Edward Snowden, a former CIA employee, privacy advocate and widely recognized whistleblower, stated that zero-knowledge proofs, a cryptographic system employed by popular anonymous cryptocurrency Zcash, is the future of private trade.
“I’m with [Ethereum co-founder] Vitalik Buterin,” said Snowden, quoting his previous statement which read, “Zcash’s privacy tech makes it the most interesting Bitcoin alternative. Bitcoin is great, but ‘if it’s not private, it’s not safe.’”
Snowden emphasized that the ZK-SNARKs application of Zcash, a unique implementation of a zero-knowledge proof cryptographic system, enables cryptocurrency users to maximize privacy and anonymity in processing trades and payments.
Earlier this week, security expert John McAfee shared a similar sentiment and noted that privacy-focused cryptocurrencies including Monero, Zcash, and Dash will become significantly more valuable in the future, especially if government agencies and financial authorities begin to crackdown on taxes.
In South Korea, investors have started to express their concerns over their government’s decision to impose capital gains tax on cryptocurrency trades.
Since bitcoin transactions can be traced on the public bitcoin blockchain through blockchain explorers, and exchanges have strict Know Your Customer (KYC) and Anti-Money Laundering (AML) systems, as seen in the case of Coinbase and the US Internal Revenue Service (IRS), authorities are capable of linking transactions and addresses to identities with the help of exchanges.
Zcash and Ethereum’s integration of Zcash’s ZK-SNARKs provide a high level of anonymity and privacy to users by hiding the value of the transaction, its recipient, and sender.
Buterin, who has led the Ethereum Foundation and encouraged the integration of ZK-SNARKs , stated:
“Personally, I think zk-SNARKs are a hugely important, absolutely game-changing technology. They are the single most under-hyped thing in cryptography right now.”
Since its launch in October 2016, Zcash has been outperformed in terms of price developments by two other anonymous cryptocurrencies Monero and Dash. The cryptocurrency market’s skepticism towards Zcash has been attributed to the “trusted set-up” of Zcash, which was criticized by some experts and analysts as a centralized method of launching a cryptocurrency.
However, in spite of the trusted set-up controversy, which the Zcash team and its founder Zooko Wilcox have clarified on many occasions, the price and market valuation of Zcash have increased exponentially over the past few months.
Three months ago, the price of Zcash was at $195. Today, at the time of publishing, the price of Zcash remains above $719.
Snowden also emphasized that the trusted set-up of Zcash is a non-issue because the probability of each participant that include public figures such as Bitcoin Core developer Peter Todd being compromised is extremely low.
“Due to the design of the ceremony, the chance of every single participant (many known, respected, publicly identified figures) in the ceremony being compromised (which is the only way to cause harm) is close to zero. An undetected flaw in the novel cryptography is more realistic,” said Snowden.
“The only way I can see the initial ceremony having been compromised is by a bad build distributed to all participants. But this is hard to pull off in the first place, and participants kept copies of the build on write-once media, providing for an audit trail.”