ZClassic (ZCL) and Bitcoin Private (BTCP)

Paul Mak Blocked Unblock Follow Following Dec 29, 2017

The most purposeful fork to date.

There’s a great tussle between conflicting interests in cryptocurrency development. On the one hand, developers want to make it fair for the community and allow a coin’s growth to be directed purely by market forces, on the other, it’s necessary to give miners the power and incentive they need to work on the blockchain. To add to this, complete anonymity is still a contentious and problematic issue. Few coins provide true anonymity but the question of their survival and adoption remains influenced by the growing threat of governmental censorship.

The question essentially becomes: how do we satisfy all of the stakeholders? The divisive needs of the different parties make that a very tough one to answer. To a certain degree, ZClassic (ZCL), is attempting to provide solutions.

ZClassic is an evolutionary spin-off of the Zcash protocol, which itself took inspiration from the famous Zerocoin protocol. The latter attempted to bring an updated version of the blockchain system that offered full privacy. Coins like Bitcoin don’t in fact provide anonymity — they are merely pseudonymous. Should your personal data somehow be connected to your transactions (which is worryingly easy to do), your privacy vanishes. The whole of your transaction history becomes apparent.

To clearly see ZClassic’s distinctions and purpose, it is necessary to have an understanding of the Zerocoin protocol.

In 2014, a research paper was published that aimed to address the shortcomings of Bitcoin, namely it’s lack of genuine privacy. The authors of the paper introduced a technique that allowed coins to be transacted without revealing the information on the blockchain ledger — the transaction origin, destination and amount was fully obscured. It did this by implementing a cryptographic method known as zero-knowledge proof and allowed users to convert their coins to zerocoins. The newly converted coins, which were fully anonymous, could then be used for transactions.

Zerocash was the next step in solving various anonymity issues. In many cases, it is unwise to hide all of the information related to a transaction. Zerocash tinkered with the Zerocoin protocol to hide only the payment origin, not the destination and amount, and also greatly decreased the transaction times.

ZClassic is the third generation of the zerocoin protocol, following Zerocash. Through the same means of zero-knowledge proof, it offers a similar degree of privacy and a selective transparency of transactions. In addition, the developers have decided to remove the 20% fee that Zerocash imposes on miners. This shift is guided by a desire to give more influence to the community. As further evidence of this, they are also doing away with the slow start of block creation that Zerocash employs. This allows for a quicker extension of the blockchain, letting the community decide how quickly the blockchain grows and, consequently, its value.

True to its intention of being community-driven, ZClassic is largely the work of an active community. Only 4 full-time developers are involved with the coin. The coin has received no funding, instead relying on the backing of supporters who want a better privacy-focused coin. The team wanted to fork away from the Zcash blockchain because it left many excluded from the investment stage, which only benefited large scale miners and early investors who bought the company. Greater inclusion was the impetus for ZClassic’s creation.

Therein lies the purpose of ZClassic as well. With its desire to hand influence entirely to the community and miners, it wants to create a transaction system that is spearheaded by the users.

An interesting development has taken place. A private version of Bitcoin, called Bitcoin Private, has forked off of the Zclassic technology. This Bitcoin Private is similar to Bitcoin Gold in terms of technology, it’s just that it incorporates Zclassic’s privacy related features as well.

However, the real news is that Zclassic owners will receive Bitcoin Private coins in a 1:1 ratio when it launches. That means, if you’ve got 1 ZCL coin, you’ll receive one Bitcoin Private coin. That’s a significant signal of intent being sent out by this partnership.

Before we analyse the implications of this, let’s examine Bitcoin Private more closely.

What is Bitcoin Private?

Bitcoin Private is exactly as described before — it’s a forking off of the Bitcoin blockchain that implements ZClassic’s tech.

The Team

Rhett Creighton is the founder and lead developer of Bitcoin Private. It’s still a very early project supported by a few ardent supporters of the principles guiding the coin. In fact, they’re so early into the game, that they are shouting out to the community for potential developers. Among other roles, @CryptoJake22 is working on marketing the coin and helping with the transition of the fork. J22 has been instrumental in the development of hush-list coins.

Volunteers are flooding in to support the coin, so there’s definitely enthusiasm that will help the coin in its first few months.

The Bitcoin Fork Bout

The real selling point of Bitcoin Private will be its integration of ZClassic’s privacy features. This allows it to compete with the other two Bitcoin fork: Bitcoin Cash and Bitcoin Gold with a clear and concise USP.

Forks occur when there has to be some underlying technological change to the blockchain. This change isn’t compatible with the old blockchain, so it “hard forks” away from the ledger into a new one. New rules are established in this new chain. Most forks are greed generated abominations given birth by crooked developers whom aren’t interested in the purposeful endeavors of the collective community, instead only looking to line their own pockets. Bitcoin Private however, brings not only an alternative that has functional merit but also a team dedicated to the concept of inclusion and wide spread distribution.

In the case of Bitcoin Gold, changes were made so that mining could become a more inclusive process, allowing just about anyone with a decent graphics card to mine. This would soften the problem that Bitcoin was facing with select large pools of miners holding power over most of the network. BTC Gold received little support or fan fare.

Bitcoin Cash forked because miners wanted to increase the size of each block — something that developers choose to ignore. The miners argued that what the developers chose to do — implement the Segregated Witness protocol — was a short sighted improvement that did not really address Bitcoin’s scalability problem. Bitcoin Cash however is just a step in a different direction offering no complete solution.

A worthy fork is made because the majority consensus of the community and/or the developers believe that improvements could be made to the blockchain, and they deliberate over how that should happen. It often happens that there is always some party left disgruntled because of the conflicting viewpoints on how the technology should develop.

And that’s where Bitcoin Private might just trump both Bitcoin Cash and Bitcoin Gold. Privacy as an option, is a universally welcomed feature for Bitcoin enthusiasts.

Bitcoin’s problems can be broadly categorized as follows: privacy, scalability and mining monopoly. Neither Bitcoin Cash nor Bitcoin Gold tackle all of these problems, but Bitcoin Private could do so or at the very least, is positioned to beat the incumbents.

First, it implements the zk-Snark technology of the zerocoin protocol (an updated version, as mentioned) that allows selective transparency. In ZCash, which also tries to address Bitcoin’s problems, 10% of the mining network is controlled by the founders. By avoiding a slow start and letting all of the mining rewards go to the miners, it greatly reduces the chance of a few mining pools taking over the network. Funding will come entirely from the community. The scalability problems remains an issue, but as the coin is still very early in development and as more volunteers join in the project, perhaps there is hope that some solution will be put forward, either way, all Bitcoin products struggle with this same concern.

The above considerations could very well make it the most useful Bitcoin fork of all.

What Do the Numbers Tell Us?

ZClassic was announced in early November and has undergone uncertain market strength since then. With a circulating supply of just 1.8 million (Remember, it’s still very early), it’s impressive that it now has a cap of $140 Million and a unit value of $82. That great value has only occurred after recent announcements regarding Bitcoin Private; before, it was at a value of $4. Such is the rollercoaster world of cryptocurrency, where one partnership could launch huge success for a coin.

Now, no one knows exactly how Bitcoin Private will be valued when it arrives but, judging by the immense enthusiasm shown by the community, it could be quite a lot — even a serious competitor to other Bitcoin competitors. Any analyst can see that BTCP will hit the market swinging until it finds its comfort zone somewhere higher than Bitcoin gold but lower than Bitcoin Cash.

As for the reason why ZCL has skyrocketed; ZCL holders will get 1 Bitcoin Private coin for every 1 coin of ZCL they own. In total, there is expected to be about 18.5 million coins of Bitcoin Private in circulation. It’s all very simple math from here, an investment in ZCL will pay out in multiples, the only question mark is, will the fork happen? And when will it happen?

Investors section

Should the coin’s development go as planned, then it could certainly surpass Bitcoin Gold in the short and possibly even Bitcoin cash in the long. Once legitimacy is confirmed, users on the networks will flock to Bitcoin Private, of this I have no doubt.

Bitcoin Cash currently has a market cap of $46 billion and Bitcoin Gold $4.8 billion. Those are both sizable numbers by any standards — and Bitcoin Private could be right up there with them, if all goes well. What works in its favour is the fact that the community will drive the coins value. If they see it as something that is useful, the word will spread about it and it could quickly rise up. With the government pressure being imposed in Australia, USA, South American markets and parts of Asia, we all, in this community start feeling a collective frustration. While taxation is needed to provide us with the stable economies we enjoy, there is an inherent desire for liberty within each of us, that cryptocurrencies and blockchain technology have re-awoken. The more they push, the more we want out and privacy and anonymity features, allowing us to transact and operate as financial sovereignties in my opinion is one of the most advantageous prospects of this market. 2018, will be a huge year for privacy cryptos and I think the team at Bitcoin private may have just timed this market entry to perfection. Im comfortable to put my stamp on BTCP to be a top 10 Crypto currency on coin market cap within 30 days of its release. Somewhere in the range of $450-$600.

As of right now, Zclassic has retraced from a high of $120 USD down to $82 and a total cap of $140M tapping the fib .5. The sell walls are nice and subtle as per, suggesting investors suppressing the price to accumulate. Considering its price against the BTCP expectations, ZCL is currently at a great entry. Once the general mass picks up on this free air drop, we can expect a short ZCL parabola heading into late January. The followers of Bitcoin privates twitter was 700 yesterday suggesting that the market is still relatively ignorant to it all. As of today it is 1090, more than a 30% increase in followers in 24 hours, expect similar patterns in higher multiples in the price of ZCL.

Conclusion

This deal between ZClassic and Bitcoin Private will benefit each other and the community as well. Together, they have brought a workable solution to the privacy problem and allow users to remain connected with the Bitcoin blockchain. To potentially solve a serious problem of the biggest cryptocurrency in the world will be a major achievement and the cryptocurrency world should be cheering them on. It’s just a matter of whether they can successfully execute their idea in a manner that builds trust. This means delivering on promises. A BTCP fork end of January or earlier would be a great start. To get there, all they need is your help. You can donate cryptocurrency or resources to the development of the project.

It is proving to be a very interesting time for the world of cryptocurrency. Not just because the public itself has taken notice of blockchain and investment potential, but because a greater portion of the world’s developers and engineers are taking up the initiative to solve some of the fundamental problems of major cryptocurrencies themselves so they can solve the fundamental problems we face in our daily lives. That bodes well for cryptocurrency development and the global population on the whole, even if individual efforts may not succeed. It’s all a collective effort to push the technology in the right direction to better our way of life. During this exiting developmental phase, we speculators gain wisdom and wealth. Happy investing guys.