Is Privacy on the Horizen?
It becomes increasingly clear even for non-crypto enthusiasts that cryptocurrencies they heard of, such as bitcoin, might not be as anonymous as they thought they were. It’s great that awareness surrounding crypto is spreading and with it the question of how to handle privacy when transacting on-chain.
While some traders want complete anonymity, others prefer to have a choice. Similarly, businesses such as banks might be able to verify certain transactions publicly, while they’d have to keep other transactions and sensitive information private.
Horizen offers a blockchain ecosystem that enables businesses and individuals to do exactly that: chose the level of privacy they want. They believe in what they call “Responsible Privacy “ — giving people and organizations the choice of who they share their data with and who not.
Horizen is one of the most secure, interoperable blockchain ecosystems that prides itself on running on top of one of the largest and most decentralized node infrastructures. It’s focused on providing businesses with the tools to create their own public or private blockchain infrastructure.
One of the most notable features of Horizen is its sidechain architecture that offers near-endless scalability opening up a variety of real-world use cases.
The Horizen blockchain combines the best from Bitcoin and Zcash. Zcash was the first privacy coin that has ever been created and continues inspiring other privacy cryptocurrencies.
Like Zcash and Bitcoin, the Horizen blockchain uses the Proof of Work consensus algorithm with miners validating transactions using their computing power. The version of PoW used is Equihash. Equihash initially secured the blockchain against ASICs mining which keeps it more decentralized.
ASIC has nothing to do with sports shoes of a similar name but is an acronym for Application-Specific Integrated Circuit. These are electronic circuits solely designed for the purpose of bitcoin mining. ASICS miners are expensive, yet powerful which is why most mining pools use them to generate revenue. However, the downside of Asics mining is that it potentially drives out all individuals that used their GPU to mine.
When the first Equihash miners were released, Horizen decided to keep their algorithm regardless because they saw the benefits outweighing the downsides. Benefits include that ASIC mining would bring more hash power, which helps secure the network against 51% attacks. Engineering efforts were better focused on important matters such as their sidechain infrastructure.
Thanks to the sidechain infrastructure, users can run various sidechain in conjunction with the main chain. This is unique as most blockchain networks allow only a limited set of side-chains to run parallel to the main chain.
The Horizen main chain is stable, established, and secured by a large node network and doesn’t require any information from the side chains. This allows theoretically unlimited scalability as the number of sidechains can be increased indefinitely. Unlike the main chain, sidechains are operated by Supernodes that receive rewards from the main chain and potentially the sidechain. This serves to incentivize the creation of new nodes while at the same time increasing sidechain capability, creating a positive loop.
And with the cross-chain transfer protocol implemented, sidechains stay connected to the parent chain but can still have different consensus algorithm. If a developer wanted to create a sidechain that runs on a Proof-of-Stake algorithm, they could do so without losing any of the capabilities of the parent chain.
When it comes to privacy, as mentioned, the team believes in giving people a choice. As a fork of Zcash, the Horizen native currency ZEN also relies heavily on zksnarks, a specific implementation of zero-knowledge cryptology that allows the verification of transactions without revealing any sensitive information.
When using ZEN, traders can pick between two different types of addresses:
- T addresses: these are your standard address, publicly visible, and have no shielding capabilities
- Z addresses: this address type supports shielding, meaning that all transactions are kept private.
Overall, Horizen is run by a team with a strong background in cryptography, blockchain, finance, and BD, and it shows. The platform they’ve created is well-designed and, with its ability to switch privacy on and off, is a viable option for highly regulated businesses.
The native currency of the Horizen platform will start trading on Bitcoin.com Exchange on Friday, June 18th at 10:00 UTC.