Zcoin bumps up privacy
Cryptocurrencies,  Technology

Zcoin bumps up privacy with ability to burn and redeem coins

The privacy coin is adding a new anonymity feature to counter the growing ability of law enforcement to track privacy coins’ transactions

Privacy coin Zcoin has announced a new privacy protocol it said offers the same practical anonymity as cash.

The Lelantus protocol went live on a testnet on Oct. 20, offering users of the privacy coins the ability to “destroy coins of arbitrary amounts and to redeem brand new coins (even partially) that appear to have no previous transaction history associated with them,” the organization said.

Transactions can be anonymized with a single click, Zcoin claimed, avoiding the need for any trusted setup whatsoever. It also allows users to mint new coins to a shared anonymity pool and then withdraw only part of their Zcoin balance. This lets them transfer arbitrary amounts, rather than an identical deposit and withdrawal.

Lelantus can be accessed without compromising easy integration of exchanges, wallets and cross-chain bridges. Zcoin added:

“This approach carefully balances the need for regular transparent transactions, which can be turned on, with the belief that privacy is a fundamental human right that should be built-in.”

Zcoin will be rebranded in the next few weeks to highlight this burn-and-redeem privacy mechanism.  

“Lelantus pushes the boundaries of privacy with powerful technology that offers very high practical anonymity while requiring no trusted setup, and an elegant cryptographic construction,” said Reuben Yap, project steward of Zcoin. “Private crypto transactions live today either suffered from low privacy via small anonymity sets or required a degree of trust, something that is against the philosophy of public blockchains. Zcoin addresses both these issues.”

The news comes a day after the U.S. Financial Crimes Enforcement Network (FinCEN) announced a $60 million fine for Larry Dean Harmon, the operator of the Helix and Coin cryptocurrency mixers for violating of the Bank Secrecy Act. He is currently being prosecuted under criminal money laundering laws.

Fighting growing traceability 

The goal of Lelantus is to block the growing ability of law enforcement and bitcoin intelligence firms like Chainalysis and CipherTrace to use advanced blockchain analysis techniques to track privacy coins, Zcoin said in its release. It does this “without compromising on trustlessness,” Zcoin said. 

In June, Chainalysis announced that it could trace transactions of the Zcash and Dash privacy coins. And earlier this month, the Chainalysis and data analytics company Integra FEC split a $1 million IRS contract to figure out how to trace Monero.

The Lelantus protocol uses the well-established Diffie-Hellman cryptographic assumption for its privacy.

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.