Comparing xNAV with Other Privacy-Enhanced Coins
Navcoin allows anyone to make peer to peer (P2P) transactions that are either public via NAV or completely anonymous through xNAV. Our novel and revolutionary privacy protocol, blsCT, underpins xNAV and compares extremely favorably to the offerings of a number of other leading privacy coin projects including Monero, Zcash, PIVX and with Firo progressing as an emerging solution. We will compare the feature set of xNAV with the one of these four coins to determine just how they all match up.
Getting Off to a Solid Start
Navcoin users enjoy a wide range of features including anonymous transactions, encrypted messaging and Atomic Swaps. Our network also facilitates highly scalable, fast and low fee transactions that can be public in nature if desired. This set of features make Navcoin a privacy project that holds its own when compared to projects of a similar nature.
When comparing privacy focused cryptocurrencies, it is important to note that there is not one single way of ensuring the anonymity of transactions across a network, and that there are in fact multiple approaches that can be successfully implemented to achieve privacy and anonymity.
With that said we can start to compare how a group of privacy projects came to be, and which technologies each of these projects utilises to ensure anonymity. Navcoin started without a pre-mine or ICO and after a hard fork in 2016 that led to a technology upgrade, a new blockchain and genesis block was created. Crucially, all of the Navcoin privacy technology proposals (NavTech and xNAV) came to life without the need for a trusted setup, which sees a set of initial parameters being created with the expectation that they will be destroyed at a later stage. Remarking this important fact, xNAV does not require a trusted setup at all, so the activation of xNAV maintains a fully trustless network and relies purely on battle-tested cryptographic assumptions.
Trusted setups require full trust in that the parameters will be destroyed and not kept for future gains. To touch on this some more using Zcash as an example, Zcash makes use of zkSNARK technology, which requires a trusted setup. A key issue with that is if the trusted setup is dishonest, the participants of that setup will be able to continuously create coins without anyone noticing. As a result, users must place their full faith in the participants of the ZCash’ trusted setup ceremony. Other projects like PIVX have reused the trusted setup from ZCash and thus require trust in members outside of their community.
For other protocols that do not require a trusted setup, like xNAV, Monero or Firo, a situation in which the rules of the protocol are broken can only occur if the cryptography that it makes use of is fundamentally broken, or if the protocol itself is wrongly implemented.
What are the alternatives to blsCT?
Before diving into blsCT alternatives, let us start by reiterating the benefits of blsCT itself. The blsCT protocol combines Boneh-Lynn-Shacham (BLS) Signatures and Confidential Transactions (CT), and is thus capable of both encrypting transaction value amounts via CT, and enabling a group of signatures to be compressed into a single compact signature that can be used to authenticate the entire group using BLS.
Looking at blsCT alternatives, we will start by looking at Monero. Monero takes a similar approach as xNAV by combining Confidential Transactions with an aggregatable signature scheme (although not BLS as with xNAV). Monero’s protocol is named RingCT, as the group of signers form what is called a ring from which it is impossible to discern which one created the signature. This is similar to how the aggregated signatures of BLS work.
By default, Monero’s ring size is 11. One can also refer to this number as the anonymity set size. Its value means that for a single transaction the real sender is hidden in a group with other 10 possible senders. Therefore the chances to guess which one is the real previous output of a transaction is one over eleven.
In contrast to xNAV, where the default number of possible signatures is 5, Monero does not allow increasing the ring size by aggregating transactions, and thus misses out on all the benefits that blsCT provides at the time of aggregating transactions at the block level. In practical terms, this means that even if the default ring size of xNAV is smaller than Monero’s, xNAV’s anonymity size can increase to the level of hundreds or thousands at the block level in moments where the transaction volume is very high.
Zcash and PIVX both make use of zkSNARK technology, which stands for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. The utilisation of zkSNARKs allows to prove the possession of certain information pertaining to the transaction without actually revealing the information. Coins using zkSNARKs like Zcash and PIVX have anonymity sets of 2³². Although this number can seem very high and seem to provide the highest sense of anonymity, one must be aware of the dangers of the use of a trusted setup, which we have touched on in a previous section of this article.
Firo makes use of their innovative protocol Lelantus, which is technically also a combination of Confidential Transactions based on Bulletproofs with a reiteration of the well studied 1-Out-Of-Many proving scheme created by J. Groth. Although its anonymity size is higher than xNAV’s, it misses out on some of our protocol’s biggest advantages like aggregation at the block level, the mixing rewards scheme, compatibility with the prune mode, and scripting support.
Each system has its own particular set of features and benefits, and we will now try to further compare these by outlining some of the benefits of xNAV and blsCT in more detail.
How xNAV/blsCT Compare
Speed. As previously mentioned, the blsCT protocol enables a group of signatures to be compressed into a single compact signature that can be used to authenticate the entire group. The protocol also allows for further aggregation of transactions by merging multiple blsCT transactions into one. This helps with speed and scalability and xNAV compares very well when looking at proving times or the amount of time it takes to verify a proof. It takes 300 ms for this to be completed with xNAV while Monero takes approximately 1 second, Firo between 1.5 to 5 seconds, while both Zcash and PIVX take anywhere from 1 to 20 seconds. With regards to verification times, or how long it takes a wallet to verify that a proof is valid, it takes 80 ms with xNAV, Monero takes 30 ms, Firo between 15 to 50 ms, and Zcash and PIVX take 8 ms.
Scalability. Once again, blsCT is well suited at achieving scalability and allows extremely high volumes of transactions to be successfully processed. In addition, xNAV is compatible with the UTXO model, which allows nodes to function in the pruned mode. This means that a node does not need to store the entire transaction history to keep validating transactions. This is great in terms of being able to successfully manage the size of the blockchain, which will continue to grow as its transactions increase year after year. A prunable node system is unique to xNAV in this comparison and is not supported by Monero, Firo, Zcash or PIVX.
Transaction Fees. The aggregatable nature of blsCT transactions facilitates fast and highly scalable transactions that can also be processed for a low fee. Navcoin employs a Proof of Stake (PoS) consensus mechanism which integrates a network of node runners validating transactions for a reward. While there is a very low fee structure across the network, Navcoin node operators can also earn via staking, and taking part in the xNAV coin mixing process which facilitates the merging of users’ coins in order to ensure that transactions remain anonymous.
Network Size. An important parameter for privacy coin users to consider is the anonymity set size. This refers to the total amount of coins held by other users that are using the same protocol, and this set allows a sender of a transaction to hide within a group of possible senders.
The higher the anonymity set size number, the bigger the crowd for an individual to hide in, and thus the more difficult it is to identify that individual within the crowd. We can openly admit that for a new protocol like blsCT, the anonymity set size will not be comparable to coins that have been active for longer. But we will work very hard to increase the use of xNAV and thereby improve the size of our anonymity set, and we at the Navcoin Core team are very confident that it will do so very quickly.
The fact that xNAV holders can earn coins simply by participating in the mixing process will likely act as a great incentive from which the anonymity set size will increase. On top of this, we will put a lot of effort into communicating and educating people about the technology, so that one can feel excited about the benefits of using xNAV and choose it as their preferred way of transacting privately.
Having looked at the benefits of blsCT and comparing its features with those of other privacy coins, we can now look at other important factors that determine the effectiveness of a privacy preserving digital currency.
User Focused Solutions
As we can see, xNAV and its underlying privacy protocol blsCT compares extremely well with other privacy projects. In addition, we place our community at the center of everything that we do and we strive to create easy to use solutions that a wide range of people can interact with regardless of their tech competence levels.
This manifests itself in easy to use wallets such as the Navcoin Core and NavCash wallets, intuitive staking processes, and additional features including encrypted messaging and Atomic Swaps. The ability to attach an encrypted message to xNAV transactions allows our network users to communicate securely and also allows xNAV transfers to remain compliant with the Financial Action Task Force (FATF) travel rule. Here, exchanges must provide information on crypto transfers regarding the originator and beneficiary in the same way as with bank transfers so that the details can be checked as required. Navcoin integrates this type of messaging with xNAV transfers and both Zcash and PIVX also support encrypted messaging.
Additionally, our development work to support scripting makes coin timelocks and multisignature accounts possible. This work also underpins Atomic Swaps allowing our users to directly swap digital assets without having to employ the services of a third party. Users remain in control of their funds and can simply arrange to swap cryptocurrencies efficiently and securely without needing an exchange or OTC desk for example.
We take privacy, security, and user friendliness very seriously, and we work tirelessly in order to develop solutions that empower our users to take control of their financial operations and protect their privacy as they desire. While there are many ways to achieve privacy, our blsCT protocol and xNAV currency combine to provide our users with a unique set of features that compare very well with other leading privacy projects. We at Navcoin will continue to push boundaries and innovate in order to provide our community with cutting edge solutions that enable them to remain secure, resilient, and protected in an ever changing world.