XCZ (ZCoin) has been renamed to FIRO (Firo).
Firo (XZC) is a cryptocurrency that ensures financial privacy through the use of the Zerocoin protocol. It was the first cryptocurrency to implement this protocol, using zero-knowledge proofs to ensure that the addresses involved in transactions remain confidential. Developed primarily by Poramin and Aizensou, Firo uses the Zerocoin protocol to protect financial privacy, employing zero-knowledge proofs to prevent the disclosure of transaction parties addresses. Its parameters are the same as Bitcoins, with a block time of 10 minutes and a halving cycle similar to Bitcoin’s, approximately every four years.
The XZC halving occurred in September 2020, reducing the block reward to 6.25 XZC.
Compared to earlier methods for achieving anonymity, such as coin mixing and ring signatures, the Zerocoin protocol using zero-knowledge proofs overcomes their shortcomings by completely severing the link between the coin created and the one redeemed. When you mint a Zcoin, you also destroy a Zcoin, generating a proof that confirms you burned a Zcoin without specifying which one. Using this proof, you can redeem a new Zcoin with no transaction history.
Project Highlights
Zcoin uses RSA-2048 parameters from the RSA factoring challenge. The computer hard drives used to generate these parameters were destroyed 25 years ago. In the past 25 years, no one has proposed a solution to crack the RSA-2048 parameters, and it is unlikely to happen in the next few decades. In the future, Zcoin will switch to another cryptographic scheme that requires no trust mechanism. Bitcoin and some competing cryptocurrencies have attempted to address anonymity using mixers or ring signatures, but they score low on the traceability set metric.
The traceability set is a key indicator of cryptocurrency anonymity. In other solutions, the traceability set is limited by the number of coins mixed or the size of the ring signature. Each mix or ring signature is limited by the number of transactions within an operation cycle due to the finite block size of cryptocurrencies. As a result, the traceability set in these early anonymity schemes consists of only a few hundred entries.
Zcoin significantly improves the traceability set metric. Instead of limiting the traceability set to just a few hundred, Zcoin includes all melted coins in the accumulator, increasing the size of the traceability set to thousands. This results in higher anonymity levels compared to cryptocurrencies using mixers or ring signatures. Another issue is that mixer transactions are assumed to be secure without topological analysis and pre-existing network data, which is an incorrect threat model. Research papers have shown that, given long chains of transaction history, independent network topologies like Facebook can be used to break the anonymity of cryptocurrencies. In all previous cryptocurrencies, long chains of transactions are publicly visible on the blockchain and susceptible to topological analysis.
In Zcoin, there is no such chain of transaction history. Neither the sender nor the receiver reveals any information, and there is no connection between them, making topological analysis difficult.
Use Cases
Using Zcoins Zerocoin technology, you can "melt" a coin on the public ledger into a hidden coin. When redeeming your melted coin, you do not reveal who melted it. The process of melting and redeeming coins can be repeated as many times as needed to ensure complete privacy.
