockchain analysis.

SOME OF THE METHODS USE TO ACHIEVE PRIVACY BY THESE PRIVACY COINS

These are some of the most use methods by privacy coins:-

• Stealth Addresses
• Ring signatures
• CoinJoin
• ZK-SNARKs, etc.

• Stealth addresses: Stealth Addresses is a method whereby the sender generate address for every transaction so as to avoid being linked back to the receiver.

• CoinJoin: Coin Join is a method whereby transactions from various parties are merged into a single transaction, and distributed to each receiver through a new addresses. This system can also be called Coin Mixer

• Zk-SNARKs: Which means Zero-Knowledge Succinct Non-Interactive Argument of Knowledge in full, is a method that gives you an avenue to prove transaction validity without identifying information of parties in the transaction, etc.

• Ring Signature: Ring Signature is a method that gives any single member to sign a transaction on behalf of members without revealing identity of the member that signed the transaction. It can also called Shielded Addresses.

Now that we have gotten to the point of understanding what exactly is privacy coins and what they are all about, I will be performing a fundamental analysis of the privacy coin of my choice. I chose Zcash as my choice of pravcy coin.

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ZCASH

ZEC Price Statistics

Zcash Price Today

Zcash Price $160.02

Price Change 24h $12.53 +8.49%

24h Low / 24h High $146.10 /$164.39

Trading Volume 24h $533,567,746.97 -3.47%

Volume / Market Cap 0.2789

Market Dominance 0.12%

Market Rank 54

Zcash Market Cap

Market Cap $1,913,391,981.68 +10.50%

Fully Diluted Market Cap

$3,378,355,529.10 +12.21%

Zcash Price Yesterday

Yesterday's Low / High. $141.38 /$162.41

Yesterday's Open / Close. $150.07 /$162.25

Yesterday's Change 8.12%

Yesterday's Volume $566,173,730.77

Zcash Price History

7d Low / 7d High $130.70 /$186.15

30d Low / 30d High $88.37 /$370.14

90d Low / 90d High $88.37 /$370.14

52 Week Low / 52 Week High $48.45 /$370.14

All Time High

Oct 29, 2016 (5yrs ago) $5,941.80 -97.29%

All Time Low

Mar 13, 2020 (1yr ago ) $18.94 +749.54%

Zcash ROI

-96.25%

Zcash Supply

Circulating Supply 11,893,725 ZEC

Total Supply 11,893,725 ZEC

Max Supply 21,000,000 ZEC

Please Note that all statistics data are from Coinmarketcap at 7:30am 1/06/2021 and some might change do to volatile nature of cryptocurrency. Meaning that some might go up or down as the case maybe

The privacy coin ZCash, with ZEC as it symbol, is an open-source digital assets, which was founded by Zerocoin Electric Coin Company. Zcash is a privacy coin that are used to make transactions which are anonymous and are untraceable. Zcash use cryptographic system to make transactions anonymous and untraceable. Zcash is also a fungible cryptocurrency token, all tokens are exactly same and can't keep transaction history. This system makes tracing transactions very difficult and therefore remains anonymous.

FOUNDED

The Zcash privacy coin was founded by the Zcash company (Zerocoin Electric Coin Company) in October 2016, Zooko Wilcox-O’Hearn the CEO is the leader of the team, the Zcash team are made up of blockchain engineers and computer scientists. The group is practicing decentralization and so therefore does not own or run the blockchain. These Zcash team are seen as participants in the ecosystem; they build and develop the protocol and also suggest updates which members of the Zcash community will have to agree upon it.

SOME IMPORTANT HISTORY OF ZCASH

• May 2013, The proposal from a research team at John Hopkins University, which proposed Zerocoin. Building a privacy protocol that will serve as an extension to Bitcoin network.

• Jan 2016, The leader of the team, Zooko Wilcox announces the establishing of the Zcash company and the Zcash project, which is a privacy protocol that is been inspired by the Bitcoin network.

• October 2016, Launches the privacy coin called Zcash

• March 2017, The lunching of the Zcash Foundation to help in guiding the evolution of the Zcash network.

• October 2018, Upgrading Sapling, which helped to improve the effectiveness of Zcash’s cryptography implemented.

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THE UNIQUE NATURE OF ZCASH

Privacy: The Zcash protects your data, using zero-knowledge proofs system to encrypt all your transaction details. This system allows your transactions to be verified without details like addresses and the amount of the transaction.

Options: Zcash gives a you an opportunity to have the options of chosing the best ways that suit you to send your transaction. You are provided with the options of sending your transaction privately,no personal details will be revealed or sending your transaction publicly, which will reveal your transaction details. You can also chose the option of one party will have to shield only it's own personal details.

Fungible: It's also a fungible token, which makes it is impossible to identify a single token. This is why it is very hard to trace or have a compiled transaction history.

Easy To Regulate: Since you can still transaction publicly on the Zcash network, this has makes Zcash not to through regulatory scrutiny like other follow privacy coins. It has caused some of the fully-compliant digital assets exchanges to be able to list Zcash on their platforms.

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HOW ZCASH IS BEEN MINE

The Zcash network, validate transactions through the proof-of-work, which is also the validation system been use by Bitcoin network. The Zcash ecosystem, use similar mining reward system to that of Bitcoin network. It rewards Miners for every block they are able to mine with tokens and also halved these rewards every four(4) years. These rewards are been shared as follows, 80% to the Miners and the remaining 20% are shared among the founders, the investors and the Zcash employees. There is also a share to the Zcash Foundation and Zcash Company from that same remaining 20%.

ZCASH WORKING PROCESS

zk-SNARKS is the short word for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge, which is the transaction system Zcash uses. It is a transaction system which ensure that the standards for transactions are met, and it doesn't check for private, or confidential data's. It allow you to prove that you have the exact money and the authorisation to perform that transaction, without actually show the money. It is only interested in the authentication of the transaction and not in it internal information. One of the disadvantage of zk-SNARKS is it cost of operation are very huge and it care a lot of computation

The Zcash addresses are private z-addresses or transparent t-addresses. The private z-addresses begins with z, while the transparent t-addresses begins t. With these two addresses, you have the options to perform four transaction types such as.

• Z - Z - Private
• Z - T - Deshielding
• T -Z - Shielding
• T - T - Public

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These two addresses are interoperable, which mean that you can move your digital assets between them. But you must fully understands and aware of the implications before performing transaction through any of the addresses.

USAGE OF ZCASH

The Zcash token have come of age and now have the influence of Bitcoin. Zcash is also a p2p digital assets, so therefore you can use it for day-2-day payment transactions. It is Zcash many privacy features that stand Zcash out, so therefore, it's more suitable to use it in send or receive transactions that you wish to remain anonymous and untraceable.

HOW TO CREATE ZCASH WALLET

Zcash has many wallet but I will be using Zcash wallet lite and Zcash freewallet.

You login to the Zcash website at www.zcash.technology, click on wallet or you can better still visit Google play store to download the Zcash wallet lite app. After downloading and installing the wallet app.

Then click on create new wallet.

Now copy your seed and save it in a safe place and click on I have saved the seed

You now have a new Zcash wallet ready for transactions

How to create Zcash freewallet

After downloading and installing it from the play store, open the wallet app.

You have the options of signing up with your Google, Facebook, Email and Phone number. I will be using phone, so click on login with phone number

Then enter your phone number and a verification code will be send to your phone number.

Enter the verification code sent to you

Create a password and repeat it again

Now enter your name and click on sign up

Congratulations, your Zcash wallet is ready, now you can start using your wallet or chose to verify it. Now click on the setting icon at the top right

Now click on account

Enter your details and click on continue

Now upload your verification documents and verify. Your wallet is now ready for transportation.

WHY I CHOSE ZCASH

Firstly is that I love the project and am a holder of Zcash. Secondly because of the nature of it privacy where you have options to decide on your own accord and not it been force on you.

ADVANTAGES

*It give you protection by making your transaction untraceable.

• It is good for anonymous transactions.
• It can be use for the payment of transactions.
• It give you the options of sending transaction through privacy or public.
• It's a decentralized privacy coin.
• It had a Fast transaction speed and confidential with also lower transaction fees.

DISADVANTAGES

• Can easily be used for illegitimate transactions.
• It uses zk-SNARKS system for privacy protection, which is to expensive and required huge computation.
• Not all exchanges list privacy coins.
  *It can subvert legitimate law enforcement agencies.

CONCLUSION

Although users knew that their information is fully not private, so this is why the prefer privacy coin for certain transactions. These privacy coins provide you some level of protection on any transaction you perform. The Zcash is having an edge by providing users with the options to choose whether to send a private transaction or public. This exciting features has made Zcash more palatable to regulators that have been against pure privacy token. Yet there is still the need to convince regulators and make them to understand that those encrypted transactions are legitimate.

Most transactions on Zcash network has been through public in the past. The zk-SNARKS takes lot of computational power and is also of huge cost. The Introduction of Sapling will further make Zcash privacy features hugely robust and efficient. No matter what happens, privacy coins has come to stay because users demands more privacy in their transactions