Summary of major progress in privacy coins in March: Monero, Zcash, Zcoin, etc.

Editor's Note: This article comes fromFirst class warehouse blockchain research institute (ID: first_vip1), reprinted by Odaily with authorization.

Editor's Note: This article comes from

First class warehouse blockchain research institute (ID: first_vip1)

Monero (XMR), #13

This month, the major progress of each privacy coin project is less, and the main work is the daily development and small version iteration of the wallet (the changes are mostly UI/UX fine-tuning and minor bug fixes). Both Monero and Zcash have published articles about next-generation technologies, product proposals. The first-class warehouse will analyze and interpret with everyone to see what kind of impact they will bring to the project.

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*Project progress is sorted in order of ranking, and the ranking selects the data from the Coinmarketcap website on March 31, 2020.

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March Progress: Dr. Sarang Noether of the Monroe Research Laboratory (MRL) published a new paper on Triptych. The paper, titled "Triptych-2: Efficient Proof of Confidential Transactions", was published on the official website of the IACR (International Association for Cryptography Research). Confidential transactions are used to hide transaction amounts on the blockchain ledger. Sarang previously proposed that Triptych could be used as a confidential transaction solution for Monroe's next generation. On the basis of Triptych, Sarang proposed Triptych-2: it provides a system that can prove the expansion of multiple commitments in a single set. Combining the data on the Monero chain, he believes that Triptych-2 is the fastest batch-processing construction solution that does not require trusted setup.

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The privacy coin projects that everyone is familiar with are established by different teams and use different technologies. They seem to be separated, but in fact their technical routes are very closely linked. What does a good privacy technology look like?

First of all, it can hide 4 core information in our daily transactions: ①transaction amount; ②remitter; ③payee; ④IP address. IP address protection is implemented at the communication layer. The current mainstream solution is to integrate Tor/I2p or Dandelion/Dandelion++. The core difference between most privacy coins is: the technology to achieve the first three on-chain data protection.

From the appearance, each privacy coin can hide transaction information, so many ordinary users will think that there is not much difference between each technology. But in fact, they are very different in terms of scalability, security, and privacy. The advantage of a technology in terms of privacy may come at the expense of scalability. There is no absolute overall advantage, but more of a trade-off that suits one's own vision. Let us follow Sarang to see the iterative road of privacy technology.

As one of the earliest privacy protection schemes, CryptoNote splits a transaction output into multiple outputs of specific denominations, and uses a linkable ring signature to hide the transaction amount and the identity of the remitter. CryptoNote projects include Bytecoin, Dero, etc. However, the splitting of specific denominations is not practical enough, so RingCT uses Petersen commitments to solve this problem.

The common flaw of both CryptoNote and RingCT is the use of linkable ring signatures whose size increases linearly with the increase of the anonymity set. If a transaction is to be fully obfuscated, it needs to be placed in a huge anonymous set, which means that the space it occupies will also be very large. This is why privacy coins using the above two technologies have poor scalability. In specific project implementations, or due to scalability considerations, the anonymity set of the ring signature is also set within 11.

During the same period, another technical route also appeared on the stage of history. Compared with the single-digit anonymity set of the ring signature, Zcoin of the Zerocoin protocol achieves a huge anonymity set of 213. It uses an RSA accumulator to represent a given state of an output and provides a proof to declare the validity of the transaction. Its shortcomings are that it is impossible to achieve arbitrary transaction amounts, the proof is large and inefficient, and a trusted setup needs to be activated. The Zcash of the Zerocash protocol uses concise proofs related to the Merkle accumulator to replace the RSA accumulator, which can realize arbitrary transaction amounts and direct anonymous remittances, but it also needs to enable trusted settings.

The developers of Zcoin successively proposed Sigma (to solve the problem of trusted settings) and Lelantus (the size grows logarithmically with the growth of the anonymity set). Readers who have no concept of linear growth, logarithmic growth, and exponential growth can refer to the figure below.

We can see that in a linearly growing function (such as y=x), Y increases proportionally as X increases. In the function of logarithmic growth (such as y=log2x), Y increases rapidly at the initial stage of X increase, but then the growth rate slows down significantly. This type of function is especially suitable for transactions with large anonymity sets (x), the marginal cost of its size (y) is very low, and the overall cost is maintained at a currently acceptable level. Of course, transactions that grow exponentially (such as y=2x) are a disaster for the blockchain.

In recent years, after Monero has integrated Bulletproof, which also has logarithmic growth, its scalability has been further improved. The two "close relatives" of Bulletproof, Omniring and RingCT 3.0, although they can complete the proof of all inputs in one proof, their performance in verification is not satisfactory.

Zcash (ZEC), #27

Through the above review, you may find that each technology more or less makes up for the shortcomings of its predecessors, but at the same time it also creates new problems. It is the competition and iteration of various privacy coins in the past eight years that has unknowingly formed the evolution of blockchain privacy technology. In front of this road, there are SuperSonic, PLONK, Groth16, STARK and so on. There is no perfect technology, only constantly iterative privacy coins.

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Plan for April: Back to Monero, after the paper is published, it should gain peer attention and review in the next 2 months. After Monero solves ASIC, the "confidential problem", this year's main theme will also be on the iteration of privacy technology. As for whether Monero will adopt Triptych-2 or other solutions in the end, it still needs a period of research and testing.

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Zcoin (XZC), #95

FlyClient is inspired by Bitcoin's SPV (Simple Payment Verification). Before the implementation of SPV, if nodes need to verify the data on the blockchain, they need to download the entire blockchain, which is very difficult for mobile devices such as mobile phones. SPV enables nodes to verify the validity of transaction data while only downloading block header information, making blockchain mobile wallets possible. However, SPV is not a good implementation technology for multi-currency or currency mobile wallets with a short block time. So Andrew Miller, chairman of the Zcash Foundation, and others developed a non-interactive proof of work (NIPoPoW) based on SPV to adapt to ZCash. Non-interactive proofs are also more efficient than interactive proofs. However, NIPoPoW has very high restrictions on the working environment: the block difficulty is constant, and there are no dishonest attackers. FlyClient is one of the improvements made to get rid of these restrictions.

Plan for April: Zcash's next development will focus on the next network upgrade, Heartwood. This release will improve interoperability with Flyclient and allow coinbase to send covert transactions directly to miners.

Grin (GRIN), #134

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April plan: The team will continue to focus on Lelantus. At present, most of the functions and unit tests of Lelantus have been completed. Once the team completes the current phase of development, they can move on to the final phase: spending functionality. Lelantus may be launched on the mainnet this year.

Beam (BEAM), #146

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Plan for April: Grin members will continue to discuss when and what the v4.0.0 hard fork upgrade will be. The current proposal is for the upgrade to be at altitude 786,240 (around July 15, 2020).

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Progress in March: No major developments this month.

Plan for April: The Beam team will continue testing Double Doppler v4.2 and web wallets, as well as hardware wallet integration.