ZeroCoin Whitepaper Discussion (is it the first truly innovative ALT coin????)

[CoinHoarder]

This is one of the most innovative merge mined / ALT coin ideas IMO, it's a shame there isn't a thread here on the ALT subforum about it.

It is an idea of a merge mined SHA-256 coin that truly adds anonymity to the Bitcoin network.

Quote:
"Abstract—Bitcoin is the first e-cash system to see widespread
adoption. While Bitcoin offers the potential for new types of
financial interaction, it has significant limitations regarding
privacy. Specifically, because the Bitcoin transaction log is
completely public, users’ privacy is protected only through the
use of pseudonyms. In this paper we propose Zerocoin,
a cryptographic extension to Bitcoin that augments the protocol
to allow for fully anonymous currency transactions. Our system uses
standard cryptographic assumptions and does not introduce
new trusted parties or otherwise change the security model of
Bitcoin. We detail Zerocoin’s cryptographic construction, its
integration into Bitcoin, and examine its performance both in
terms of computation and impact on the Bitcoin protocol."

Read more here: http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf

I am going to go on record on saying that this is going to be the new best ALT currency, this is true innovation. They aren't just changing a couple parameters of existing coins. They are actually improving Bitcoin by making it more Anonymous, while creating a new coin at the same time. This has the possibility of blowing most other ALTs out of the water in terms of value. The silk road/bmr/etc. types are going to love this and also libertarians like myself.

I just found out about this today- I saw it on the schedule for the Bitcoin conference and I can't wait to hear more about it.

PS: I did not write the white paper and have no affiliation with this the guys that did- I just think it is really neat.

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[kooke]

This is one of the most innovative merge mined / ALT coin ideas IMO, it's a shame there isn't a thread here on the ALT subforum about it.

It is an idea of a merge mined SHA-256 coin that truly adds anonymity to the Bitcoin network.

Quote:
"Abstract—Bitcoin is the first e-cash system to see widespread
adoption. While Bitcoin offers the potential for new types of
financial interaction, it has significant limitations regarding
privacy. Specifically, because the Bitcoin transaction log is
completely public, users’ privacy is protected only through the
use of pseudonyms. In this paper we propose Zerocoin, a cryptographic extension to Bitcoin that augments the protocol to allow
for fully anonymous currency transactions. Our system uses
standard cryptographic assumptions and does not introduce
new trusted parties or otherwise change the security model of
Bitcoin. We detail Zerocoin’s cryptographic construction, its
integration into Bitcoin, and examine its performance both in
terms of computation and impact on the Bitcoin protocol."

Read more here: http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf

I am going to go on record on saying that this is going to be the new best ALT currency, this is true innovation. They aren't just changing a couple parameters of existing coins. They are actually improving Bitcoin by making it more Anonymous, while creating a new coin at the same time. This has the possibility of blowing most other ALTs out of the water. The silk road/bmr/etc. types are going to love and also libertarians like myself.

I just found out about this today- I saw it on the schedule for the Bitcoin conference and I can't wait to hear more about it.

PS: I did not write the white paper and have no affiliation with this idea- I just think it is really neat.

This concept has a lot of promise. I hope they implement it.

[Aahzman]

Sounds awesome.

[Hydroponica]

From what I've noticed, and I could be wrong, but Stratum has made merged mining obsolete, because most of the merged minable coins, are still getwork...I noticed that with NMC on Slush's pool, anyways

[CoinHoarder]

From what I've noticed, and I could be wrong, but Stratum has made merged mining obsolete, because most of the merged minable coins, are still getwork...I noticed that with NMC on Slush's pool, anyways

I'm guessing there are ways to merge mine with Stratum, and they probably already have thought about that- this is a rather new idea. I will learn more about it at the Bitcoin conference, where one of the guys that wrote the whitepaper is speaking about it.

Here's an article on Forbes: http://www.forbes.com/sites/andygreenberg/2013/04/12/zerocoin-add-on-for-bitcoin-could-make-it-truly-anonymous-and-untraceable/

[CoinHoarder]

Also, I wanted to mention that as Bitcoin gets more and more popular, the more Governments are going to want to get involved. Let's face it the block chain is not completely anonymous. There is a paper trail- an account ledger for every address and transaction. Making cryptocoins more anonymous would help to avoid Government intrusion. Also, this will be backed by ASICs making the network really secure.

[Hydroponica]

Also, I wanted to mention that as Bitcoin gets more and more popular, the more Governments are going to want to get involved. Let's face it the block chain is not completely anonymous. There is a paper trail- an account ledger for every address and transaction. Making cryptocoins more anonymous would help to avoid Government intrusion. Also, this will be backed by ASICs making the network really secure.

If you convert BTC into USD, and deposit it into your bank account, you better claim it on your taxes.

[CoinHoarder]

If you convert BTC into USD, and deposit it into your bank account, you better claim it on your taxes.

Sure, I agree you should always pay taxes on income.

However, as Bitcoin becomes more accepted at different stores and sites, doing Bitcoin business transactions that do not involve FIAT would be impossible to trace by the Government with ZeroCoin implemented.

[limitless]

Which leads us to the fundamental problem.

Inability to pay taxes means the whole economical system goes down.

No taxes = no economy. It's basic. A state, a government cannot function without taxes, they are essential for a countrys development.

And because you can't tax zerocoin, most probably governments will outlaw any legal transactions with zerocoins. So exchanges will not be able to trade these coins legally. They will still be used, but their value would be almost 0.

See my point? Which is also where bitcoin is heading if it can't be taxed. If bitcoin is to be universally adopted, it would have to be regulated.

Which kinda sucks. Don't get me wrong, I don't like the idea.

[Rave]

No taxes = no economy. It's basic. A state, a government cannot function without taxes, they are essential for a countrys development.

OMG! We're all gonna die!!!!!

Give me ZeroCoins and hail Discordia. Thanks.

[CoinHoarder]

Which leads us to the fundamental problem.

Inability to pay taxes means the whole economical system goes down.

No taxes = no economy. It's basic. A state, a government cannot function without taxes, they are essential for a countrys development.

And because you can't tax zerocoin, most probably governments will outlaw any legal transactions with zerocoins. So exchanges will not be able to trade these coins legally. They will still be used, but their value would be almost 0.

See my point? Which is also where bitcoin is heading if it can't be taxed. If bitcoin is to be universally adopted, it would have to be regulated.

Which kinda sucks. Don't get me wrong, I don't like the idea.

You bring up some valid points about taxes, however I think you overestimate the Governments control if this were to be implemented into Bitcoin. Also, many people feel that the Government wastes our tax dollars on unnecessary policies, this would enable us the people to take back financial control of our government, a truly democratic financial model. Simply make each person pay for what services they need or want. If they don't want protection from the police, they don't have to pay for it. If they don't want to fund a war across the ocean, they don't have to pay for it, etc.

The TOR network for example would be a prime place to have a ZeroCoin/Bitcoin exchange. Even though most tax system run on the honor system, the Government cannot tax you for an amount if they don't know how much it is or who owns it- ZeroCoin makes transactions completely anonymous. As long as the Bitcoin network is safe, then this idea could work if someone was to never exchange into FIAT and just buy things with their Bitcoins. I imagine there will be many many places that accept Bitcoins in about 10 years.

[limitless]

Yes but FIAT currency has gold as backup.

Bitcoin has FIAT currency as backup.

Something to report to.

Bitcoin would be worthless without the dollar.

So in order for an exchange to actually work, one would have to exchange these bitcoins into stuff that actually have value, like gold or fiat currency.
Either that, or simply just convert all currency to bitcoins, which would be impossible in the next 50-100 years.
In order for bitcoin to have value, people need to offer services and goods in exchange for bitcoins. Then they need to actually be able to do something with those bitcoins in order to get value out of them (i.e. exchange them for money so they can pay their bills/food/etc.).

Do you see my point?
You can have as many exchanges as you'd like. If it's illegal you won't be able to convert the bitcoins to currency. Which means they would be worthless, as FIAT is what gives everything value.

So the bitcoin idea is fundamentally flawed. Unless it can be taxed.

[Rave]

Yes but FIAT currency has gold as backup.

Sure xD

[CoinHoarder]

Yes but FIAT currency has gold as backup.

Bitcoin has FIAT currency as backup.

Something to report to.

Bitcoin would be worthless without the dollar.

So in order for an exchange to actually work, one would have to exchange these bitcoins into stuff that actually have value, like gold or fiat currency.
Either that, or simply just convert all currency to bitcoins, which would be impossible in the next 50-100 years.
In order for bitcoin to have value, people need to offer services and goods in exchange for bitcoins. Then they need to actually be able to do something with those bitcoins in order to get value out of them (i.e. exchange them for money so they can pay their bills/food/etc.).

Do you see my point?
You can have as many exchanges as you'd like. If it's illegal you won't be able to convert the bitcoins to currency. Which means they would be worthless, as FIAT is what gives everything value.

So the bitcoin idea is fundamentally flawed. Unless it can be taxed.

If every store, everybody, and everything accepted Bitcoin, then there would be no need for FIAT. It's value would still be upheld by the free market and everyone could do with Bitcoin anything they could ever wish to do with FIAT. Bitcoin is only going to get more and more adopted, its popularity is growing at an exponential rate.

Also, since 1971 the dollar is no longer backed by gold or silver.

[limitless]

What about people that don't have computers? How do you expect them to pay? ^_^

And every national bank has a gold reserve man. No economy classes ?

[limitless]

And if everything accepted bitcoins and nobody paid taxes, how would you pay the state to provide services like: police, emergency services, infrastructure, public services, public buildings, etc?

[CoinHoarder]

What about people that don't have computers? How do you expect them to pay? ^_^

And every national bank has a gold reserve man. No economy classes ?

They can use FIAT.

Imagine the guy at the cash register saying "cash, debit, credit, or Bitcoin?"  

[limitless]

In order for that to happen, you'd have to tax it m8

Otherwise tax evasion can happen through the use of bitcoin which won't be accepted by any government.

Of course, once it's taxed, it has to be regulated.

And this is against all that bitcoin stands for.. :-s

But a middle way will probably be found.

[CoinHoarder]

And if everything accepted bitcoins and nobody paid taxes, how would you pay the state to provide services like: police, emergency services, infrastructure, public services, public buildings, etc?

This is a very libertarianish idea, but it's simple- each person chooses whether they want to have those services. If they do, then they have to pay for them. If they don't, then they won't get the services and don't have to pay for them.

[CoinHoarder]

In order for that to happen, you'd have to tax it m8

Otherwise tax evasion can happen through the use of bitcoin which won't be accepted by any government.

Of course, once it's taxed, it has to be regulated.

And this is against all that bitcoin stands for.. :-s

But a middle way will probably be found.

You think tax evasion is not already happening with Bitcoin and other cryptocurrencies?  

ZeroCoin would make it even easier. The government would have to change their whole tax infrastructure. Someone would have to pay for each government service they would like to receive.

This is peer to peer, to stop ZeroCoin they would have to kill Bitcoin itself, and with TOR-like services I don't see how it could be stopped considering if Bitcoin was widely accepted.

[limitless]

And this is the problem man!

If more and more people commit tax evasion like this, someone is bound to make it illegal.

And if it's going to be illegal, exchanges will be shut down.

And guess what? No more tax evasion ^_^

[CoinHoarder]

And this is the problem man!

If more and more people commit tax evasion like this, someone is bound to make it illegal.

And if it's going to be illegal, exchanges will be shut down.

And guess what? No more tax evasion ^_^

You are so focused on FIAT.... the world does not have to revolve around FIAT.

There is no need for exchanges if you can spend Bitcoin everywhere.

[limitless]

Yeah I understand. But how would the state function then?

Schools, hospitals, police, emergency units, parks, roads EVERYTHING is paid for with tax money.

How would this work if bitcoin is not to be regulated?

[Rave]

Yeah I understand. But how would the state function then?

Schools, hospitals, police, emergency units, parks, roads EVERYTHING is paid for with tax money.

How would this work if bitcoin is not to be regulated?

This is a very libertarianish idea, but it's simple- each person chooses whether they want to have those services. If they do, then they have to pay for them. If they don't, then they won't get the services and don't have to pay for them.

[limitless]

Alright, we're making some progress. But the whole system needs to be revamped, to implement bitcoin.

Not saying it couldn't be done

Don't get me wrong. I too dream of a future like in sci-fi movies or games where we would pay with "credits" instantly and everywhere anywhere

[CoinHoarder]

Yeah I understand. But how would the state function then?

Schools, hospitals, police, emergency units, parks, roads EVERYTHING is paid for with tax money.

How would this work if bitcoin is not to be regulated?

That's the thing, the Government would have to figure that out.. this cannot be stopped if implemented. They would have to take down the Bitcoin network.

If everyone started using Bitcoins for everyday transactions, the Government would be cut out of all revenue streams.

Like I said earlier, if this were to get really popular, to pay for schools, hospitals, police, emergency units, parks, roads, etc., people would have to pay for each government service they want, instead of it just automatically coming out of taxes.

An added benefit is people would not have to pay for services they don't want and wars they don't want to fight.

[kooke]

And if everything accepted bitcoins and nobody paid taxes, how would you pay the state to provide services like: police, emergency services, infrastructure, public services, public buildings, etc?

And jails, to hold scum like limitless.

[CoinHoarder]

And if everything accepted bitcoins and nobody paid taxes, how would you pay the state to provide services like: police, emergency services, infrastructure, public services, public buildings, etc?

And jails, to hold scum like limitless.

Everyone would have to pay for jails if they want to be protected from criminals, other wise they will be exiled to Criminal Island. 

Just joking.. obviously there are social problems that this could possibly cause, but I believe there will always be some way to work these issues out other than the current tax system. Just because taxes have been done like they have been for years, it doesn't mean that it's not subject to change.

[Ignore@YourPeril]

Why does ZeroCoin need a backing currency? What is the obstacle for having this as a blockchain version of OT, where the miners is granted the right to commit a certain number of un-backed Zerocoins for each mined block as coin-generation (bitcoin style)?

[mmeijeri]

If I understand it correctly only someone who has previously "blinded" the coin can later exchange it for someone else's cash, using the secret information he used to blind the original coin. If only the miner knows, only the miner can later redeem it, or he has to transfer it to someone else, in which case it is no longer untraceable.

[Ignore@YourPeril]

If I understand it correctly only someone who has previously "blinded" the coin can later exchange it for someone else's cash, using the secret information he used to blind the original coin. If only the miner knows, only the miner can later redeem it, or he has to transfer it to someone else, in which case it is no longer untraceable.

Hmm, I can´t see how it can be relevant to anonymity if a miner commits something out of thin air (generates coins) rather than having it pegged to some backing coin coming from an address. Let's say the miner commits a coin he himself generates, in the example of the paper. Why should he not do it all himself rather than first generate it and then wait to blind it in a transaction for the next miner to include in her block?

[mmeijeri]

Only the person who blinds a coin knows its "secret serial number" which is needed to exchange it for the money that was put up by someone who blinded a previous amount.

[Ignore@YourPeril]

But I am not suggesting for it to be exchanged for money, but rather just pairing it with another blinded coin made from thin air, comitted by the receiver of the transaction, together with the proof. So we will not have any addresses ever, just pairing of committed secret serial numbers with the proofs in between. Let's say we have miner generated coins Mc1-Mc3 in the first 3 blocks. Then miner 3 wants to transact his coin over to user 1 (non miner). User 1 makes a coin Uc1, just like the miners, and sends it to miner 3. Miner 3 then pairs this with his own proof Mp3 and publishes it to be taken from some random other (here miner 1). Then you have the following after block 4 (who is registering the transaction):

Mc1-(Mp3-Uc1)
Mc2
Mc3
Mc4

Miner 3 can´t re-use his proof, so he has not got his coin anymore. The other 3 miners have yet to publish their proofs, beside User 1. So still only 4 coins in circulation.

[cryptohunter]

Yeah I understand. But how would the state function then?

Schools, hospitals, police, emergency units, parks, roads EVERYTHING is paid for with tax money.

How would this work if bitcoin is not to be regulated?

The goverment will still take in more than enough from it's other million stealth taxes, i'm sure it could do away with income tax altogether already, shove another 10% on vat, and fuel tax, council tax etc etc. They don't really need to worry to much about income tax. People who earn millions/squillions through bitcoins or anything else tend to lead a more expensive life style or whats the the point of having all that cash so pump most of it back into the economy and tax is extracted.  Most self employed people hardly pay any taxes anyway by the time all of their 'costs' are put through by their accountant. They don't really care as long as you keep spending. If you make bank with bitcoin and go out blowing your wad they are still getting more than their fair share.

Pay as you need - except core services (which mostly come out of council tax here anyway) is the way to go. Most of the tax is burned up in this country by bailing out banks, wars and paying the bloated government wages.

Bitcoin could allow you to escape some tax but when they want their taxes they will take them in ways bitcoin can't save you from. If you own a house, car, or want to purchase any mass produced physical product you will be paying tax in one way or another..

 

[Sawtoothsquid]

Pay for the services you want?
I can see it now

911: 911 What is your emergency?
Caller: My house is on fire.
911: Our database shows you have not paid for fire services.
Caller: I didn't think I would need them.
911: We will immediately dispatch fire trucks for your neighbors to protect their homes from your flaming structure. We also suggest you get a lawyer for the law suits the neighbors will file against you for negligence and property damage.

[cryptohunter]

Pay for the services you want?
I can see it now

911: 911 What is your emergency?
Caller: My house is on fire.
911: Our database shows you have not paid for fire services.
Caller: I didn't think I would need them.
911: We will immediately dispatch fire trucks for your neighbors to protect their homes from your flaming structure. We also suggest you get a lawyer for the law suits the neighbors will file against you for negligence and property damage.

that basically a core service, council tax should cover this along with police, trash removal etc.

[CoinHoarder]

Bump- the ZeroCoin speech was IMO one of the most interesting speeches at the bitcoin conference. There was a large showing for this speech, hinting at there being a lot of support for it. Gavin, the main core dev for Bitcoin, even mentioned it during his state of the union speech. He expressed his support for the project.

Also, to those worrying about governments breaking down due to not being able to collect taxes, this is silly. All ZeroCoin does is make bitcoin transactions anonymous. The exit and entry points when converting to FIAT will be controlled and regulated just like Bitcoin.

This is going to be huge, the only problem is it will take a long time to implement it. ZeroCoin is heavily cryptographic, much more so than Bitcoin, so there is a lot of challenging programming to be done. Also, the core Bitcoin code must be altered as well.

[thisnewcoin]

sounds interesting.

[YipYip]

Yes but FIAT currency has gold as backup.

Bitcoin has FIAT currency as backup.

Something to report to.

Bitcoin would be worthless without the dollar.

So in order for an exchange to actually work, one would have to exchange these bitcoins into stuff that actually have value, like gold or fiat currency.
Either that, or simply just convert all currency to bitcoins, which would be impossible in the next 50-100 years.
In order for bitcoin to have value, people need to offer services and goods in exchange for bitcoins. Then they need to actually be able to do something with those bitcoins in order to get value out of them (i.e. exchange them for money so they can pay their bills/food/etc.).

Do you see my point?
You can have as many exchanges as you'd like. If it's illegal you won't be able to convert the bitcoins to currency. Which means they would be worthless, as FIAT is what gives everything value.

So the bitcoin idea is fundamentally flawed. Unless it can be taxed.

be quite the adults are talking

[shiv]

Yes but FIAT currency has gold as backup.

https://i.imgur.com/L3J6n.jpg

[frobley]

^^ LOL ^^

[TsuyokuNaritai]

Yes but FIAT currency has gold as backup.

Bitcoin has FIAT currency as backup.

So the bitcoin idea is fundamentally flawed. Unless it can be taxed.

[mmeijeri]

Could we get back to discussing the actual article?

[digitalindustry]

Did someone really say that fiat has gold backup ?

which Nation Champ ?!

: D

oh ShA-256 ? ... why bother guys ? why don't you 14 guys just send each other Bitcoin?

: D


ASIC   8=========D     Bitcoin.

[Jowbob]

Yes but FIAT currency has gold as backup.

[Affilate User]

any update?