In a recent announcement, the Bitcoin Private (BTCP) Foundation stated that it would award a series of $150,000 grants to research projects that cover a number of topics, including cybersecurity and cryptography. It is looking to sponsor projects that last anywhere from three months to a year, with the grants being distributed on a rolling basis.
It is not, however, the first cryptocurrency foundation to offer such grants. The creator of Ethereum, Vitalik Buterin, announced in January that the Ethereum Foundation would subsidize research looking into increasing the scalability of Ethereum’s blockchain. In his statement, Buterin stated that the scalability of the network was “perhaps the single most important key technical challenge that needs to be solved in order for blockchain applications to reach mass adoption.” The Ethereum Foundation will offer subsidies of between $50,000 and $1 million.
BTCP is a dual-blockchain fork of Bitcoin and ZClassic (ZCL) whose fork snapshot occurred on February 28, when BTC was at a block height of 511,346 and ZCL at 272,991. Anyone who held either BTC or ZCL at these heights can claim an equal amount of BTCP, provided that the wallet holding their coins allows for private key exportation. This means that someone who owned 1 BTC and 10 ZCL would be able to claim 11 BTCP.
Upon the announcement of the fork, investors tried to capitalize on it by buying ZClassic, since it is much less expensive than BTC. However, the surge in demand caused ZCL’s price to shoot up to $188.97 on February 20 from just $1.83 less than 3 months earlier. After the snapshot took place, ZCL’s price fell just as quickly as it had climbed, and it’s now valued at only $5.18.
Bitcoin Private uses “zero-knowledge succinct non-interactive arguments of knowledge” known as zk-SNARKs or zero-knowledge proofs. They allow for “shielded transactions”, allowing transacting parties to be kept entirely anonymous, as transaction balances and addresses do not appear on the blockchain. Zk-SNARKs validate transactions in such a way as to not reveal information that could be used by others to reveal the identities of the sender or the receiver, a common complaint with other cryptocurrencies.
Writing on Twitter, Edward Snowden stated that zero-knowledge proofs could be the future of private trading, with Buterin being quoted as saying:
Real Life. Real News. Real Voices
Help us tell more of the stories that matterBecome a founding member
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.
Zk-SNARKs were first implemented by the cryptocurrency Zcash (ZEC) in 2016. ZClassic is a hard fork of Zcash, which eliminated the unpopular 20% “founder’s tax”. The creators of Bitcoin Private hope that the combination of Bitcoin’s brand recognition and widespread adoption with the privacy features of ZEC/ZCL will attract users looking to take advantage of zk-SNARKs.
The types of research that the Bitcoin Private Foundation hopes to encourage include:
- Privacy enhancement for lite clients like Electrum
- Increased anonymity within the peer-to-peer network
- Making efficiency improvements to zk-SNARKs
- Combining the usability of Bitcoin scripts and zk-SNARKs
Although it is too early to make any predictions about Bitcoin Private, it would be prudent to expect cryptocurrency users to recognize the value of zk-SNARKs, given the continued growth of the Bitcoin blockchain. If this is the case, it is likely that adoption of BTCP will be significant as users look for a means of making transactions confidentially.
Subscribe to the newsletter news
We hate SPAM and promise to keep your email address safe