IOTA announces Project "Q" - Qubic: What is behind it? / 7 Cryptocurrencies that promise more Privacy!

"Q" is the biggest secret of the IOTA Foundation. For months there was speculation about what's behind the project. Even though no one knew exactly what was behind Q, there was a lot of hype in the IOTA community. With the teaser video released yesterday, the IOTA team has now announced a few details. The official presentation is scheduled to take place on June 3, 2018.

The co-founder of IOTA, David Sønstebø, has been keeping the IOTA community in suspense for a long time with the existence of project "Q" and its seemingly great importance. A few new details have leaked out in between. For example, IOTA Foundation member Eric Hop has already stated on Reddit in mid-April that "Q" stands for "Qubic", which has long been suspected.

Although Project Qubic is a well-secured secret, you'll find some clues as to what Qubic might be. A 2012 Bitcointalk post describes Qubic as a currency characterized by zero transaction fees and private transactions.

The assumption is that Qubic is a separate currency that is based on Iota and can be spontaneously created and destroyed. The currency is probably also related to the computing power of a computer, which may be created Qubics and sold against the computing power. These are just speculations.

It is certain that Qubic is a project that the IOTA team has been working on for some time and is one of the main priorities for 2018 and 2019. In addition, according to a previous statement by David Sønstebø, Qubic will serve as the backbone of IOTA and as the basis for many more projects.

Eric Hop had in mid-April on the question of whether the Q-project can meet the considerable hype explained that "Qubic will be a game changer". When asked if a person with no computer science skills could understand their meaning, he replied "probably not".

In order to fuel the speculation, but also to announce first details, IOTA yesterday published a teaser video on this website.

The video shows that Qubic will enable Smart Contracts, Oracle and Outsourced Computing. The "Oracles" allow the import of data from outside the blockchain into the IOTA network. Both technologies, Smart Contracts and Oracle, can seemingly be combined to store data in Tangle.

However, we will probably not know what Qubic is all about until June 3, 2018 when the project is officially launched.

Probably as a result of the release of the video and the hype, the IOTA share price rose at times over 20 percent yesterday. At the editorial time, the price was $ 2.4250798.

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I introduce seven exciting cryptocurrencies that offer more privacy or anonymity than Bitcoin: Dash, Monero, Particl, Zcoin, PIVX, Zcash and Zencash.

Since Bitcoin is not really anonymous, but rather quite transparent, there are now a large number of cryptocurrencies that promote more anonymity. You can stand this way or that. On the one hand, it is good if coins are not completely anonymous because you can track down criminals by following the trail of money. This is a desirable condition per se. Nobody really wants cryptocurrencies to protect blackmailers or terrorists, so full anonymity is rather tricky.

On the other hand, the transparency of a blockchain like Bitcoin definitely goes too far. It will be absolutely transparent, not only to the secret services and the tax office, but to everyone, including extortionists and thieves. Such damage to privacy can not be the point of the matter. In addition, excessive transparency threatens to affect the fungibility of the coins. Fungibility means that one coin is the same as another, like an egg or a fungus. As soon as coins are "dirty" and may no longer be accepted by exchanges or payment service providers, the currency loses this essential property.

So you do not have to be a friend of absolute anonymity to see that the lack of privacy of most cryptocurrencies is a big problem. Therefore, one of the most promising areas of Altcoin development is to make coins with better privacy. Four approaches have emerged to improve anonymity: Mixing, RingCT, Zerocoin and Zerocash. I introduce the four methods and their key representatives.

Mixing: Dash

"Mixing" means mixing transactions in a way that makes it difficult to identify who the sender and receiver are. A popular method is CoinJoin. Here several transactions are broken up and transformed into a single transaction with many inputs and outputs. The process was popular with BitMarket for a while, but is now little in use.

The cryptocurrency Dash, formerly Darkcoin, has integrated CoinJoin into the protocol. For this purpose, it uses so-called Masternodes, which mix transactions marked as "private send". These Masternodes receive a certain reward for their work and have other responsibilities, such as the vote on the development of the currency and the securing of unconfirmed transactions. In this way, the Masternodes concept ensures that Dash stands on a relatively stable infrastructure.

The darksend transactions should be private enough for ordinary mortals. If your boss sends you Dash, he will not be able to easily tell you what to do with it, if you use darksend. However, companies that specialize in analyzing blockchains can break the process. As a result, state institutions are likely to be able to track darksend transactions, and exchanges should be able to blacklist "dirty coins."

RingCT: Monero, Particl

RingCT is a portmanteau of "ring signatures" and "confidential transactions", two methods that are mainly combined at Monero.

Like mixing, ring signatures break the link between the sender and the recipient by having the signatures not assign a coin to a specific address, but only to someone who comes from a group of possible owners. Like mixing, ring signatures make it difficult to track the progress of a transaction, but it's not entirely impossible. At least there is a paper that claims the procedure can be broken.

Help brings here the combination with confidential transactions. This method means replacing the amount in a transaction with a zero-knowledge proof. This is a cryptographic trick to prove that an info is correct without giving away this info. Now, hiding the amount of a transaction lacks the information necessary to break the ring signatures. Therefore, cryptocurrencies offer more or less complete anonymity with RingCT.

At Monero, transactions use RingCT by default. This has the advantage that all transactions are anonymous. The downside, however, is that the transactions are significantly larger than Bitcoin, which makes the system poorly scaled (though there are plans to remedy this through so-called bullet proofs). A second drawback is that RingCT, by obscuring the amount, makes it impossible to audit the number of existing coins. If there is a bug that allows, for example, the creation of any new Monero, it will go unnoticed for a long time.

Particl also works with RingCT. Particl sees itself as a Swiss army knife among the cryptocurrencies. Unlike Monero, anonymous transactions are not standard. Instead, they can be sent in three forms: Public (as with Bitcoin), Blind (with confidential transactions), and Anon (with RingCT). In addition, Particl wants to use Proof of Stake instead of Proof of Work, so blockchain does not continue by investing Miner computing power, but by holding the Particl token owners in a wallet to "prove ownership." Particl also plans to build a decentralized, anonymous marketplace via a sidechain. The cryptocurrency is ambitious but still under development at the moment. So far only the blind transactions have been implemented, but not yet the anonymous ones.

Zerocoin: Zcoin, PIVX

Another interesting way to increase privacy is the Zerocoin protocol. It was originally designed for Bitcoin, but so far only realized on altcoins. The concept is to "burn" coins, prove this with a Zero-Knowledge Proof - the zk proof - and in return receive the same amount of new coins (the Zerocoins). This is only after a certain time and in a certain denomination, as with each burning new Zerocoins go into a pool. In this way any connection between old and new coins is cut off.

The disadvantage of this method, however, is that it needs an initial setup that requires trusting the founders of the currency. When they pick up their secrets and exchange them, they will be able to fake new coins. The currencies that use the Zerocoin protocol, each go their own way to minimize this risk. Another disadvantage is that the zk proofs with about 25 kilobytes are very large. Unlike Monero, you do not have to use them on every transaction, so the concept should probably scale better.

The first currency using zk proof is Zcoin. This runs as a proof of work with a block interval of 10 minutes and gives part of the block back to the developers. Perhaps more interesting is PIVX. Built on Dash's masterternodes concept, it has been converted to a full proof of stake with a one-minute block time. While the stakers receive 90 percent of the block reward, 10 percent go into a "Treasury" and are reserved for specific developer projects.

Zerocash: Zcash, Zencash

The concept of Zerocash goes even further than Zerocoin. This extends the zk proofs on zkSNARK proofs. These zero-knowledge proofs include not only sending a coin but also the amount. Say: The darkened proof not only contains the fact that a coin was burned, but also the amount of that transaction. This eliminates the need for certain denominations, and you can simply send transactions as Zerocash, rather than having to create and work with new coins. In addition, the zkSNARKs, with a size of only one kilobyte, are smaller and easier to verify than the zk proofs.

This makes the Zerocash protocol perhaps the cryptocurrency with the strongest anonymity. One drawback to Monero is, perhaps, that privacy is only optional, which still makes it possible to treat coins that are privatized differently than other coins. Zerocash also needs a "trusted setup" like Zerocoin, which makes it possible that those who create a currency can later fake coins - which, thanks to the concealment of the amounts as Monero may not even notice. Also, the creation of the zkSNARKs is relatively complex, which is why even good computers need more than a minute and smartphones probably can not compete at all.

The first currency that has implemented the Zerocash protocol is Zcash. Incidentally, the team behind this currency invented the Zerocash protocol - but it also demands a lot for that. Zcash is being developed and deployed by a private, American company that pays a sizeable portion of the block reward. Somewhat disappointing is that the company does not even provide a graphical wallet, which should be quite daunting for beginners.

An interesting alternative is Zencash. This currency uses the zkSNARKs technology, but embeds it in a completely different currency. Namely, it allocates a part of the mining rewards to the "Secure Nodes", which are the full nodes that stores the entire history of the blockchain. This provides Zencash with an incentive to maintain a strong, decentralized architecture permanently, even with large capacity. In addition, Zencash obfuscates the IP address of the nodes and will also allow the anonymous transmission of information via the Interplanetary File Network.

And what about Verge?

The cryptocurrency Verge has recently made headlines that it is accepted by Pornhub. Verge advertises a special privacy through the standard use of Tor and the "Wraith Protocol". However, it was clear that the "Wraith Protocol" was not developed by Verge himself, but is merely a copy of Shadowcash. And Shadowcash is said to be vulnerable in several ways, so it's not used by altcoin developers for a long time, and the original Shadowcash currency is struggling with a very small market capitalization. Of all the privacy-focused cryptocurrencies, Verge is the loudest advertiser, but seems the least capable of making a difference.

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Video Source:

• youtube.com/Investment Academy Bitcoin, Aktien und ETFs

Image Sources:

• Article headers created by myself
• https://www.reddit.com/r/Iota
• https://www.reddit.com/r/Iota

Have a nice day!

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