Forks of major cryptocurrencies have been the toast of 2018. In 2017, the ICO market was a picture book of turbulent behavior. It’s increasing uncertainty and great rise and fall saw major regulatory agencies getting involved with large-scale ICOs. The involvement of regulatory bodies, however, should not be feared, as it would allow for a flood of institutional money into the crypto space. But due to this increased scrutiny, major development teams have put their efforts into the new creation of a coin; a fork.
There are two types of forks; soft and hard. In a soft fork, the underlying code is updated and only one crypto exists. In the other instance, the underlying code is updated, the coin “splits” and a new coin is provided with the updated code, while the older coin remains. This results in the original coin holders receiving a second ‘forked’ coin.
The excessive number of forks over 2017-2018 from Bitcoin God to Bitcoin Gold demonstrates the interest that the development teams have placed in the creation of a forked coin.
In March 2018, Bitcoin was forked once again. While other forks from bitcoin have been high profile and managed to draw attention worldwide, this one was a tad quiet. Bitcoin Private was not exactly like it’s preceding digital forks from BTC. It was not created directly down from Bitcoin, as with popular currencies like Bitcoin Cash and Bitcoin Gold, but was stemmed from a copy of a digital currency known as Zclassic, which itself was a fork of Zcash, and which in turn was a copy of the original Bitcoin.
So, a fork of a fork of a fork?
A rather formal definition would be that Bitcoin Private (BTCP) is a first of its kind “fork-merge” of Bitcoin (BTC) and Zclassic (ZCL). The goal was to combine the embedded privacy features from Zclassic with the resilience, security, and market awareness of Bitcoin.
Bitcoin Private may be one in a long list of new forks donning the ‘Bitcoin’ prefix, but the zk-SNARKs privacy features inherited from Zclassic that combine with the name ‘Bitcoin’ alone are enough to ensure mass adoption. But even to convince the most shrewd crypto-analysts, incorporating the privacy technology which is missing from the BTC currently, BTCP surely has a leg above the other BTC forks.
At this point, it must seem annoying to not know about the zk-SNARKs. Sweat not.
What are zk-SNARKs?
Zcash was the first widespread application of zk-SNARKs, a novel form of cryptography protocols. The strong privacy guarantee of Zcash, which is pertinent in the subject; Bitcoin Private, is derived from the fact that shielded transactions in Zcash can be fully encrypted on the blockchain, yet they can still be verified as valid under the network’s consensus rules by using zk-SNARK proofs.
The acronym zk-SNARK stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge,” and refers to a proof construction where one can prove possession of certain information, e.g. a secret key, without revealing that information and without any interaction between the prover and the verifier.
In Bitcoin, transactions are validated by linking the sender address, receiver address, and input/output values on the public blockchain. In a system that compromises usage of zk-SNARKs to prove that the conditions for a valid transaction have been satisfied, no crucial information about the addresses or values involved is revealed.
“Zero-knowledge” proofs allow one party (the prover) to prove to another (the verifier), that a statement is true, without revealing any information beyond the validity of the statement itself. For example, given the hash of a random number, the prover could convince the verifier that there indeed exists a number with this hash value, without revealing what it is. The difference between “Proof” and “Argument” is quite technical so we’ll quietly leave it at that.
How did Bitcoin Private come into existence?
In many cases, hard forks have proven to be immediately successful, providing holders of the earlier versions of those cryptocurrencies with fast cash. Ethereum Classic and Bitcoin Cash are two examples of this and both were airdropped cryptocurrencies, meaning that at the time they were launched, any investor who held the original digital token would receive a proportional amount of the new cryptocurrency as well.
However, a fork isn’t always a success story. One of the predecessors of BTCP, the Zclassic flattened throughout most of 2017, falling to a meager under $2 per coin while the Zcash stayed firm. Rather than throwing in the towel, the creator Rhett Creighton decided to double down.
I would like to propose revitalizing zclassic by migrating it to become a bitcoin hard fork, ‘Bitcoin Private’ (or possibly another name),
Bitcoin Private is perhaps the pinnacle of the forking phenomenon and has garnered a significant amount of interest for distributing new, free coins to users of not just one existing blockchain but two; Zclassic and Bitcoin.
By forking a code base, a user’s private key can be made to access multiple wallets. This phenomenon is however criticized on security grounds, Creighton sees it as an important feature for the future.
So you have in the case of bitcoin, all these people have their private keys, but when forks spring up now the same private key can be used in different peer-to-peer networks. It seems to be a key piece to the technology.
Bitcoin Private was originally proposed on Twitter by Rhett Creighton, founder of Zclassic. Since then, others came into the fold including Jacob Brutman, Giuseppe Stuto, Jon Layton, Christopher Sulmone, and Geoff Hopkins who helped author the Bitcoin Private whitepaper. Bitcoin private team now includes over 200 contributors and 20 engineers.
Bitcoin Private compared to other BTC forks
As stated earlier, with the sheer combination of privacy protection and encryption that Bitcoin Private offers, combining intrinsically with Bitcoin’s market administration and repertoire, it is hard to envisage any reason that one would prefer the previous of the forks over the prodigal child.
Analyzing strictly via statistics, a high distinction that the BTCP carries compared to the Zclassic is that 20% of the founder’s fee is reinstated.
It was a drastic measure taken by Creighton and team in the implementation of Zclassic that they removed a 20% share for the development team from any cryptocurrency generated by mining. According to Creighton, it violated the rights of miners for a reasonable reward and hence was removed from the Zclassic.
This became a good initiative and invited a lot of investors into the fray, but it was anything but a long-term initiative. The cryptocurrency eventually could not keep pace and it’s wallet caused problems. There was no development fund for the developers to work with and rectify the issues. The currency was recently shut down by Bittrex due to persistent problems that the wallet faced.
Bitcoin Private adheres to the need of the founder’s share and reinstates it into the new fork, while also admitting to the failure that Zclassic had faced.
According to its white paper,
Zclassic suffered from the same ideas which it derived its greatness: the absence of a founder’s tax led to a lack of active development.
Still, to many, the Bitcoin Private is just another Zcash. Ethereum creator Vitalik Buterin even displayed some confusion, if not disapproval, after a Twitter user linked Buterin’s praise of zk-snarks privacy technology to bitcoin private. Tweeting in reply he stated,
Why not just use zcash?
— Vitalik Non-giver of Ether (@VitalikButerin) February 27, 2018
Plus, a number of crypto enthusiasts have become irritated at the rate of hard forks being introduced, using only slight variations of long-established cryptocurrencies’ names, which many think are confusing the industry and exacerbating scams.
Yet Creighton remains bullish about BTCP’s prospects. He said:
We’re going to be tapping into all of the people that are key holders of bitcoin, so we’re tapping into that network, and what we’re giving those people is zk-snarks privacy, plus the same decentralized mining as bitcoin gold, plus faster block times and larger blocks.
Compared to Bitcoin Cash (BCH), which is the most expensive fork to date of BTC with a price of around $479 at the time of writing, BTCP shows encouraging prospects.
BCH only sped up transaction speed of BTC and hence made it cheaper to transact. BTCP did the same thing; faster transactions and less expensive to transact. This, alongside the privacy features it already takes upon, means BTCP is well enabled to compete with other privacy coins at a high degree of competitiveness while also working efficiently compared to other forks.
Bitcoin Private price analysis
Bitcoin Private was issued using a 1:1 airdrop (1 BTCP per ZCL and BTC) which took place on February 28, 2018. This has led to most of the circulating coin supply distributed among early BTC and ZCL holders.
Circulating coin supply: 20.3 million
Total coin supply: 21 million
Block reward: 1.5625 BTCP
Block time: 2.5 min
Block size: 2 MB
Halving schedule: 210,000 blocks
Mining algorithm: Equihash
Privacy protocol: zk-SNARKs
The creation BTCP as a result of the co-fork between BTC and ZCL took place on March 1, 2018. The coin began trading a few days later and on March 12, peaked to over $88.
Now that many of the sellers have sold off their holdings, BTCP should rally very nicely with the overall cryptocurrency markets.