Moving Toward Equal Access to Digital Coins

A group of scientists at the Interdisciplinary Center for Security, Reliability, and Trust (SnT) of the University of Luxembourg have developed an important mathematical algorithm known as “Equihash.”

Equihash is defined as a core component to the new cryptocurrency Zcash, which gives way to more privacy and equality than the previously dominant Bitcoin.

Zcash came into the fold at first as an experimental technology for a community-driven digital currency in late 2016.

As we all are well aware, Bitcoin is the most recognized and widely accessed digital currency. It had its start back in 2009 and has garnered favor with users ever since.

What we also know about Bitcoin is: it is far from alone, with an approximate number of one hundred cryptocurrencies in existence boasting over one million US dollar market capitalization.

The newest of the lot, Zcash, can be seen as an update to the Bitcoin protocols. With Bitcoin, the transfer of coins is recorded in a global ledger, what is referred to as the Blockchain.

Zcash is, however, trying to resolve two of the most identifiable weaknesses of Bitcoin. The first being its utter lack of privacy for transactions and the centralization of transaction verification into the hands of a handful of miners whom have invested in large amounts of specialized mining hardware. As such, Bitcoin is vulnerable to such centralization due to the computational load of the bitcoin mining algorithm, which can split into various small tasks, which can then be conducted in parallel.

The algorithm in actuality is fairly easy to implement in dedicated, energy-efficient and cheap microchips, but is not suited to standard hardware.

Bitcoin mining, as it is today, is done on specially designed supercomputers, which are found in places with rather cheap electricity and cheap cooling. These computers have a reputation of being rather expensive, costing millions of euros, but do also provide much more mining power than a typical standard PC hardware priced almost identically.

“With our contribution to Zcash, the Cryptography and Security lab (CryptoLux) has shown its strength in innovative research that has immediate applications in the financial technology industry,” says SnT´s director, Prof. Björn Ottersten. “We invite students to follow us in this promising field,” adds Professor Biryukov: “There are still lots of challenging research problems to solve.”