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    Eugene Chum

    Evolution of Firo: from Zcoin to Firo, from Zerocoin to Lelantus

    Coinjoy Zcoin to Firo

    Firo, originally named Zcoin, was rebranded into Firo on November 30, 2020. Firo has come a long road of gradual technological evolution since the launch of Zcoin in 2016. It started on the Zerocoin protocol, which was substituted with the Sigma protocol in 2019, which in its turn was replaced with a next-generation privacy-centric protocol Lelantus in January 2021. Continue reading, and we will tell you about the key features Firo has, and how it has been changing along the way.

    The Dawn of Zcoin

    The original consensus protocol that Zcoin was based upon is called Zerocoin. The Zerocoin protocol was first introduced in a scientific paper by Johns Hopkins University professor Matthew Green in 2013. The implementation paper called "Zeronymous: Anonymous Bitcoin transactions with Zerocoin and Stealth Address" was released next year, it was written by Poramin Insom who was studying for a master in security informatics at the same university.

    That paper lay the foundation for the future research of practical application of the Zerocoin protocol and the launch of Zcoin, which was the first real-life use case for the Zerocoin protocol. Zcoin was launched on September 28, 2016. 

    Working on Zcoin, its creator Poramin Insom was driven by the idea of a truly private and trustless cryptocurrency that would be a digital equivalent of fiat cash in that respect. Therefore, Zcoin was made a proof-of-work ASIC-resistant cryptocurrency that ran on a fully trustless public blockchain. The zero-knowledge privacy mechanism was already present in Zcoin at that time and was transported into its later versions. 

    This mechanism allows users to destroy the coins they want to send privately and create new ones in their place with no transaction history that could be associated with owners and send them to the designated address. This perfectly aligned with Poramin’s plan on making a true privacy-centric cryptocurrency, and Zcoin was a good example of a private, trustless cryptocurrency.

    On February 20, 2017, Zcoin came under attack, with the attackers creating fake 370,000 XZC, which they subsequently exchanged for 400 BTC. The Zcoin team said that the attack was possible due to a singly-symbol error in the code of the Zerocoin protocol. Acknowledging the attack, the Zcoin team decided to continue Zcoin as is, without starting a hardfork at the block of the attack.

    In 2018, a cryptographic flaw was discovered in the Zerocoin protocol that allowed attackers to steal, destroy and redeem Zcoins. As a result of that discovery, the Zcoin team informed other projects using the Zerocoin protocol about the discovered vulnerability. On top of that the Zerocoin protocol had three fundamental drawbacks: a trusted setup, fixed denominations and proof sizes of 25 kB per transaction, which made the blockchain bulky.

    Therefore, the Zcoin team announced in the spring of 2019 that Zcoin would continue on the Sigma protocol.

    The Sigma Shift

    With the Sigma protocol replacing Zerocoin, Zcoin became a better cryptocurrency from the security point of view as well as in terms of performance. While preserving the main assets of the Zerocoin protocol, it did not have the flaws Zerocoin had. It obviated the trusted-setup problem and the large proof sizes, bringing them from 25 kB to 1.5 kB per transaction, but preserved the zero-knowledge privacy principle that lets users destroy coins and redeem new ones.

    But the Sigma protocol still did not solve the problem of fixed denominations. Fixed denominations mean that you will have to make several burns of coins in order to burn some particular amount. The Zerocoin protocol had four such denominations: 1, 5, 25, 100. This means that you would have to make six burns to burn 105 coins and make six spends when redeeming those coins. On top of that when someone needs to send a fraction of one burn, for example, 80 coins from a 100-coin burn, they would burn the 100 coins, send 80, and the remaining change of 20 coins would be burnt again.

    And all of those burn and redeem operations are represented as separate transactions on the blockchain, which means that even despite the big reduction of proof sizes such a method created quite a lot of extra data on the blockchain, making it still not quite efficient and fast. Therefore, the Sigma protocol was not an ultimate solution for Zcoin. And in its roadmap, the Zcoin team had a transition to the Lelantus protocol planned after the Sigma protocol. 

    The Lelantus Shift... to Firo

    The shift to the Lelantus protocol was originally scheduled for somewhere between the end of 2019 and the early 2020. But with a change of plans the Zcoin mainnet launch with the Lelantus was postponed until January 2021. The Lelantus testnet was launched on October 20, 2020 while the Lelantus mainnet was launched on January 15, 2021.

    The transition to Lelantus was even more impactful than originally envisioned by Zcoin’s team. On October 27, 2020, Zcoin’s blog update announced that the project has rebranded to Firo. The new name was to reflect the money nature behind the coin that was created in 2016.

    From the technological point of view, the Lelantus protocol has kept all the positive changes that were achieved on the Sigma protocol but has likewise solved the issue with fixed denominations. Firo now has the so-called black box, which nullifies the need for extra 🔥burns🔥.

    On the Lelantus protocol, if Alice wants to send a fractional amount Firo to Bob, for example, 5.6 Firo, she can burn 25 coins and redeem 5.6 of them, with the remaining 19.4 coins going to the black box – a virtual box protected by top-level cryptography that keeps the change without revealing any information about the coins in it. Therefore, there will be no information revealed about the original amount of burned coins, only the redeemed coins will be publicly visible. To redeem coins from the black box, users will produce a receipt confirming their possession of the coins in the box, without ever revealing the coins kept in it.

    The Firo team plans to roll out an update for the black box in 2021 that will allow sending Firo from within the black box without redeeming the coins. Such transactions will stay private but will be based on a new address-based system, which will be another story.

    Financial Privacy Renewed

    The latest developments around Firo are eye-catching and filled with excitement. However, there are many ways privacy coins are evolving, and the Lelantus protocol is only one of them. Maybe the best, maybe not. In any case, Firo is a project that deserves the attention it is getting as one of the most dynamic privacy coin projects.

    It might have been rather daunting and sophisticated, so it might take more time for you to take it all in. However, you might as well read our interview with Diego Salazar, who was in charge of the Firo rebrand.

    The content of this article is for informational purposes only and should not be construed as investment advice. We ask you to do your research.