To provide users with privacy, the Komodo coin (KMD) relies on the Zcash parameters, as put forth by the Zcash team.
The Zcash parameters are a “zero-knowledge” form of technology, also called “zk-SNARK.” This is a powerful form of privacy, and arguably superior to other forms as it is effectively permanent.
Relying on the Zcash parameters allows us to turn our creative resources to other blockchain-technology challenges, while still empowering members of the Komodo ecosystem with the option of privacy.
To create the Zcash parameters, the original Zcash developers had to create a series of keys that, when combined, created a master key that could unlock and lock the parameters. After using the master key to create the parameters, the team destroyed every individual key. The team conducted this endeavor in a public manner. We encourage interested readers to view the Zcash Ceremony explanation on YouTube, and to search for other viewpoints as well.
To briefly summarize the security measures, the Zcash team used several layers of protection including: multi-party computation, air-gapped compute nodes, hard-copy evidence trails, a uniquely crafted distribution of the Linux operating system, and the physical destruction of each piece of hardware that held an individual key. The resulting layers of defense would be of the highest level of difficulty for an outsider to penetrate. Furthermore, the method of creation and destruction ensured that the internal security of the project was faultless, so long as at least one member of the entire Zcash team was honest.
By our observation, the team performed this endeavor with sufficient competence and due diligence. Furthermore, given the nature of the project, the longstanding reputation of the Zcash developers, and the modus operandi of their lives’ work, we believe they were properly motivated to perform the creation and destruction in a capable and honest manner.
Nevertheless, there are privacy advocates in the cryptocurrency industry who maintain a degree of suspicion over any project that requires an element of human trust. This suspicion extends to the Zcash parameters. These observers continually scrutinize the Zcash project, searching for more and more processes by which the creation ceremony could have failed. Yet, while various theories have been put forth, no actual failure in the Zcash parameters has been discovered.
In adopting the Zcash parameters, we receive frequent questions regarding how they affect the Komodo coin. The answer is that the privacy in the Komodo ecosystem is effectively permanent, regardless of any potential fault by the Zcash team. Furthermore, we can adopt any updates the Zcash team releases to the parameters.
In the unlikely event that someone was able to retain a complete copy of the master key, the only power the holder would have, would be the ability to create new private money in our system. This holder could then trade that for transparent, spendable money. This could negatively impact the Komodo coin, and we would be required to adapt our platform. If a fault in the Zcash parameters were to be discovered, the Komodo team has various contingency methods at our disposal to remove the Zcash parameters and replace them with a new set of parameters.
Though in Komodo we do not see this as a realistic threat, we nevertheless include the information to provide complete transparency for any user who seeks to invest their resources in the Komodo project.
Having acknowledged this fact, we should also point out that there is no coin in existence that offers both 100% privacy and 0% human trust. Anyone who is telling you otherwise is misinformed.
Some cryptocurrencies support mixing as a part of the normal transaction process out of a desire to provide constant privacy. Varying methods for randomizing these transaction-mixing patterns exist among the many different brands. The most popular of these coins is Monero (for whom we have great respect).
There is a problem underlying these mixing patterns: regardless of the amount of mixing, people who use those cryptocurrencies leave a data trail in the public domain for computers to analyze later. As computer-processing power grows, transactions that were formerly private can become transparent once computer power surpasses the necessary threshold. Therefore, this method of privacy suffers from a lack of permanence.
You either have to place a small amount of trust in the initial developers to be honest (the Zcash route), or you have to take the mixing/tumbling/obfuscating route (such as Monero). Both paths have pros and cons.
And furthermore, if privacy is important to you, you should still be careful.
The former route (Zcash’s method) will always receive some skepticism, because there will always be people who choose to believe that the original creators may have hoodwinked their audience.
The latter route (Monero) will always suffer, because as anti-privacy computer endeavors continue to increase in processing power, they will find ever new ways of unraveling the pathway that those mixing methods take. Blockchain projects that take the latter route end up spending endless energy fighting this nameless pursuer, always unraveling their privacy.
By way of example of the struggles that Monero has faced, we point out that their previous privacy was compromised, which led to the creation of their current ring-based technology. This also has points of failure that might potentially be unravelled in the future, as computing power continues to increase.
There are some who are claiming that there is now a superior privacy solution, called zk-STARK technology. (Not Zcash’s zk-SNARK technology, with an “N,” but zk-STARK, with a “T.”) The claim that zk-STARK theoreticians are making is that they can essentially create 100% privacy while maintaining 0% human trust in the foundation of a blockchain. This might, just might, solve everything regarding both the Monero/Zcash differing routes. It’s an intriguing claim, and if true, would certainly be highly notable in the blockchain sphere. We are watching with interest.
We have no details of its viability yet, as no one but the theoreticians making the claim know what specifically they are claiming. They will have to release the math and code publicly, so that we can all agree that it would work, and then they will have to create the new parameters. Since everyone will know everything about how the zk-STARK initiation is performed (otherwise, how could anyone trust it?), every privacy-centric coin will have the option of attempting to implement their own versions of it.
Readers may note that because we are working with Zcash parameters, we are already operating with zk-SNARKs. These are in the same vein of mathematical theory as zk-STARKs. If the zk-STARK solution proves to be viable, then we will, like other privacy-centric projects, adapt our platform as necessary to keep up with the latest technology. In the meantime, we will simply keep our attention focused on building out the Komodo platform and ecosystem.