This week was a defining moment for Bitcoin. Elon Musk, our generation’s most influential entrepreneur, has officially sponsored the most significant innovation in the existence of money. He’d toyed with the notion before, and had considerable fun pushing his favorite virtual currency, Dogecoin, but Tesla revealed on Monday that it was transferring $1.5 billion in cash reserves to Bitcoin. That amounts to around 10% of Tesla’s cash on hand.
People frequently equate Bitcoin with the Internet. People think that tracking the rise of digital currencies nowadays is analogous to monitoring the development of the Internet in the 1990s. In retrospect, Monday, February 8, 2021, may feel like the beginning of the twenty-first century for cryptocurrency. We’re still having problems understanding what this technology we’ve discovered is and what it will do for us. Although it’s evident that it’s here to stay.
One of the most interesting aspects of studying digital currencies is discovering the plethora of potential applications for Bitcoin’s notion of establishing distributed consensus. However, if we are to have a truly global, open borders, and individually self-governing world, other protocols will need to be built. It is particularly for the other types of applications that will power our new system. The Internet requires not just TCP/IP but also HTTP and SMTP, and the future will require not only Bitcoin but also other protocols.
Is Bitcoin unsafe from Criminals?
One of the most common misunderstandings about Bitcoin, which continues to spread in the media, is that criminals utilizes a new anonymous currency. Bitcoin is not, in any way, anonymous. In fact, if you were seeking a way to undermine Bitcoin’s utility, anonymity would be a good place to start. They record each Bitcoin transaction on a public ledger. They know this as a log file. Although the transactions are pseudonymous (from one address to another), they are not totally anonymous. And there are organizations that specialize in examining blockchains and documenting public transactions. This includes Chainalysis. And imagine who their most important client is. The government of the United States Because of the network’s transparency, intelligence personnel have jokingly dubbed Bitcoin “criminal futures.”
This is a concern, and Satoshi was fully aware of it. Because privacy is a basic human right. It is important that we include it in this emerging decentralized environment. Satoshi would have preferred to do so (he/she/they/it discussed the issue on the initial Bitcoin forums). However, there was no way to build the trust required to operate Bitcoin without the transactions being logged on the public log. Simply put, cryptography did not exist. Until Zooko Wilcox and his team launched Zcash on October 28, 2016.
Zcash Launched
Zcash is technically a rather simple cryptocurrency technology to describe at a very high level. Since it is similar to Bitcoin in many aspects. This protocol enables peer-to-peer value exchange. This is with the same dynamics as Bitcoin (only 21 million have ever been mined). The main distinction is one of privacy. Transactions do not have to be secret (they can be transparent if desired). However, users transmit them through Zcash’s “shielded pool.” The transaction is still recorded on a public blockchain but the sender, receiver, and payment amount are masked.
How?
A previously unknown mix of revolutionary cryptography and zero-knowledge proofs. A zero-knowledge proof is a method of proving to somebody that you have something without providing them with any details except for the information that you have. This is quite hard material, so if you want to learn more, you can learn about the technology from the developer himself in this fantastic podcast with Anthony Pompliano.
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