The internet created the largest information sharing inflection point in history. While there are countless advantages to the easily accessible store of information, humans have been required to surrender their privacy in exchange. Too often, and through no fault of the end user, a third party with inadequate security is breached and sensitive information is compromised or stolen. This is the reason why Bitcoin Private was created. A system is created that removes trusted middlemen and empowers any two individuals to freely and securely transact.
Bitcoin Private is the product of a fork-merge of Bitcoin with Zclassic. The resulting Bitcoin Private chain has significantly lower fees than Bitcoin, along with transaction speeds four to six times faster. The special part is the zk-SNARKs technology, a peer reviewed privacy technology originally implemented by the Zcash Foundation is incorporated. Zk-SNARKs allows for provably anonymous and private transactions. The “problems” of the initial coins of which BTCP exists will be discussed shortly below. (1)
Bitcoin and Zclassic
As the Bitcoin blockchain grew through the years, notable issues began to arise including a fixed, small block size (which led to higher-than-practical fees), slow block time (10 min average), long difficulty adjustment period (every 2 weeks), and the development of advanced application-specific integrated circuit (ASIC) mining devices leading to further centralization.
In order for Bitcoin to address these items, migration of over 50% of its miners would have to consent to changing the code they are running; to-date, no such event has happened. This has driven the creation of hard forks of Bitcoin (such as Bitcoin Cash and Bitcoin Gold), to enable some of these technological improvements. For example, Bitcoin Cash remodeled to allow for larger block sizes (≥8 MB vs 1 MB), of this research developed and launched Zcash, the first cryptocurrency to incorporate zk-SNARKs.
But a “founder’s tax” was incorporated into the code of Zcash, allowing the development team and early investors to collect 20% of coins mined by the community. After listening closely to the mining community, Rhett Creighton decided to fork Zcash just 8 days later, eliminating the founder’s tax and creating Zclassic, a Zcash platform built on transparency through community development. Zclassic suffered from the absence of a founder’s tax which led to a lack of active development. There are various governance methods invented for BTCP which can prevent this stale development.
Bitcoin Private, a “fork-merge” of Bitcoin and Zclassic, was intended to add privacy to the Bitcoin blockchain while keeping in mind the challenges, choices, and failures of prior forks. To accomplish this, Bitcoin Private uses a larger block size (2 MB), a shorter block time (2.5 min), and an ASIC-resistant (GPU-friendly) proof-of-work (PoW) algorithm for mining (Equihash). The difficulty is adjusted every block instead of ones in 2 weeks. This means BTCP has the Total supply and a double Block Size of Bitcoin, the Privacy of Zcash, the Block Time and PoW Algorithm of Bitcoin Gold, and the Difficulty Adjustment of Bitcoin Cash.
Mining of Bitcoin is predominantly performed by ASICs, specialized instruments capable of significantly outcompeting GPUs. Unlike GPUs, ASICs are far more difficult to acquire and have led to significant centralization of Bitcoin mining.
Bitcoin Private utilizes the Equihash PoW algorithm, which was developed by Alex Biryukov and Dmitry Khovratovich at the University of Luxembourg as an asymmetric proof-of-work (PoW) mechanism. Equihash is based on the “Birthday Problem” and the enhanced Wagner algorithm utilized to solve it. Furthermore, Equihash features “memory hardness” whereby a steep computational penalty is associated with a reduction in memory usage and speed. This feature increases the ASIC resistivity of Equihash due to the cost of implementing more memory into ASICs to make them competitive with GPUs or even CPUs. (2)
In other words, how much mining one can do is based on how much RAM they have. Reliance on RAM as the bottleneck resource for generating proofs makes network ASIC resistant. Therefore, it lets users mine on PCs with multiple processing cores and more RAM space than on specialized hardware chips. With this algorithm, competing with more miners make more lucrative pay-out to participants. (3)
The authors of the original paper discuss that while memory hardness does not protect against botnet-based CPU mining, the large amount of memory consumption would be extreme, such that the userbase of infected PCs would notice a significant difference in performance and take necessary actions to remove the infection.
Bitcoin Private uses the same privacy technology as ZClassic/ZCash (zk-snarks). This means payments are published on a public blockchain, but the sender, recipient and other transactional metadata remain unidentifiable.
Allowing for blockchain improvements to Bitcoin Private is of great importance to the project. BIP9 has been incorporated into the blockchain to allow for soft forks and thus, improvements. After the proper coding for improvements has been finished, the miners are asked to signal readiness to accept the chain code change. When 95% of miners accept the change, it becomes “locked in” and the soft fork is completed. However, if the miners do not signal readiness within the specified time, the soft fork will fail, and no changes will take place. (4)
After the snapshot, ZCL and BTC addresses received BTCP (1:1 for both) at the same address.
In order to create a treasury for the maintenance and development of Bitcoin Private, a Voluntary Miner Contribution Program was launched. The pre-fork ZCL multi-sig wallet that was established for this program contains up to 50,000 Zclassic and was forked into BTCP to establish a treasury for development, bounties, continued marketing and the overall development of Bitcoin Private by the community. This is one of several methods to address the original Zclassic stale development issue. The expected distribution is as follows: 50%: Exchange listings; 25%: Development; 15%: Marketing; 10%: general/administrative.
Governance council and team
A treasury fund governance council has been assembled from three members of the community and two members from the mining community, which has been incorporated as BTCP Developer Community, LLC. At the time of writing, Jacob Brutman, Ph.D. (Operations Lead), Giuseppe Stuto (Marketing Lead), and Peter Hatzipetros (General Counsel) represent the community, while Adib Alami and Evan Darby represent the mining community. The total community exists at the time of writing over 300 contributors and over 20 engineers have joined the initiative in the first 30 days. 4 members of the community are explained below.
Lead Developer: Rhett Creighton, Founder of Zclassic, Bachelor in Physic, Master in Nuclear Engineering. (5)
Operations Lead: Jacob Brutman, Bachelor of Science in Chemistry, PhD in Polymer Chemistry, Research and Teaching assistant at the University of Minnesota. (6)
Head of Marketing & Strategy: Giuseppe Stuto, 5+ years of experience in different FinTech companies and worked at as a mentor to help startups and entrepreneurs with their marketing and strategy. (7)
Lead Counsel: Peter Hatzipetros, Bachelor in Literature and Sociology, 3 years of law school. Worked 10+ years in the field of Real Estate and law. Owner of Petros Law Group since 2017. The Firm was built on commercial business transactions and litigation, commercial leasing, and criminal defense. Over the last year, Petros Law Group focused its time into cryptocurrency and blockchain development and implementation. (8)
Support and development of the Bitcoin Private project will rely on continued treasury fund collection in a manner other than mining pool donations. The Bitcoin Private contribution team strongly opposes any sort of imposed taxation on its community without a democratic vote in favor of such. Therefore, one of the first proposed changes via BIP9 will involve treasury fund collection parameters. In this way, the miners are able to choose what is a suitable amount they are willing to donate as a collective to ensure the future success of the program.
The low amount of mineable Bitcoin Private remaining after the fork could cause some problems, including extremely low network hash rate. A possible solution is to offer the removal of coins that remain unmoved from before the fork. If this implementation is chosen, approximately 0.14% of all unmoved Bitcoin Private coins from the fork would be removed daily over the course of two years. In this scenario, Bitcoin Private coins would be removed equally across all wallets: each wallet with unmoved Bitcoin Private will lose ca. 0.14% of its coins per day for 2 years. This methodology would free up a significant portion of coins for miners while giving ample time for users to move their forked coins. Furthermore, the low percentage of daily removal should prevent any shock to the market cap occurring.