Following their whitepaper roadmap to become the number one privacy coin on the planet, ColossusXT (COLX) about to launch their very latest new wallet update for the new ZeroCoin Protocol so that users can now use this excellent new privacy feature. This is the next step in the progression of this bleeding-edge cryptocurrency and following shortly will be the introduction of running on the I2P Network which is due to be implimented before the end of this year.
Is ZeroCoin a separate currency?:
No, ZeroCoins are your COLX coins just made anonymous. It is a protocol-level pooling of existing COLX using zero-knowledge proofs. Let’s discuss this process now.
How Zerocoin works:
Traditional cryptocurrencies provide privacy through pseudonymity, meaning that addresses are not connected to any personal details. Unfortunately, this still allows for the possibility that sets of transactions, or public addresses, can be linked to a specific individual. If that individual’s identity can be found, they lose their anonymity. Depending on the application in use, the ability to link multiple transactions or addresses to one individual alone can cause issues for that person.
With ZeroCoin (zCOLX), user’s coins are pooled into a mixing set and redeemed as needed using a zero-knowledge proof. The zero-knowledge proof enables a user to prove to another user that a transaction is true without publicly providing any information aside from the fact that the ‘money’ was sent and received. This allows for transactions to be verified as valid and take place without providing the other party with other information such as wallet balance, other transactions from the user etc.
zCOLX grants users’ total privacy and renders every end-to-end transaction entirely untraceable. This means that nobody can know the details of your personal transactions or your total wallet balance. It is not possible to trace the history of any given transaction, so nobody can data mine and recover any information to identify patterns and users in the transactions. Allowing users to hide their wallet balance prevents them from being targeted by those with bad intentions.
Ok… Can you explain that in a way that is easier to digest?:
Sure. In general (and this is a very high level explanation) you take your COLX coins and turn them into zCOLX (ZeroCoins). This adds them to a giant pool of zCOLX which everyone can contribute to. Your wallet still knows how many zCOLX you control, but when you send zCOLX to another user it sends it from the pool of coins thus hiding the fact that you have made a transaction.
Keep in mind that the pooling does not mean that everyone’s zCOLX is stored in a centralized location. Rather, the public ledger (decentralized blockchain) keeps track of how much zCOLX is created.
This means that each coin that gets sent using zCOLX is now 100% fungible as it has no determinable history attached to them.
When the zCOLX is received by another wallet it is turned back into COLX for the receiving user. As a user you determine if you want to make transactions using COLX or zCOLX.
Finally, a simple analogy. Think of zCOLX as casino chips. You give your 100 dollar bill (i.e. COLX to the cashier and you get some denominations 1x$10, 2x$20, 1x$50 dollar chips (i.e. zCOLX). This means that you no longer own that particular 100 dollar bill you exchanged and instead have “proof” that you still own $100. Now when you need 50 dollars of it back as fiat (COLX), you give your chips (zCOLX) back to the cashier and the cashier delivers a brand new uncirculated 50 dollar bill to a recipient of your choosing.