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Privacy Coins

South Korea Forbids Exchanges To Facilitate Trade Of Privacy Coins

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South Korea has been engulfing the entire globe through its cultural soft power. BTS and Korean drama has never been so popular. Along with this cultural takeover of the globe, the country is spearheading the adoption of crypto. South Korea recently legalized crypto in the country by passing a bill to regulate digital assets. However, the latest news from the Asian country suggested a ban on privacy coins.

South Korea To Dodge Abject Money Laundering Risk

Just a year ago, privacy coins had become a big no go for certain regulators. The Financial Action Task Force’s [FATF] Travel Rule was a huge setback for privacy coins like Monero [XMR], Zcash [ZEC] as well as Dash [DASH]. South Korea seems to be on board with this rule as the country decided to put a ban on privacy coins.

As per a recent announcement, the South Korean Financial Services Commission [FSC] revealed on its website that it was going to restrain digital asset providers from engaging with cryptocurrencies that pose a great risk of money laundering. This rule comes as part of the country’s Special Payment Act. Certain rules were put into place by South Korea earlier this year, however, these rules will only be effective since March 2021.

This isn’t the first time privacy coins have been banned in a country over money laundering issues. Japan also laid a ban on these assets. The South Korean regulator also went on to label privacy coins as “dark coin”. Since the information pertaining to the transaction of privacy coins is kept “private” the government would find it difficult to track down or trace the transaction of crypto assets.

While several exchanges have taken a step ahead and delisted privacy coins, the FSC suggested that anti-money laundering as well as ‘Know Your Customer’ policies should be mandated in every crypto platform operating in the country.

Bitcoin Development Fund Unveiled by Human Rights Foundation Worldwide

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The Human Rights Foundation (HRF) has announced an open-source Bitcoin Development Fund for Cryptocurrency Privacy Developers. Chris Belcher’s Coinswap Privacy Protocol will be the first project to benefit from the funds.

The HRF announced new developments through the HRF blog post. As stated in the announcement, human rights activists are at the forefront of supporting Bitcoin developers who contribute to the privacy, decentralization and sustainability of the network as a financial means for human rights activists, journalists and civil society organizations worldwide.

Coinswap to benefit from HRF’s Bitcoin development fund

According to the announcement, the first grant would go to Chris Belcher ‘s impressive Coinswap proposal. The UK-based startup has had a significant impact on the Bitcoin community as a key enhancement to the privacy of the Bitcoin Network.

In addition, HRF Chief Strategy Officer Alex Gladstein pointed out that, as a pioneering grant to the Bitcoin Development Fund, the Kitty would focus more on network privacy than on other related objectives. He added that the long-term vision of the Fund is to provide significant support for the “privacy, resilience and decentralization” of the network.

The Bitcoin Development Fund was supported by an unknown donor who wanted to see financial support for open-source development , in particular the general security and privacy of the human rights activists and non-conformists network to be used in the political world.

Any Bitcoin developer is open to submit a proposal to HRF for the fund. The Foundation has organized a team to review bids submitted by developers around the world.

A growing trend in organizations backing open-source Bitcoin development

The latest move by the Human Rights Foundation is among the many organizations’ efforts to provide financial support for the open-source development of the Protocol. Such financial backups are the lifelines of Bitcoin open-source developers who often do this at no cost from passion.

The open-source Bitcoin protocol was first established more than ten years ago by an anonymous Satoshi Nakamoto, and it is maintained by open-source developers. In addition, HRF is trying to raise more funding to support such initiatives through crowdfunding campaigns. Ninety-five percent of the funds raised will be used to support selected projects.

Research: 99.9% of Zcash Transactions are Traceable

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A recent analysis of the traceability of the leading privacy coins on the market suggests that 99.9% of Zcash transactions can be tracked since most users do not make use of the privacy features provided.

Researchers at Carnegie Mellon University focused on the privacy features of the top two privacy coins, Monero (XMR) and Zcash (ZEC). According to the study report, the launch of the strict, security and anonymity conditions of its extensive community has maintained the reputation of the crypto as undetectable.

99.9% of Zcash transactions can be trailed

On the other hand, the study states that despite Zcash offering robust cryptographic features, over 99 percent of users do not have the privacy features at their disposal. The report defines ZEC as a Bitcoin fork that aims to  “completely break the link between the sender and the receiver.”

In addition, the study concludes that Zcash is not currently extensively used. The researchers mention the May 2020 darknet study, which claims that ZEC is not the most favourable of the privacy coins used in the dark web. ZEC uses SNARKs or zero-knowledge succinct non-interactive knowledge arguments to avoid any interplay between the prover and the approver. This is a barricade that hinders attempts to interconnect addresses.

However, ZEC provides both privately protected and anonymously open transactions. Researchers found that only 0.09 per cent of Zcash users over 30 days; take full advantage of the privacy features at their disposal.

30% of Monero transactions can be trailed

In addition, the study points out that more cryptocurrencies are looking to label themselves as anonymous. These altcoins sell the concept that they offer absolute anonymity to transactions.

The study focuses on multiple XMR characteristics that are geared to non-traceability and non-linkability. In order to ensure no interlinking, a one-time address for each transaction is adopted. In addition, Monero avoids trailing by using unique ring signatures, a form of zero-knowledge proof, close at hand with decoy inputs dubbed mixins. However, the study found that 30% of XMR transactions can be monitored precisely.

‘Mimblewimble should not be considered as a viable replacement to ZCash or XMR,’ claims new research

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The Mimblewimble technology and the Grin token based on it had created news earlier in the cryptocurrency industry after claims of new security measures and an increased use cases for the tokens. Recently, however, a cryptocurrency industry official has revealed that he was able to break Mimblewimble’s privacy technology using cheap methods.

Ivan Bogatyy, the General Partner at MetaStable Capital, claimed that the new technology’s privacy was fundamentally flawed and that he was able to uncover sender and receiver addresses for 96 percent of Grin transactions.

What makes this news more astounding was the fact that the details could be snatched away from users in real time. According to Bogatyy, Mimblewimble faced systemic issues that could not be fixed with a debugging and urged users to not consider it as a viable replacement to privacy-oriented cryptos such as Monero and ZCash.

According to the author of the paper that pointed out the shortcomings of the technology:

“Several researchers have hypothesized a possible privacy weakness in Mimblewimble. My contribution is to demonstrate the precise way to perform an attack, prove its viability on a live network, and measure its efficacy. In live testing on Grin, I was able to unmask the flow of transactions with a 96% success rate. Therefore, it’s now clear that Mimblewimble should not be relied upon for robust privacy.”

Bogatty has pointed to Mimblewimble’s linkability feature as its downfall, adding that cryptocurrencies like ZCash did not face this problem because it is an unlinkable cryptocurrency blockchain. Because of the linkability feature, anyone can track a sender/ receiver’s location after deobfuscating the transaction graphs.

The author also made a comparison analysis with Mimblewimble against ZCash and Monero. When it comes to the internal architecture of a ZCash transaction, it was found that each private set included all shielded coins. These shielded coins are the ones that are assumed to provide anonymity as well as privacy.

Monero transactions derive their privacy from the set of all “decoy transactions”. The paper admitted that Monero did have its specific set of ingrained issues but still performed better than Mimblewimble on a per-privacy factor basis. The main problem in Mimblewimble pointed out by the author was that it has one unshielded coin that can be tapped into for transactional information.

The research was candid in mentioning that despite its flaws, the Grin token [based on Mimblewimble] was still more privacy-oriented than Bitcoin.

Disclaimer: The presented information is subjected to market conditions and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

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Litecoin Foundation donates 1.5 Bitcoin to Grin++ security audit

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Charlie Lee has been talking a lot about privacy and making Litecoin a highly confidential digital asset. The users were waiting for something to listen from the LTC founder regarding the promised privacy features. And now, it seems, the community has got what they wanted.

The founder of Litecoin (LTC) mentioned that they have donated about 1.5 Bitcoin (BTC) to the Grin++ security audit. Grin developer, David started the funding campaign for Grin++ couple of months ago. The initial goal of raising $30K has been achieved, but there is still a long way to go. To encourage to donate for Grin++, David said:

Although we’re a long way from meeting the goal, I still think a security audit is something worth having. If you agree with me and want to support this effort, I encourage you to donate at one of the addresses at the bottom.

Grin++ is a lightweight contrivance of the MimbleWimble protocol. It is a blockchain project that focuses on providing scalability and privacy. Recently, it had a successful hard fork spell and the key feature added to this program is the tweak of one of two mining algorithms.

Supporting a mining algorithm which is compatible for both GPUs and ASICs, however, the recent fork might prevent the specialized machinery from materializing to build the GPU-friendly algorithm.

Charlie Lee briefed on his Foundation’s collaboration with the Grin++ security audit saying that alongside David and ecurrencyholder, they have ironed out the mechanism of getting Litecoin in and out of MW/EB. They also seem to have figured out how to handle MW fees cleanly.

The Mimblewimble protocol provided by Grin++ will improve the privacy of Litecoin by making transactions confidential. Alongside this, it will also use the LTC’s extension blocks, giving it an option to be integrated without the need of going through a full hard fork.

There are a couple of other cryptocurrencies in the market using this Mimblewimble feature, and they have given a bit of visibility to the Grin++ project. With the adoption of this feature by Litecoin, it will be a leap forward for Mimblewimble, too. Moreover, Litecoin’s financial aid will be a key for its growth as they donated around $16,000 to Grin++ if we count in the fiat.

Lately, Litecoin has lagged in the development sector, and now it is looking to move back to development from promotion. Lee stated that the time has come to shift focus from adoption back to the development. With development, adoption automatically increases. If there is something that users need, it is privacy, and with an improved privacy protocol, it will pop-up the adoption of Litecoin. That’s what Charlie Lee believes.

So, it is good news for the Litecoin community because it’s been a while since they last heard a severe development program for the digital asset. At the moment, Litecoin (LTC) occupies the fifth spot in the crypto rankings, and such vital developments will help boost its value in the market further.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

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What can Litecoin learn from Monero, Zcash and other privacy coins?

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Litecoin’s co-founder, Charlie Lee, explains the company’s hidden work on Litecoin core development and states that privacy feature “MimbleWimble” shall be ready within 2019. While Litecoin will soon have its privacy-feature, what should it learn from existing privacy-centric coins? Let’s dig deeper.

LTC to Hit Privacy Feature in 2019

Few argue that Litecoin’s eight years journey comes by copying the Bitcoin’s code, Charlie Lee went on to Twitter and explains how and what development aspects the project is focusing on.

It comes in the wake of firing criticism on Lee’s action of cashing out his LTC stash and community’s talk of no code commits appear in 2019. On August 10, 2019, Lee released a series of tweets, explaining that a handful of core developers are working on the Litecoin Core. Lee says that;

It’s no secret that we have purposefully kept Litecoin’s code very close to Bitcoin’s code. Since we are mostly just merging in Bitcoin changes, we only need a lead Litecoin Core developer doing the merges and the rest of us help with code reviews, testing, and gitian builds.

Lee defends Litecoin development FUD, stating that the similar arguments occurred in 2018 and bets that people might have a similar thought in 2020 also. While addressing the concern of the community, urging privacy-enabling protocols in Litecoin, Lee hints MimbleWimble and Confidential Transactions feature.

He quickly marks that MimbleWimble will be live sometime in 2019. While this was announced earlier in Feb, there were no further updates occurred, neither from founder nor from the company. For which, he says that “he dropped the ball” and shifted focus on adoption. However, he later requested an apology for lack of communication. Moreover, he claims that “fungibility is extremely important and says he will get the ball rolling on MW/CT again.”

That said, I believe it’s time now for me to shift focus from adoption back to development. I still think fungibility is extremely important and I will get the ball rolling on MW/CT again. This time, I won’t make any promises on dates.

While he denies declaring any date for the development of MW, users can expect sometime this year.

The Lesson for Litecoin from Existing Privacy-Centric Coins

Litecoin by having Mimblewimble will debut privacy feature just like other privacy-centric coins such as Zcash, Monero, Dash, and many others.

Monero is by far known for its privacy-centric feature but doesn’t bother working within the regulatory regime. Since its launch in 2014, Monero has now hit the market cap of 1.3 billion. It says that crypto exchanges will shift in crypto-friendly countries and Monero remains available for trading across a handful of crypto exchanges in these countries.

ZCash – similar to Monero, ZCash is a cryptocurrency mostly comes in the picture for its cutting-edge privacy feature. It claims that most regulators, including the UK, US, and Singapore, welcome ZCash and eventually its trading are also available across top exchanges such as Coinbase and Gemini. While ZCash works similar to Cash, it claims that existing AML and terrorist financing rules can be applied to it.

Dash – This cryptocurrency perhaps is one of the leading assets in terms of adoption. It was created as a fork of Litecoin in 2014, and just like Litecoin (LTC), the transactions and addresses of Dash are also transparent. The project built DarkSend on top of Dash’s architecture as a privacy feature.

Besides, it has recently signed a partnership deal with BlockchainIntel with a mission to develop a tool that analysis crypto transactions and addresses. This tool will eventually help exchanges (that list Dash) to detect high-risk transactions and address.

Research believes that the soon after collaboration announcement, Coinbase exchange announced its decision to explore Dash cryptocurrency.

Sources:

Coinut

Editor’s note: The article was updated on August 22, 2019, to mention Coinut being used as a primary source while writing it.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Never miss our daily cryptocurrency news, price analysis, tips, and stories. Join us on Telegram | Twitter or subscribe to our weekly Newsletter.

Dubai-based crypto exchange BitOasis delists privacy tokens

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The cryptocurrency market remains unregulated by the most part in most of the planet, so we haven’t seen politics exert any influence over it very often. That could be changing.

BitOasis

BitOasis is a cryptocurrency exchange and trade platform based in Dubai. It also offers mobile wallet services. The company aims to be global, but, for now, it works mainly for clients in the Middle East and Northern Africa. It was founded in 2015. It only received a preliminary license from the UAE’s Financial Services Regulatory Authority some twelve days ago.

And now, the platform is letting its customers know that starting next May 31st the cryptocurrencies known as ZEC (Zcash) and XMR (Monero) will be delisted. These two digital assets belong to the few blockchain projects in which privacy in every transaction is a paramount value. While transfers over these blockchains are entirely reliable and secure, they can’t be traced from the source to the target in any way, even by examining the blockchain directly.

The world’s governments are quite hostile to blockchains that privilege the users’ privacy. A few weeks ago, there was a proposal in France to ban those same two cryptocurrencies (among others) precisely because they create a blind spot for the government. The rationale behind the proposed ban is that such a high degree of privacy facilitates funding criminal and terrorist activities. Which could be true, of course, but nobody mentions that it also makes government control impossible, which is probably the most critical issue for governments.

Is BitOasis delisting those two coins to facilitate getting a full license from the government? It’s impossible to know. Everything goes in Dubai, after all, but there’s no way to find out for the time being.

The platform provides no explanations to customers at all. On the contrary, it asks of them to answer a set of very intrusive questions such as the origin of their ZEC or XMR assets, the purpose for which they own them, the purpose of withdrawing them from the platform (if there were withdrawals) and if they’ve bought any for third parties. So the platform is not only against private coins but also against respecting its users’ privacy by asking them to answer questions which are none of its business.

We don’t know the reason behind BitOasis’ move, because the platform has said nothing on the subject except that both tokens will be delisted. But given the features shared by both coins, it’s rather clear that the platform is getting rid of them because some of the world’s governments are not very happy about them.

Additionally, if you own some of either currency and you have it stored in this platform, you won’t be able to withdraw them as such. You’ll have to trade them for BTC or AED (the local country’s fiat).

BitOasis’ decision is sad because it’s a hit against privacy and freedom in the crypto verse. And what will happen when other projects like Tron or Bitcoin come up with enhanced privacy features, as they’re scheduled to do? Is there any point in having an exchange platform in which Bitcoin is also banned?

Unfortunately, it’s very likely that we will keep seeing exchange platforms running away from assets considered too disruptive by governments. Even if regulations don’t call for that.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Tron becomes a privacy coin by introducing ZK-Snarks

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Tron has made lots of progress in all regards since it became independent from Ethereum by launching its own Main Net. The project and the community keep delivering and innovating, and they’re not about to stop. There’s a new development because Tron wants to make Tronix (TRX) a privacy coin.

That would break new ground for Tron, of course, but for the cryptosphere as a whole too because that would turn Tron into the only smart contract and decentralized platform with privacy features because neither Ethereum nor EOS are there.

And how will they achieve that, I hear you ask? Using cryptographic technology, as is usually the case in blockchain technology. More specifically, a technique called ZK-SNARKS. Let’s find out what that means.

ZK-SNARKS, what is it?

Let’s be quick and to the point. ZK-SNARKS is a bit of cryptographic trickery that’s already in use by Zcash, and it enables to wallets to transact between them without disclosing the transaction’s information.

In other words: you can perform a transaction that cannot be traced back to you or the other party while keeping the blockchain’s protocol-specific consensus mechanism. This is one of the ways in which a technology called “Zero Knowledge Proof” can be implemented.

This is one of the most impressive applications in cryptography as it allows somebody to share a specific bit of information without actually showing it or disclosing it. Even professional specialists consider this mathematical technique closer to magic than to math. But it’s there, and it works.

It’s all up to you

The new feature won’t be mandatory, so not every TRX transaction in the network will be private. Every individual user will be free to choose if they want to transact privately or not. Both the “open” and “private” modes will be available at all times, and every TRX holder will be able to switch between modes for any reason whatsoever.

There are circumstances in which the open mode can have advantages as keeping a traceable record would help very much with total transparency (like if you’re running for public office, or are already there). Starbucks, on the other hand, doesn’t need at all to know the way in which you and I have been using our beloved TRX tokens.

Why privacy matters

Everything we do online or offline is tracked in some way. Our banks keep a detailed record of every movement in our credit or debit cards, for instance. That’s been the traditional way of doing things for ages but think about the way in which Facebook, Google or some other third parties also keep track of everything you do and all the information you access over the web.

Justin Sun, Tron’s CEO and founder, referenced this as he was interviewed at the Bad Crypto Podcast “[People] don’t want their privacy stored by Facebook or Google because those people can more easily manipulate the data so they can push ads to you.

You don’t want to share those data with them. That’s why I think the decentralized way becomes a good way to do that [and limit how much data you are required to share].”

The Tron Foundation used its official Tweeter account to announce it’s tackling the privacy problem a couple of months ago:

Tron: The future in crypto disruption

A decentralized smart contract and decentralized application platform that supports private transactions could do away with the monopoly that tech and data companies have over us.

That would go a long way in achieving Tron’s stated objective which is to decentralize the world wide web and get rid of central authorities. It remains a very ambitious goal that still looks very far away from completion. But Tron is just getting started, and this is the kind of news and technological developments that can turn that kind of dream into the new reality.

Image courtesy of PixaBay.