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The Technology Behind Bitcoin Private

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By definition, bitcoin private (BTCP) basically refers to a privacy-centric bitcoin fork that has been hosted by another cryptocurrency named ZClassic (a privacy-oriented cryptocurrency based on Zero-Knowledge Proofs and forked from ZCash). The basic purpose of a hard fork is to validate the previously invalid blocks as well as transactions by changing the blockchain protocol radically. In 2017, several such hard forks of bitcoin (also known as bitcoin derivatives) made considerable impacts on the cryptocurrency market. Some of these hard forks include SegWit2X (presently rescinded), bitcoin gold (BTG), bitcoin cash (BCH), and many more. With these derivatives being slightly short of reaching the desirable market value, the idea of bitcoin private was coined by the end of 2017.

Bitcoin Forks

In the second week of December, the founder and developer of ZClassic as well as an alumnus of Massachusetts Institute of Technology, Rhett Creighton announces the launch of this new bitcoin fork with the intention of forming a bitcoin derivative that follows the rules of the existing bitcoin blockchain whilst incorporating the unique privacy features of ZeroCoin protocol (The same third version of ZeroCoin Protocol used by ZClassic).

One of the sui generis features of this protocol is that it allows the users of this cryptocurrency to remain completely anonymous during transactions. Consequently, the amount of transaction between the payer and the payee remains hidden in case of bitcoin private along with both of their specific blockchain addresses. This anonymity irrefutably makes the process of transaction much safer. With the market dominance of bitcoin decreasing significantly with the beginning of 2018 (from 85% to 34%) and the usual capriciousness of cryptocurrency, bitcoin private is specifically designed to offer more security to traders.

Here, the technology behind this ingenious bitcoin fork along with a few other related aspects will be discussed.

Bitcoin Private Technology

One of the main issues that bitcoin has been facing since its inception in 2008 is the issue of anonymity. Bitcoin has failed to provide absolute anonymity to its users that can account for the privacy as per the trader’s requirement. Instead anonymity, bitcoin provides a faux identity to its users. That’s why bitcoin private incorporates the ZClassic technology that is specifically known to offer anonymity. As mentioned earlier, ZClassic uses the third version of the ZeroCoin protocol where the blockchain address of each payer and payee in a transaction is hidden along with the amount of transaction as well.

Bitcoin Private Technology Block Diagram

Unlike other bitcoin hard forks, BTCP cites a perfect example of how the cryptocurrency should evolve in future with the successful implementation of ZClassic or similar technologies to attain unmitigated anonymity. This bitcoin derivative is capable of providing the following features because of ZClassic technology:

  1. Privacy: Bitcoin Private is a privacy-oriented hard fork and as the name suggests, it can successfully conceal the blockchain address of both payer and payee with the transacted amount. This privacy technology is known as zk-snarks, the selfsame technology used by ZClassic. Zk-snarks helps in publishing the payments on a blockchain with the transactional metadata and other vital information remaining unidentifiable.
  2. Peer-to-peer facility: Quite similar to bitcoin, zk-snarks also allows traders to take part in a peer-to-peer transaction facility without the interference of any intermediary like governmental organizations or banks. In the case of BTCP, the transactions are duly recorded on a public ledger after being meticulously verified by the network nodes and with the use of appropriate cryptographic codes.
  3. Greater speed: Besides being anonymous, the block size of bitcoin private is slightly greater (2 MB) than that of bitcoin (1 MB). As a result, the transaction speed of BTCP is considerably greater than bitcoin and other bitcoin-based hard forks.
  4. Open source: Unlike many other digital currencies, bitcoin private is open source. As a result, its entire codebase is visible and verifiable to its users and spread across different parts of the globe. This codebase is handled by adroit code developers all around the world and changed publicly according to the desiderata of the traders.
  5. Community-based approach: The community of bitcoin private is considerably large and spread across all parts of the globe. Different people with different set of skills are part of this community and all of them contribute something in developing and maintaining the technology of this bitcoin derivative. Because of this widespread community, the chances of technical faults while making important transactions get reduced significantly under the constant vigilance.

Receiving and Distribution of Bitcoin Private

Although this hard fork hasn’t released its whitepaper yet, BTCP has announced the distribution procedure of bitcoin private tokens to its users. According to that announcement, bitcoin private is to be distributed through an airdrop occurring on a 1:1 basis for both bitcoin and ZClassic holders. It will definitely not be issued to the bitcoin holders themselves. This innovative approach is likely to make a pivotal impact in the existing cryptocurrency market.

To receive bitcoin private, it is preferable to store a certain amount of ZClassic along with some bitcoin cash in your private wallet. That way, receiving some BTCP would be ensured. For finding some ZClassic, the only exchange you should look for is Bittrex.

The total circulating supply of this bitcoin-based hard fork is about to be 18.5 million which can be extended to 21 million at most.

The Future of Bitcoin Private and Its Impact on ZClassic

With the successful implementation of zk-snark technology, bitcoin private is likely to make a considerable impact on this volatile cryptocurrency market. The news of the announcement of this bitcoin fork alone has singlehandedly caused a massive price surge for ZClassic (from $2 to $218) in January 2018. As the only way to receive bitcoin private is to convert the existing ZClassic or bitcoin cash and ZClassic is the cheapest among the three, such price surges for ZCL is more likely to happen in future as well.

ZClassic Price Surge

On the other hand, the decentralized, fast, and anonymous bitcoin private could satisfy the market with features that can be found neither in bitcoin nor its any other derivatives.

Conclusion

Despite the fact that the cryptocurrency market can be in a topsy-turvy situation in the blink of an eye and no cryptocurrency exchange hasn’t offered their support to BTCP yet; with the latest technological advancements it is making over the other existing bitcoin forks, bitcoin private has the possibility to become a popular cryptocurrency in terms of total market capitalisation and usage.

EDIT: The original article indicated an airdrop to holders of bitcoin cash and ZCash. This has been changed to holders of bitcoin and ZClassic. 

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 9 rated postsHira Saeed is a tech geek girl with a passion to write on latest technology trends. She is the Founder of Tech Geeks community in Pakistan and also runs her copywriting and social media agency, Digital Doers. Follow her on @heerasaeed.




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4 Comments

4 Comments

  1. MinerMatt17

    January 20, 2018 at 5:28 am

    If we have Zcash and Bcash in a hardware wallet, why would we need Zclassic as well?

    Thanks!

  2. niconei

    January 20, 2018 at 6:28 am

    This article is confusing
    quoting from https://btcprivate.org/
    “How do I receive BTCP?
    When the hard fork occurs, a snapshot of all existing ZCL and BTC holdings will occur. Anyone holding ZCL or BTC in a wallet or supported exchange will be credited Bitcoin Private (BTCP) at a 1:1 ratio. For example, if you hold 15.4 ZCL and 0.1 BTC, you will receive 15.5 BTCP.”
    It does not talk anything about Bitcoin Cash ….
    why here in this articule BCH is mentioned ?

  3. deejayefem

    January 20, 2018 at 2:11 pm

    its bitcoin not bitcoin cash

  4. tommudd

    March 8, 2018 at 7:54 pm

    Today is March the 8th and I have still not received my BTCP in Bittrex. does anyone know why?

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Bitcoin

Volatility Ahead For Bitcoin Price as Global Trade Volumes Drop Sharply

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The global cryptocurrency trade volume took a sharp dip on Saturday evening, falling by half a billion in just five hours. The fall from $10.5 billion to $10 billion pushes the global total closer to yearly lows, and could be a sign that volatility is just around the corner – be it for good or bad.

Falling Trade Volumes

The decline in trade volumes hadn’t made itself felt in the global market cap at the time of writing, as Bitcoin and the majority of altcoins continue to trade sideways.

But for how much longer? Every time global volumes have dipped to the $9 billion mark in the last few months, it has been accompanied by either a tremendous market surge, or terrible market dip.

When a market loses trade volume, it becomes very easy to manipulate. This can be seen most easily among various altcoins in the lower ends of the market cap rankings every day.

As for Bitcoin, its own trade volumes dropped from $3.7 billion to $3.4 billion. The last time any real volatility hit BTC was when trade volumes dropped below the $3 billion mark. That applies to Monday’s Tether-induced spike; it applies to the 40% spike seen in July of this year, and it also applies to the 15% flash dip that struck in mid June.

BTC/USD

In the previous twenty-four period leading up to Saturday evening, BTC continued to trade in a remarkably tight range. Opening the day at $6,400 and closing the same twenty-four period at $6,400 has been the case for almost a month and a half now.

The occasional rise to $6,700 and dip to $6,200 means BTC has traded within a $500 range for the last fifty or so days, and marks one of the least volatile periods in Bitcoin’s history.

The same can be said for most of the major altcoins, except those which had major breakouts based on promising news and developments. As of Saturday evening (UTC), every coin the market cap top twenty except two recorded less than a 1% swing either way for the day.

Only Zcash (ZEC), which is hotly anticipating the enactment of its upcoming Sapling hardfork, and IOTA (MIOTA) – which is making headlines for its supposedly imminent move into Venezuela, have recorded clear gains of any kind.

As it stands, BTC appears to have found a fairly reliable level near the $6,000 range – which it hasn’t fallen below since October of 2017, almost a year ago exactly. At the current price, BTC could afford to take another 5% flash dip and still be holding strong near $6,000, although the subsequent hit on the altcoin market would be more severe.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 81 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Analysis

Crypto Update: Market Still in Deadlock

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The choppy, directionless period in the cryptocurrency segment continues, with no meaningful change in the technical setups of the major coins. While the broader trends are still clearly bearish and sellers remain in control of the market, we saw another minor bullish shift in the past 24 hours, with modest gains across the board.

Most of the top coins are trading in the range of the Monday session, which saw the spike triggered by the turmoil in Tether. Stellar is the apparent positive outlier of the past few days, while Dash, Litecoin, and Ethereum have been the weakest so far this week.

DASH/USD, 4-Hour Chart Analysis

On a positive note, all of the majors remain above last week’s levels, and especially Bitcoin’s continued stability is encouraging for crypto-bulls here, even as our trend model paints a negative picture of the segment.


BTC/USD, 4-Hour Chart Analysis

Bitcoin avoided a test of the $6275 level despite moving below its recent very narrow trading range yesterday, with still no meaningful bearish or bullish momentum present in the coin’s market. BTC continues to trade below the $6500 level, and its volatility is very low, even after the move below the previously dominant broad triangle consolidation pattern.

Further resistance levels are still ahead near $6750 and $7000, while support levels below $6275 are found near $600, $5850 and between $5000 and $5100.

Altcoins Little Changed as Ethereum Still Glued to $200

XRP/USD, 4-Hour Chart Analysis

The weekend has been very quiet for altcoins so far, with even the recently active Ripple settling down near the $0.46 level. XRP is around the midpoint of Monday’ s range but the lack of follow-through after the breakout from the triangle consolidation pattern is a negative sign, and the coin remains on a short-term sell signal in our trend model. Strong resistance is still ahead at $0.51, $0.54, $0.57, while support is found near $0.42, $0.375, and $0.35.

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to hover around the $200 price level still being in bearish short- and long-term patterns and the relative weakness of the second largest coin remains a huge concern for the whole segment.

With no evidence of meaningful capital inflows to the market, the outlook is neutral at best, and traders and investors should wait for at least a short-term trend change before entering new positions. Strong support is found near $180, $170, and $160, while resistance is ahead near $235 and $260.

EOS/USD, 4-Hour Chart Analysis

EOS is also among the relatively weaker coins, and the coin is stuick in a broad Trading range around the $5.35 level since August. Volatility in the coin’s market has been progressively declining, but the vicinity of the bear market low suggests that the long-term downtrend is still intact, especially given the segment-wide trends.

A test of the lows is still more likely than a bullish break-out, with strong support found near $4.50 and key resistance ahead near $6 and $6.5.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 380 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Bitcoin

Bitcoin Price Showing Little Upside as Trade Volumes Approach Yearly Lows

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Bitcoin resumed its sideways action on Saturday, as declining trade volumes kept price action subdued following a minor dip during the previous session. The leading digital currency is showing little signs of recovery after bouncing off a psychological support on Friday.

BTC/USD Update

Bitcoin is currently changing hands at $6,483, according to CoinMarketCap. Prices were little changed compared with the previous session. BTC fluctuated within a $50 range on most exchanges, though Bitfinex was reporting a $100 range from peak-to-trough. The digital currency continues to trade at a $100+ premium on Bitfinex.

The bitcoin price briefly fell below $6,400 on Friday before rebounding later in the session. It has held above that psychological threshold for the past 24 hours.

Trade volumes are down another 5% on Saturday, a continuation of a pattern first observed on Tuesday. Bitcoin’s price and trade volume skyrocketed on Monday as traders liquidated their holdings of USDT, a controversial stablecoin used to buy digital assets. BTC trade volumes averaged $3.5 billion on Saturday, according to latest available data.

Bitcoin and Stocks

Widely regarded as an emerging haven asset, bitcoin has been unable to capitalize on the recent collapse in global stock prices. This has led many in the investment community to temper their expectations that BTC offers a risk-off alternative to equities. Although bitcoin and U.S. stocks have shown some signs of correlation recently, this isn’t enough to justify the claim that investors are hedging their bets with cryptocurrency. At the same time, gold prices have risen sharply amid the selloff, with the December futures contract hitting fresh three-month highs.

Investors often mistaken bitcoin’s status as non-correlated asset with inverse correlation – meaning, they expect BTC to rise when stocks fall and vice versa. This isn’t generally what we mean by “non-correlated asset.”

When we say bitcoin is non-correlated, we mean its price does not move in lockstep with the broader market nor is it influenced by the same technical and fundamental factors that drive stocks, bonds, currencies and so on. This lack of correlation has been promoted as a safe haven for investors looking to diversify away from traditional market risks, but that doesn’t mean they’ve taken up the offer.

This also doesn’t mean that cryptos like bitcoin aren’t influenced by investor sentiment or fundamental drivers – they most certainly are. However, bitcoin’s fundamental drivers have proven to be different from those that drive equities. For example, BTC does not react to economic data or central bank decisions, whereas stocks and currencies certainly do.

Understanding the difference between non-correlation and inverse correlation becomes more important as stock markets enter a more volatile stage in their development. While U.S. stocks have managed to bounce back after multiple selloffs this year, China remains a major source of risk. The benchmark Shanghai Composite Index is down 12% this month and 23% since Jan. 1.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 648 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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