ZClassic from $2 to $218 says the upcoming Bitcoin Private fork may be a success
Following the meteoric rise of Zclassic, Rhett Creighton’s Bitcoin Private fork seems to be receiving significant interest from the whole cryptocurrency community.
There is a lot of buzz surrounding the soon to be launched Bitcoin Private (BTCP). The reason for this is that this hard fork of the bitcoin blockchain will continue to eat into the market cap dominance which is slowly being eroded. Bitcoin’s market dominance has decreased from 85% one year ago to as low as 34% on 05 January 2018. This fork is believed to be quite successful initially which means that the BTCP hard fork will be watched closely by market insiders.
The BTCP hard fork was announced in mid December by Rhett Creighton with the intention to form a hard fork using the existing bitcoin blockchain whilst adding the privacy features of the ZeroCoin protocol. Zclassic (ZCL) is the exact protocol the BTCP hard fork will be utilising which is the third version of the ZeroCoin protocol.
The initial Zerocoin protocol had very good privacy features which allowed the participants of the transaction to remain completely anonymous. This meant that the payer address and the payee destination along with the transaction value were completely hidden. The ZCL privacy features being used by the BTCP fork show the payee’s address and the transaction value while leaving the payer’s details hidden.
How BTCP seeks to solve bitcoin’s privacy flaws
Looking to solve the problem of bitcoin’s privacy drawbacks, the BTCP hard fork proposes a solution that will entice some bitcoin owners to convert their bitcoin to BTCP. It is around this issue that BTCP is being marketed since it has been discovered that bitcoin does not actually make transactions anonymous. Bitcoin only provides a level of protection that gets weaker the more often the same wallet and public key is used.
Mr Creighton and his volunteer community of developers are hopeful that the privacy features that the ZCL protocol provides will encourage a large conversion of bitcoin holders. It is unclear whether the ZCL protocol will have a major privacy benefit. In addition to that, information is scarce on what exchanges will support the BTCP hard fork, if any at all.
At the time of writing, there have been no announcements of any exchanges supporting the hard fork. Nonetheless, the rumour mill is circulating many reports of potential support coming from Bittrex, Cryptopia and coinexchange.io. It is suggested that without clear support from exchanges the official announcement of any planned fork date will be delayed until the support of some exchanges is confirmed.
How BTCP is different from bitcoin
Mr Creighton has previously announced that the date of the hard fork will be January 2018. The details of the fork have been released and some of the changes are bound to raise eyebrows. To begin with, the BTCP fork has sought to address the issue of scalability in two ways. First, by utilising the Segregated Witness (SegWit) protocol to reduce the amount of information entering the blockchain. Second, by increasing the block size from 1MB to 2 MB.
The increase in the block size will delay problems of network scalability. It is unclear how long the delay will last. Regarding how the Segregated Witness protocol functions, it is unclear whether it provides a privacy benefit or a privacy drawback. The problem is due to the relative immaturity of the protocol and the challenges of knowing how it will be applied in future. The way the new cryptocurrency will be mined also has implications for the broader bitcoin community.
Mining bitcoin is dominated by mining pools which have the huge computing power required to process bitcoin transactions. Those mining pools generally operate ASIC computers manufactured in China. By increasing the block size and using SegWit, BTCP allows smaller mining enterprises to compete more fairly to earn BTCP for the service of processing transactions. This will attract a large community of individuals to contribute to BTCP as it continues to develop. This will be important in its early stages.
BTCP aims to have a block interval time of two and a half minutes. This rate will make payment processing almost instant. That gives BTCP the potential to be a viable form of money, assuming that the problem of scalability does not impact the block intervals as BTCP transactions increase. It should be remembered that if that were to be the case, larger mining pools using ASIC hardware would soon dominate the mining process.
Consistent with the bitcoin whitepaper released by Satoshi Nakamoto, there is a finite supply of BTCP, the total being 21 million. It is estimated that at the time of the fork there will be 18.5 million total BTCP in circulation not yet mined. That is calculated by adding total mined bitcoin to the total mined units of ZCL. The most important factor of the fork is the bottom line.
It is proposed that at the time of the fork a “snapshot” is taken of the bitcoin, Bitcoin Cash or ZCL in a holder’s wallet and that value is convertible to BTCP. For purposes of simplification, the rate of convertibility will be 1:1 meaning that if a holder owns one unit of ZCL they will be entitled to convert that one ZCL for one BTCP. The same rate applies to bitcoin.
That means a holder of one bitcoin will be able to convert that one bitcoin for one BTCP. That rate of exchange suggests the huge potential BTCP’s founder, Mr Creight, sees in its future. And it appears there may be huge market confidence in its potential as well. This can be seen in the meteoric rise the ZCL price has experienced since the announcement of the intended fork.
Why BTCP will have early success
The price of ZCL reached an all time high of US$218 on 6 January 2018, an increase of US$216 from at the time of the announcement. This announcement was a telegram message Mr Creighton sent which only suggested he was “in favour” of forking from the bitcoin blockchain, which was around 14 December 2018.Mr. Creighton has strong credentials working with blockchain programming in addition to his experience leading the two previous forks of the ZeroCoin blockchain.
Mr Creighton, a Massachusetts Institute of Technology alumnus, was heavily involved in the first fork of the ZeroCoin blockchain and became lead developer of the ZCL fork. Being the most experienced programmer in the world as far as blockchain forks are concerned, his experience will mean a lot as negotiations for the fork get underway. The most effective strategy to achieve the fork has been in the area of marketing.
The entire cryptocurrency community is aware of the impending fork. Regardless of the concerns surrounding the longevity of BTCP, from looking at the price increase of ZCL it seems as though there is a lot of excitement around the event. How much of this is attributable to the effective marketing strategies of Mr Creighton and his team is hard to know. This price increase can offer us an important insight into the community interest surrounding the fork.
Considering that BTCP can be claimed on the basis of converting existing ZCL, bitcoin or Bitcoin Cash, that means having either of those is necessary to obtain BTCP initially. Because ZCL is the cheapest of that trifecta, it seems that the demand resulting from the hype of the BTCP fork is driving an unbelievable increase in its price. It is hard to know from the available information, but the increase in the amount of people holding ZCL supports the idea that this upcoming fork will be immediately successful.
- Grin had “most expensive genesis block one in history”
- Grayscale adds Stellar Lumens, citing demand and application
- Binance goes live with EUR and GBP fiat trades at Binance Jersey
- Grin vs Beam: MimbleWimble heats up as crypto competitors launch
- Brave browser on the verge of rolling out ads that pay viewers