CloakCoin Project Rundown interview
Interview with Cloakcoin on Altcoin Magazine
CloakCoin was introduced in 2014 with the aim of enabling people to use a coin that would provide total privacy, in a world that is more and more encroaching on the freedom of its population, stating real and perceived threats to national security as a reason to ‘protect’ its citizens.
Stefan Kender you are the project manager of CloakCoin. Tell us please why does the company exist? What is its main value proposition?
As we careen toward the digital dystopia of a cashless society the world needs a digital equivalent to cash. One that can be spent freely without the need to ask permission from a 3rd party, or blindly trust that they care for your best interests. Privacy is the ability to express yourself freely and how you spend your money is most definitely an expression of freedom. CloakCoin provides users with a means of conducting untraceable transactions while maintaining an auditable money supply — a fungible store of value.
After a three-year development phase, the team published the transaction system Enigma in hold of the open source license. An Enigma transaction cannot be traced back, sender and recipient cannot be identified. Data are neither recorded, nor saved online. Can you tell us more about Enigma?
CloakCoin is a peer to peer network that communicates over our own implementation of onion-routing (TOR) that we call CloakShield. Then to protect their transactions from being traced in future, we designed and built Enigma from scratch. It’s a decentralised mixing service that runs on the nodes, which are simply users staking coins with their wallets connected to the network. We opted to stay away from masternodes in favour of being as decentralised as we possibly can. Imagine bitcoin as a proof of stake network whereby every wallet is a TOR node that also runs a mixing service.
What about Enigma transaction fees?
To understand Enigma fees, which are paid by the sender, to other users that help to mix transactions, you need to picture how they work. Instead of sending coins to a single address on the blockchain, you secretly asked a bunch of people to do it on your behalf, in completely random amounts, from completely random addresses, to completely random addresses, that only the intended recipient holds the keys to. When you do so, those who helped you out receive a small amount that is added to your transaction amount as a reward for their efforts. This is all automated and anonymous, of course, and costs the sender from 1% down to 0.2% depending on the transaction amount. It’s a small priced to pay for complete anonymity and our users can rest assured that the fee goes to the 5 to 25 other users that assist in ‘Cloaking’ the transaction. The sender has the option to choose how many users and the fee is split between the users randomly.
What prevents others from copying you and how is your system different from others available providing private, secure, decentralized and untraceable digital monetary transactions?
As with any truly open source project, there’s nothing stopping others from copying us. In fact, it’s encouraged that developers come and contribute their improvements. As is the nature of a decentralised consensus, if the network decides they prefer a proposed change over the current code, the network itself will determine how to proceed. What makes CloakCoin different is the fact that anyone can #VerifyOurSupply and we encourage it. Because our anonymity features are handled off-chain by nodes on our peer to peer Proof of Stake network, comprising holders staking their coins, we don’t face the issues of inflation bugs. Our blockchain is completely transparent. It’s the use of our wallet technology that protects our users. The concept is simple but effective, and it’s much easier for the average Joe to understand. For example, there are only a handful of people in the world that understand how Zcash works, so it can be quite confronting for an average user to place their trust in such a system. Of course though, we are still so early in terms of adoption that we exist in an echo chamber of innovators. The space is still a long way from reaching the early majority when it comes to crypto product market fit and the adoption curve.
The resource-efficient Proof-of-Stake algorithm is used for the coin-creation. Tell us more about CLOAK. How can users benefit from holding CLOAK?
Our users love staking their CloakCoins and in return they earn 6% per annum paid out in CLOAK. Like any other Proof of Stake network, the means of consensus involves holding your coins as a stake in the network and in doing so you are helping secure the network. Rather than burning through loads of electricity with Proof of Work and ‘mining’ coins, you are acting in a much more energy efficient manner and ‘minting’ coins. Many people have a misconception when it comes to Proof of Stake because they are concerned that there is no cap for total coin supply. But in actual fact, if you are staking, you maintain your % stake in the network and don’t experience any inflation, you continue to hold your same portion of the network. That is very different to fiat currencies of course, where you don’t know when new currency is minted, and you don’t get your share of the newly minted amounts. That’s where you see currency being devalued dramatically in countries like Venezuela. The governments continue printing money to fund their failing endeavours, meanwhile the citizens percentage of the total is diminished and so is the value of each dollar, bolivar etc. Also, even though our network pays out a 6% staking reward, the supply is only actually increasing by about 3.5% each year as not all coins get staked. So if you are currently staking, you’re actually experiencing deflationary benefits as your % holdings of the network are increasing relative to those not staking.
CloakCoin is the first cryptocurrency, which is audited by Cognosec, a NASDAQ listed cybersecurity company. At the moment, how do you measure success? What are your metrics?
We like to follow the mantra “If you cannot measure, you cannot improve.” So when we went open source, we thought, why not have a leading German cyber security company try and hack our software to pieces. They identified where we can improve and we got straight into doing so. We publish all the information publicly and we rely on our community who are really passionate about privacy to provide ongoing feedback. They really are the lifeblood of Cloak and without them we would have nothing to strive for. We don’t focus on price, we focus on how many people we can help and on gaining mass adoption. We’ve got some really exciting things to come in terms of adoption.
What is your next “big move”? What are you working on at this moment?
Through our recently announced partnership with Chainsulting, we have a tonne of big milestones we will complete in the near future. They are Germany’s leading blockchain developers and bring a wealth of knowledge and experience to help our team. They will work in partnership with our permanent developers to deliver our codebase upgrade, our new HD wallet interfaces and heaps more amazing improvements. You can find a full list of our partnerships on our website including NEM, Bitcoingarden, CoinPayments, StakeBox and many more!
Who are your partners and who would you like to partner with in the future?
We have a multitude of over 100 vendors accepting CloakCoin who we regard as partners as much as we do our strategic partners. We really love them for all of their support over the past 5 years. Additionally we work with a number of projects through the Proof of Stake Alliance and really pride ourselves on working closely with our advisors. You can find a full list of our partnerships on our website including NEM, Altcointurk, CoinPayments, StakeBox and many more here.
What milestones has the company already achieved and what do you planning to achieve this year?
Recently we celebrated our fifth birthday and this was a huge milestone for us. I am so proud of the team and their achievements. I’ve been very fortunate to have the support of some incredible people and a community that feels more like a family. Cloak truly is a community endeavour and despite some really tough challenges over the years, we are fighting fit and fully committed to the project’s success. I’m really looking forward to closing out some major software development milestones later this year and welcoming the arrival of our dev fund. A mechanism within our upgraded Proof of Stake network that will allow for voting, governance and a specific staking reward that is allocated to paying for developers. We’ve got a long way to go, but to us, this is only just the beginning. Fighting for privacy in the age of surveillance capitalism, is a fight for a human future where we maintain our basic human rights, autonomy and freedom of choice. I’m dedicating my life to the cause and so are my amazing team.
Thank you for your time! Is there anything else you would like to add before we finish?
Pay with Cloak, not your privacy!