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Zerocoin

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The presentation thoroughly explains the ecash concept Zerocoin, its working and other aspects.

Also the notion about Bitcoin has been explained.

This presentation was created and used for my UG seminar purposes.

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Zerocoin

  1. 1. Presentation On: ZEROCOIN Anonymous Distributed E-Cash from Bitcoin.
  2. 2. Department of Information Technology By NAVGIRE SAGAR P. 3651 Seminar Guide: Prof. NAMAN BURADKAR 2 Roll No: 3651 ZEROCOIN
  3. 3. 1. Basic Concepts. 2. Bitcoin : Definition, Working, Advantages, Disadvantages and Applications. 3. Laundry Services. 4. Zerocoin : Definition, Working, Protocol Overview, Comparison and Future Scope. 3 Roll No: 3651 ZEROCOIN
  4. 4. • Any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country. • A medium of exchange; A unit of account. • A standard of deferred payment. • Desired Properties: 1. Limited Supply. 2. Widely Accepted. 3. Easier to transfer from one account to another account. Roll No: 3651 ZEROCOIN 4
  5. 5. • NOTE: It is a piece of paper with certain amount written on it and a probably a serial number written on it. • COIN: It is a piece of metal, mostly circular in shape with certain amount depicted on it. 5 Roll No: 3651 ZEROCOIN
  6. 6. • It is a file having some code or sequence of number. • This file is transferable from one network to another network. • Examples: Paypal, Google Wallet, etc. 6 Roll No: 3651 ZEROCOIN
  7. 7. • A third party maintains a database of various accounts and for transactions, simply deduct money from one account and add to another account. • They get paid for providing services. • Example : Bank System. 7 Roll No: 3651 ZEROCOIN
  8. 8. • Trusted parties required to operate. • Centralization and Trust. • Money can be stolen. (Robbery) • Bank can go out of business. (Bankrupt) • Privacy issue. (Your data can be sold) • Your account can be seized. Roll No: 3651 8 ZEROCOIN
  9. 9. 9 Roll No: 3651 ZEROCOIN
  10. 10. • Proposed by Satoshi Nakamoto in 2008. • Provides an effective and verifiable currency transfers & creation in a decentralized peer to peer setting. • Combination of b-money and bit gold. • Practically implemented as a software called bitcoind. • A real system with a $100 billion market capitalization. • Daily transactions worth $2 - $5 billion USD. Roll No: 3651 ZEROCOIN 10
  11. 11. • No third party interference. • Worldwide coverage. • Null or low transaction fees. • No upper limits on transfer amounts. 11 Roll No: 3651 ZEROCOIN
  12. 12. • Online Shopping. • Web design and development. • Servers. • Cafes, Restaurants, Bars and Lodgings Hotels. • Medical, Legal and Educational Services. • Wellness & Fitness. 12 Roll No: 3651 ZEROCOIN
  13. 13. http://usebitcoins.info/ 13 Roll No: 3651 ZEROCOIN
  14. 14. preev.com 14 Roll No: 3651 ZEROCOIN
  15. 15. • Normal Approach. To: ALICE Bob 15 BOB Roll No: 3651 ALICE ZEROCOIN
  16. 16. • Replacements : 1. Account Holders Name => Users Public Key. 2. Handwritten Signature => Digital Signature. 16 Roll No: 3651 ZEROCOIN
  17. 17. • Bitcoin Approach. BOB ALICE 17 Roll No: 3651 ZEROCOIN
  18. 18. • If copy of same cheque is given to many people. • Copy of Same Bitcoin is transferred to more than one peer. • Result: 1. Infinite amount of bitcoins. 2. Currency losing its value. 18 Roll No: 3651 ZEROCOIN
  19. 19. • Distributed consensus approach. • Instead of having a central DB, it divides the DB into small parties in the peer to peer network and replicate the same information in all nodes. • The database will contain information about all the transactions. • Users can check if the coin has already been spent. 19 Roll No: 3651 ZEROCOIN
  20. 20. • The DB is divided into small parts called Blocks of many transactions. • These blocks are connected through HASH CHAINING. 20 Roll No: 3651 ZEROCOIN
  21. 21. • It is the append-only chain of blocks. • The ability to add blocks to the chain is distributed among the nodes. • These nodes are called as MINERS. • They compete with each other by doing some computational work called as PROOF OF WORK (PoW). 21 Roll No: 3651 ZEROCOIN
  22. 22. • Miners get some reward for winning the PoW on a given block. • They can also receive some transaction fee. 22 Roll No: 3651 ZEROCOIN
  23. 23. • Block chain, which is the history of all the Bitcoin transactions, is publicly available. • The Block chain is traceable. • Information can be leaked. 23 Roll No: 3651 ZEROCOIN
  24. 24. 24 Roll No: 3651 ZEROCOIN
  25. 25. • Bitcoins of many peers are mixed randomly together and returned back. • Trail goes DEAD and the peers cant be identified. 25 Roll No: 3651 ZEROCOIN
  26. 26. • Trusted parties are required for Laundry operations. • No assurance that your money will be returned. • They are to be trusted blindly. 26 Roll No: 3651 ZEROCOIN
  27. 27. 27 Roll No: 3651 ZEROCOIN
  28. 28. • Proposed by Matthew Green of John Hopkins University. • Protocol that extends BTC by adding decentralized laundry. • Requires a trusted, append only block chain, which bitcoin provides for free. • Zerocoin is just the information. • Information in the form of randomly generated large numbers. Roll No: 3651 ZEROCOIN 28
  29. 29. • A Zerocoin is a randomly generated large number. • It gains its value once it is put on the block chain. • Eg: 1zerocoin = 1BTC. • It also contains a digital commitment acts as a security lock. 29 Roll No: 3651 ZEROCOIN
  30. 30. • Zerocoins can be redeemed back into Bitcoins. • 2 things the receiver needs to know : 1. Knowledge about the zerocoin existence. 2. Knowledge about the commitment that causes it to open. • Concept of Zero Knowledge Proof is used. 30 Roll No: 3651 ZEROCOIN
  31. 31. • Invented by Benaloh and De Mare. • Based on RSA Algorithm. • Encryption key is made public, whereas Decryption key is kept secret. • To accumulate primes C1, C2, ….,Cn compute: A = U^(c1.c2…..cn) wi = U^(c1.c2.ci-1...ci+1…cn) Roll No: 3651 ZEROCOIN 31
  32. 32. • Generate a random serial number S. Compute: C = g^S.h^r ( C is prime ) • Retain S, commitment randomness r. • Accumulate all valid coins, compute witness wi. • Reveal S, prove knowledge of accumulator witness wi and commitment r. 32 Roll No: 3651 ZEROCOIN
  33. 33. 33 Roll No: 3651 ZEROCOIN
  34. 34. 34 Roll No: 3651 ZEROCOIN
  35. 35. • Zerocoin can be merged into Bitcoin at protocol level. • Bitcoin.org not interested. • New Beta – Bitcoin to be launched ! 35 Roll No: 3651 ZEROCOIN
  36. 36. [01] Zerocoin: Anonymous Distributed E-Cash from Bitcoin. Ian Miers, Christina Garman, Matthew Green, Aviel D. Rubin. The Johns Hopkins University Department of Computer Science, Baltimore, USA [02] S. Nakamoto, “Bitcoin: A peer-to-peer electronic cash system, 2009, ” 2012. [Online]. Available: http://www.bitcoin.org/ bitcoin.pdf [03] S. Barber, X. Boyen, E. Shi, and E. Uzun, “Bitter to better – how to make bitcoin a better currency,” in Financial Cryptography 2012, vol. 7397 of LNCS, 2012, pp. 399–414. 36 Roll No: 3651 ZEROCOIN
  37. 37. 37 Roll No: 3651 ZEROCOIN

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