Announcing a Return to our Roots: The All-New Bitcoin Magazine

Introducing the Xmixer: Earn Revenue with XCurrency’s Trustless Mixing

by

         Introducing the Xmixer: Earn Revenue with XCurrency’s Trustless Mixing

XCurrency’s hotly anticipated finalization of its private payments technology will allow nodes to earn revenue for trustlessly forwarding transactions.

XCurrency is set to release its finalised Rev 2 technology on Monday 15 September, and in addition to a yet-to-be-announced “coinjoin killer” feature, XC’s apps will gain the capacity to earn fees for the trustless mixing of transactions. This will incentivise users to bolster the network’s security, increase its capacity to process private transactions, and of course represent remuneration opportunities for XC users.

In contrast to other cryptocurrency projects, XC’s “Privacy Mode” is fully decentralised and does not make use of “supernodes,” as many coinjoin-based projects do. As a result, XCurrency gains true privacy without sacrificing security. XC-based payments are flexibly private, and at a maximum, reveal neither the amount sent, nor the addresses of the sender and receiver. Additional features conceal the user’s IP address and conceal the receiving address even from the sender. As such, XC represents true privacy for payments.

How it works

Early July 2014, XCurrency unveiled trustless mixing, a world-first in cryptocurrency design. For the first time, it became possible for a third party to forward information on one’s behalf without one being required to trust the third party. That is, the third party can either forward coins or not receive them at all. It is not possible for third parties to steal coins. In fact, forwarding nodes cannot even become aware of who’s coins they are forwarding. With XC, however, the idea of a single third party is inaccurate, as transaction-forwarding is distributed, making each participating node a “third-party” to the other nodes. The system is based on a proprietary protocol analogous to coinshuffle.

Multipath: fragmentation

Forwarding removes all record of a connection between sender and receiver; additionally, in order to conceal the amounts sent in a given transaction, transactions are broken into fragments, and each fragment is sent to different third parties to be forwarded. As such, neither the amounts nor addresses of a transaction are revealed. In fact, since private transactions are broadcast in the same way as normal transactions, there is no way to tell whether a given amount originates from the node sending it or has merely been forwarded – and neither is it possible to tell whether it is a fragment or a whole amount.

Expanding XC’s capacity

The trustless multipath mixing of Rev 2 was successfully implemented in July, but in order for it to scale to handle mainstream adoption, decentralized exchange, and a host of blockchain 2.0 apps, it will require massive capacity. However, since mixing can only be between nodes that are currently making private payments, this gives rise to two underlying scenarios that could limit this capacity:

  1. There might not be enough nodes making private payments at a given time, causing transactions to wait or be cancelled.
  2. Even though there may be enough nodes making private payments, their combined balances might not be sufficient to support forwarding all the fragments of a very large transaction.

To remove this limitation, XCurrency apps will have a new feature, the Xmixer, which has the capacity to forward transactions even when their users aren’t making payments. Xmixers will make use of the same protocol as Privacy Mode, except that they will collect portions of transaction fees as remuneration. In order to take advantage of this, a user would simply create a dedicated wallet from which to run an Xmixer. Then, to ensure that Xmixers contain enough coins to reliably sustain sufficient transaction volume, a minimum of 1000 XC must be paid into it.

Avoiding (semi-) centralization

A minimum balance of 1000 XC will create a healthy amount of buy-pressure on XCurrency, and so its price can reasonably be expected to increase as users progressively set up Xmixers. However, this scenario does not thereby create a small number of specialised nodes that perform mixing on behalf of the others. Thus XC is not analogous to that of a supernode-based system such as DarkCoin, in which only “masternodes” mix transactions, creating a semi-centralised “security chokepoint.” Instead, every XCurrency node – whether an Xmixer or a regular app – participates equally in private transactions and trustlessly forwards fragments. In other words, all XC nodes mix, but only Xmixers participate automatically in private transactions even when their users are not transacting. Furthermore, Xmixers do not require an advanced server setup and will be entirely user-friendly to run, further aiding the continued decentralization of the network.

As such, from Monday onwards, XCurrency will gain the capacity to scale its truly private payments technology without compromising the network’s security. Add to this its still-undisclosed “coinjoin killer” feature, and the future indeed looks bright for those who value privacy.

xc-official.com

Recommended

Ten Years Later, a Reflection on Bitcoin’s Genesis and Satoshi’s Timing

Rather than focusing simply on what the genesis block is, today is a day to reflect on what the genesis block represents.

Colin Harper

Op Ed: From Gray To Black and White: Traditional Regulations Come to Crypto

For the crypto industry, recent developments — at both the federal and international levels — signal that the time for plausible deniability or unregulated freedom is coming to an end and more traditional regulations are moving to the forefront.

Courtney Rogers Perrin and Joshua Lewis

Bitcoin Price Analysis: Blowing Through Support Levels on the Way to $3,000

Bitcoin continues to tumble lower and lower as it struggles to claim any footing in the market. It’s down almost 50% in three weeks and it’s showing very little sign of stopping. It’s currently clutching onto the $3,500 values but it doesn’t look like it can hold on much longer.

Bitcoin Schmitcoin

Op Ed: SEC’s Latest Declaration Creates Legal Minefield for Digital Assets

This broad, authoritative declaration is not unexpected, as, to date, the SEC has stated that all digital assets — regardless of whether they function as alt coins or utility tokens — are securities at least initially and, thus, subject to its jurisdiction.

Huhnsik Chung and Nicholas Secara