Hardfork cryptocurrency ZCASH on the road to increased anonymity

On October 28, ZCash team posted on its blog the announcement of the successful activation of a hardfork called Sapling . According to the report, the new version of the network consumes 97% less memory and performs transactions 90% faster . The answer to this dramatic increase in performance lies in hidden addresses . They are the key element of the architecture of this project.

Difficulties with hidden addresses in ZCASH cryptocurrency

Before hardfork implementation, the use of hidden addresses required huge computational power from users . For this reason, cryptocurrency exchanges and the majority of users used the functionality of public transactions . Even at the start of the project, the team introduced transparent transactions that were at times less demanding from the technical side. Thanks to them, Zcash and received such a serious distribution among crypto enthusiasts. Unfortunately, this functionality has a minus . It lies in the fact that it reduces the level of anonymity of the network as a whole . According to the developers – their goal is to do soso that hidden addresses can be used everywhere . Hardfork is a step towards an exclusive private payment system .

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In the end, a complete abandonment of public transactions is planned . Nathan Wilcox , CTO ZCash noted that the team on a massive transition to the use of private Sapling , which at the right time can be made functional by default. Nathan emphasized that the main tasks of Sapling are to increase safety and productivity . The problem of the previous version was cumbersome and poor performance . Only users running the fullcryptocurrency ZCash node could use the private functionality .which saves all existing blocks of the chain to the user device . This is really a huge amount. After the fork, this functionality became available both to users of cryptocurrency exchanges, and those who use lightweight e-wallets. This was achieved by reducing the technical requirements for hidden transactions. Now they are carried out 6 times faster , taking up lessmemory 100 times .

It is worth noting that a lightweight wallet that supports this functionality is still in development . This is due to the fact that the wallet must contain security mechanisms that protect information about transactions, including from the hosting server . Nathan Wilcox noted that when developing such a wallet, the main goal remains the creation of a light product with privacy protection, including from its provider. The result should be a product developed specifically for Snapling , which will combine privacy with practicality.. It is possible that this development will not go to the masses, but will serve as an example for third-party developers, on the basis of which other products will be created for this task.

Using hidden wallets

Another innovation that was made available through Snapling . Now hierarchically deterministic wallets can be used to store coins and cryptotrading . Otherwise they are called HD-wallet . The concept was proposed back in 2012 in the Bitcoin network . Private keys are generated based on the address and seed phrase that is generated during the initial registration. This approach allows you to generate a huge number of addresses associated with a single wallet. This approach allows you to restore access to the wallet from a backup copy, having only a sid-phrase. In other cases, you would need to create a backup after each generation of a new address.

Since Zcash cryptocurrency is a fork of Bitcoin , the system of HD addresses is exactly the same here. Thanks to the Snapling update , the HD-walletcan also be used for hidden  Sapling addresses . Using such wallets, in the presence of a CED phrase, access to the entire tree of existing keys will remain. In operation, the process is as follows: first, a pair of master keys is installed, where there is a “key for viewing” and “a key for spending”. In Zcash, both of these keys are private. With the help of a key to spend money can be transferred. The key for viewing allows you to view data about individual transactions. At the same time, the entire anonymity of the network is not violated.. If the task is to make the account public in the private network, which it is by default, it is enough to open access to the view key.

Nathan Wilcox noted that the problem of disclosing data about outgoing transactions is more complicated than it seems. Over its decision will work in the process of upgrading Sapling .

How do Sapling transactions work in ZCash cryptocurrency ?

In those transactions that will be hidden, Joinsplit technology is used . One or two values ​​are accepted for the input, after which one or two transaction values ​​are created for the output. Such values ​​are called records . How many entries are created – not disclosed. If there are transactions for which more than two values ​​are needed, several Joinslit are used . As a result, we have a hidden transaction, without any information besides what was created and accepted. Cash withdrawal in this way is very popular in the cryptocurrency market .

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It looked like hidden records before. Now they do not use Joinsplit . Now it is just a transaction that displays the exact number of records created and received . For example, we see a transaction with two hidden exits and one hidden waste (accepted record). It can be assumed that the record is accepted for sending part of the funds to another recipient and redirecting the balance back to the sender’s address. But it may also be possible to send the entire amount to two different addresses simultaneously. The inability to determine which transaction scenario was in fact and is a guarantee of data privacy.

What should users who have Zcash cryptocurrency do?

As soon as hardfork took place, all users of the Zcash wallet were assigned Sapling addresses . To use the functionality of the new blockchain, you need to transfer your funds to them. This process has a flaw. In the course of such actions will be revealed the amount of funds that are stored in hidden addresses. According to Wilcox , this approach was a deliberate step. The goal is to be able to make sure that the system is not compromised.

Right now, the team is working on a solution for automated transfer of funds to new addresses. This should minimize the impact on privacy. For those who can not wait to make a transfer now, you can do it in “manual mode” . At the same time, the developers recommend to wait nevertheless for an automated solution. According to forecasts, this method will be implemented in the next few months. For those who deliberately use Zcashfor privacy purposes, this is an acceptable timeframe in exchange for increased anonymity.

There are no time limits for transferring funds from old Sprout addresses, but as you move to Sapling , Sprout will no longer work to receive funds.

Such news pleased the crypto community very much, because it is a serious step towards increasing anonymity . Moreover, Zcash was already subjected to a “strength test” when the secret services tried to find out the balance of the wallets of Zcash , the creator of the underground platform of illegal goods. In addition to explicit purposes for which such anonymity can be used, it is worth noting that this can be useful for ordinary traders in the cryptocurrency market.. Extortion, including torture, is common in order to learn passwords from wallets and theft of balance. As a rule, owners of cryptocrescents on which large sums were kept became victims. That is why we remind you that you should not once again spread about your savings, so as not to endanger.

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