Zcoin privacy crypto on Huobi, with ironic promotion for ID’d users
The original Zerocoin is now available on Huobi. Ironically, the promotion is for identifiable users only.
Zcoin (XZC) is a privacy-oriented cryptocurrency intended to facilitate anonymous transactions. And it's now available on Huobi, one of the world's largest cryptocurrency exchanges. To celebrate the launch, Huobi and Zcoin are offering a somewhat ironic promotion, available only for real name verified users.
The first part of the promotion is a trading campaign, where the top 50 real-name Huobi users with the highest cumulative buy and sell trade volume between 3pm (GMT +8) on 20 August and 26 August, of at least 6,000 XZC excluding trading fee, can win bonuses. The top reward is a 1,000 XCZ bonus for the highest volume user.
This will be running alongside a trade-one-get-one-free rewards program, where all real-name users with a cumulative XZC trade volume in the same period, of at least 100 XZC excluding trading fee, will receive a 1.5 XZC bonus.
How does Zcoin work?
Zcoin is now one of several privacy-focused cryptocurrencies to use the Zerocoin Protocol, one of the first functional anonymity extensions for bitcoin. The other best-known Zerocoin cryptocurrencies are probably Zcash, and PIVX, both of which are working to add their own unique features to the Zerocoin Protocol (zk-SNARKs and PoS respectively).
But Zcoin was the first and original cryptocurrency to be built on the Zerocoin protocol, released on 28 September 2016.
The vanishing act
Privacy in cryptocurrency is an extremely challenging area. Decentralised ledgers are innately transparent to a certain extent, dependent on that immutable transaction record, so introducing real working anonymity is a tough proposition. But it's also a highly in-demand feature, and some of the coins which claim to have functional privacy features never really did.
Bitcoin users have tried to get around the lack of privacy with tumblers – a kind of money laundering system – where transactions are sent into a third party to be pooled together and tumbled around before different coins are dispersed back to the owners, minus a reasonable fee.
This really wasn't good enough though. Firstly it requires a trusted third party, secondly it carries a fee and thirdly the transactions can still be traced back with enough time and effort.
The Zerocoin protocol works by building an automatic and more secure tumbler into the system. Basically, users can swap out "used" coins for "clean" coins as needed, wiping away the transaction history and anonymising transactions. This is extremely useful, not only because it's effective, but because it allows for on-demand privacy. Transactions can be transparent where needed, such as for compliance reasons or transactions which should be publicly traceable, while being concealable where needed.
Proponents argue that this is infinitely more useful in the real world than privacy coins like Monero, which is mandatory always-on anonymity by necessity. This is because Monero's alternative Cryptonote Protocol covers tracks by tumbling coins and adding red herrings during individual transactions themselves, rather than just having it as an on-demand feature.
It used to be optional to be turned on or off for specific transactions, but that was later found to undermine the privacy of the network as a whole and so was made mandatory instead.
Given the nature of the coin, it's mildly ironic that Huobi's current promotion is only available for verified users who trade under their real names. But it might not matter. After withdrawing it, users might just scrub their bonus coins squeaky clean, wiping away those real-name fingerprints.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA