Towards Cryptographic Privacy and Trust in Financial Transactions … Meet Halo, zkSnarks and Trusted Setups

I am not an economics professor and have no Bitcoins, so I will not give a long pitch on why the world’s economies should or should not move to cryptocurrency. But, I love the science and maths-related to cryptocurrencies, and in the way that the area has broken down massive barriers in creating a trustworthy, secure and auditable financial infrastructure. One of the major challenges, though, is to move away from the pseudo-anonymous trading of Bitcoin and Ethereum towards something that would be anonymous at the ledger level — Layer 1 in a new finance stack. We could then build overlays on top of this to ensure that we could still trace and audit things. Financial organisations could thus use the Layer 1 ledger and then build auditable systems on top of this. We must not forget the problems of the past, and the way that the auditing of our financial infrastructure almost caused our banking infrastructure to crumble. We thus need improved methods of digitally verifying the transactions undertaken at any point in time, and at any point in the past.

Zcash

At the forefront of this strive towards an anonymous ledger for cryptocurrency has been Zcash (ZEC)— created and developed by the Electric Coin Co. (ECC). For this, we must turn to…