Zerocoin

Presentation On:

ZEROCOIN
Anonymous Distributed E-Cash from Bitcoin.

Department of Information Technology

By
NAVGIRE SAGAR P.
3651

Seminar Guide: Prof. NAMAN BURADKAR
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ZEROCOIN

1. Basic Concepts.
2. Bitcoin : Definition, Working, Advantages,
Disadvantages and Applications.

3. Laundry Services.
4. Zerocoin : Definition, Working, Protocol Overview,
Comparison and Future Scope.

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ZEROCOIN

• 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.
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ZEROCOIN

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• 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.

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ZEROCOIN

• 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.

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• 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.

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ZEROCOIN

• 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.
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ZEROCOIN

• 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.
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ZEROCOIN

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• No third party interference.
• Worldwide coverage.
• Null or low transaction fees.
• No upper limits on transfer amounts.

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ZEROCOIN

• Online Shopping.

• Web design and development.
• Servers.

• Cafes, Restaurants, Bars and Lodgings Hotels.
• Medical, Legal and Educational Services.

• Wellness & Fitness.
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ZEROCOIN

http://usebitcoins.info/

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ZEROCOIN

preev.com

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ZEROCOIN

• Normal Approach.

To: ALICE

Bob

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BOB
Roll No: 3651

ALICE
ZEROCOIN

• Replacements :
1. Account Holders Name => Users Public Key.
2. Handwritten Signature => Digital Signature.

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• Bitcoin Approach.

BOB

ALICE
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• 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.

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ZEROCOIN

• 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.
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ZEROCOIN

• The DB is divided into small parts called Blocks of many
transactions.
• These blocks are connected through HASH CHAINING.

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ZEROCOIN

• 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).

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• Miners get some reward for winning the PoW on a given block.
• They can also receive some transaction fee.

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• Block chain, which is the history of all the Bitcoin
transactions, is publicly available.
• The Block chain is traceable.
• Information can be leaked.

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ZEROCOIN

• Bitcoins of many peers are mixed randomly together and
returned back.
• Trail goes DEAD and the peers cant be identified.

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ZEROCOIN

• Trusted parties are required for Laundry operations.

• No assurance that your money will be returned.

• They are to be trusted blindly.

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ZEROCOIN

• 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.
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ZEROCOIN

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• 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.

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ZEROCOIN

• 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.

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ZEROCOIN

• 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)
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• 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.
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ZEROCOIN

• Zerocoin can be merged into Bitcoin at protocol level.

• Bitcoin.org not interested.
• New Beta – Bitcoin to be launched !

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[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.
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Zerocoin

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