What is the difference between 'Bitcoin' and 'Bitcoin Private'?

Bitcoin came out of a paper published in October 2008 by Satoshi Nakamoto titled "Bitcoin: A Peer-to-Peer Electronic Cash System". The implementation was released in 2009 and it remains as THE most popular cryptocurrency. This is not only due to its first mover advantage but also the considerable number of base-pairs available for trading.

Satoshi Nakamoto’s vision was to create a peer-to-peer electronic cash system that would not have any third party institutional control, it would have limited inflation and provide monetary freedom through anonymity.

Privacy

Now, the right to privacy is an element of various legal traditions to restrain government and private actions that threaten the privacy of individuals. In fact, over 150 national constitutions mention the right to privacy. As you know, since Edward Snowden disclosed top secret documents that the right to privacy has been subject of international debate. In combating worldwide terrorism, government agencies have engaged in mass, global surveillance, perhaps undermining the right to privacy.

There is now a question as to whether the right to privacy can co-exist with the current capabilities of intelligence agencies to access and analyse virtually every detail of an individual's life. A major question is whether or not the right to privacy needs to be given as sacrifice in order to defend against supposed terrorist threats. That is however, outside of the scope of this video.

Bitcoin

Back to bitcoin, and as you've probably guessed by now the issue is that bitcoin is not private by design. You can preserve your privacy until someone makes the link between your Bitcoin address and your identity, and at that moment your whole transaction history becomes public. In fact, BitFury can deanonymize 15% of the Bitcoin transactions as of today. Therefore, the right to privacy is gone with Bitcoin.

Bitcoin Private

This is where Bitcoin Private comes in. They are using a technology called zk-SNARK for "zero-knowledge Succinct Non-interactive ARgument of Knowledge" that was published in a research paper by MIT researchers. The original paper was title "Zerocash: Decentralized Anonymous Payments from Bitcoin".

This technology is the backbone of the Zcash protocol and by doing so, Zcash allows for shielded transactions. Thus, funds are completely anonymous with no transaction or address balance appearing on the ledger.

The only issue with Zcash was that it has a 20% founder's tax that allowed the developers and early investors to collect a commission for the coins mined by the community. Unhappy with this tax, Rhett Creighton decided to fork Zcash, eliminating the founder’s tax and creating Zclassic. However, by removing that tax, Zclassic did not have the resources to pay developers to keep development active and that resulted in stagnation.

So now we get to the actual Bitcoin Private. As you've probably guessed by now, Bitcoin Private is a “fork-merge” of Bitcoin and Zclassic that is intended to add privacy and spendability to the Bitcoin blockchain.

Let's have a look at a table for comparison:

Comparison of Bitcoin Private, Bitcoin, Bitcoin Cash, and Bitcoin Gold

Funding for further development

One important point to discuss is how is Bitcoin Private going to fund its further development?

In their whitepaper they say that "Support and development of the Bitcoin Private project will rely on continued treasury fund collection in a manner other than mining pool donations.". Therefore, one of the first soft forks that they want to do is to change the treasury fund collection parameters. That way they will give miners the choice to decide how much they want to donate as as a collective to ensure the future success of the program.

They have however a backup measure. A “difficulty bomb” that has been implemented into Bitcoin Private to allow for significant future development, in a similar manner as with Ethereum. However they say in the whitepaper that this method will only be used as a last resort. Nonetheless, the bomb could be implemented to introduce a new governance system, such as the system featured by Decred. Thus, they have a decent plan to keep development active for Bitcoin Private.

In conclusion, Bitcoin Private's goal is to fulfills Satoshi’s original vision. That is to have fast, low-fee, decentralized, and private transactions.

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