Self-funded startup targets most advanced privacy coin.
Throughout 2018, much of the blockchain space was focused on delivering improved scalability so that the smart economies of the future promised by Ethereum and NEO can be realized. This bandwagon still hasn’t ended its journey; rather, more projects are beginning to align themselves with this focus.
Smart economies are not the only thing blockchains can provide.
One of the key functionalities of the blockchain is to enable a wealth storage and value transfer mechanism. Many seek to have this mechanism with anonymity, and it is for that very reason that privacy coins are some of the most prominent cryptocurrencies. Despite the clear demand and potential for privacy coins, that aspect of blockchain technology has been sidelined due to the scramble for scalability. Anonymity is one of the foundational aspects sought through blockchain technology and yet there’s much to be done within this space.
A new blockchain project led by the founder of PIVX and some of the most talented blockchain architects aims to establish a new-generation privacy coin. Veil Project is a development cored on delivering a privacy coin friendly to the masses while forwarding the state of security of a blockchain that is innately for privacy coins. To achieve this, Veil Project is focused on research and development rather than fund-raising. The project is self-funded by the founder and does not involve any ICO or IEO. This ensures the team has one focus: delivering the most advanced privacy coin.
Technology above all else
Technologies for privacy coins are complex and developing a novel infrastructure from scratch would lead to the use of an untested protocol. Thus, it’s worthwhile to stand on the shoulders of giants and carry forth their achievements.
Zerocoin rather than Zerocash
Bitcoin is the most secure blockchain to date. Veil’s core technology is based on Bitcoin version 0.17.1, and it integrates the Zerocoin privacy protocol. The reason the project uses the Zerocoin Protocol rather than Zerocash is that Zerocoin is one of the most cited in the academic circles of cryptography. It has been tested and challenged time and time again, and it has withstood the eroding effects of the sands of time. Meanwhile, the founder of Zcash admits that the protocol is “new, risky, [and] unproven technology.”
Zerocoin’s RSA cryptography has been tested since the 1970s, and that has given enough time for industry leaders to discover and amend its flaws. Meanwhile, Zcash’s implementation of zkSNARKs is a novel approach that only a handful of industry leaders are knowledgeable of to the degree of being able to test it. This novelty of the protocol limits its security. Thus, Veil’s integration of a tested and proven technology (Zerocoin protocol) ensures that the network does not witness unexpected challenges down the line.
In a blockchain, a controller of many nodes or a supernode that is connected to a large number of nodes can potentially map down the IP address of an originating address by tracking which nodes receive the transaction first. The Dandelion Protocol is a network layer designed to ensure IP anonymity is maintained.
Presently, for transaction source (IP address) to be anonymous, users need to rely on TOR. However, TOR usage can often be congested and, with the growth of blockchain adoption, the reliance on TOR is a hurdle as it’s an external tool that must be relied upon for anonymity. A truly robust network should be able to sustain this anonymity internally. This is even more important for any privacy coin. Dandelion Protocol acts as a network layer that enables IP anonymity without the need for TOR.
Privacy for basecoin transactions
The Zerocoin protocol uses two coin states: Basecoin and Zerocoin.
Basecoin is transparent and does not offer private transactions. This can be converted into zerocoin via a process called “Zerocoin minting”. However, since minting is an incredibly long process and as a percentage of people transfer only basecoin to and from exchanges, many transactions of a Zerocoin Protocol coin are actually not private.
Veil amends this caveat by making the Basecoin transactions private as well. By adding RingCT to its Basecoin transactions, Veil will push for a network where all transactions are private. Thus, there isn’t a need for the user to opt-in to the network privacy; privacy will be the innate and only state of the network.
The decision to turn Basecoin transaction into a private exchange is important. Most users of blockchain technology are still in a novice stage. The tokens they acquire via exchanges are basecoins and due to the fixed denominations required for private Zerocoin transactions, most users opt for Basecoin transactions. Simultaneously, a vast portion of users assume Zerocoin Protocol enables completely private transactions, unbeknownst to them, the privacy aspect only kicks in when zerocoins are minted from the basecoins they have purchased at an exchange. Thus, rather than fighting the wave and pushing for mass education of the masses that adopt the network, Veil opts for the easier solution to make the network transaction all-round private: RingCT is added to Basecoins movements and keeps the transactions private.
While Veil is aggregating and enhancing some of the leading blockchain technologies and network layers into its network, much of the advancement carried by the network is through the development of novel technologies.
The network leverages a dual consensus mechanism. To ensure decentralization, Veil utilizes a hybrid Proof-of-Work/Proof-of-Stake consensus. The addition of hash power adds security to the network and ensures coins are distributed across the community. Additionally, the system’s evolution of the X16R hashing algorithm (proposed by Ravencoin), in the form of X16RT, is more resistant to ASIC development.
As stated above, the network uses a duel consensus mechanism. Thus, users can also stake tokens and become nodes. The project takes a unique view at decentralization that is pinned in reality. Not all members of the Crypto space are attuned to mining — in fact, most aren’t. Thus, providing a means to earn block rewards by staking opens the network to more active nodes securing the network as staking is a far more friendly process for the masses. An added benefit is that a PoS consensus will add energy efficiency factors to the blockchain.
As the use of PoS and privacy for Basecoin transactions point out, Veil Project is pinned on delivering privacy solutions for the masses. Privacy coins need an upgrade in user experience and that means upgrades to the Zercoin Protocol are of essence to the project. Private Zerocoin transactions can presently be done in pre-denominated values and thus limits the usability of the privacy coins for payments that are beyond the denomination coverage. Thus Basecoin transactions become a necessity; therefore, to a large extent, the denomination requirement largely nullifies the value of the privacy coin. To combat this, Veil Project is the first to deliver multi-transaction Zerocoin spends.
This solution cleverly enables users to pack multi-block transactions to make any payment without concerning himself or herself with the denomination limitation.
Veil Technology is a project that goes to the root of what made blockchain technology so valuable: technological breakthroughs. Rather than reinventing the wheel, the project recognizes the success of its predecessors (including Nakamoto himself), and adds development upon the achievements of existing cryptography breakthroughs.
Thus, Veil Project pushes aside the hype factor regularly associated with blockchain developments of today and, instead of hosting an IEO, simply focuses on development and advancement of the use and infrastructure of privacy coins.