The document presents a seminar on Zerocoin, an anonymous cryptocurrency protocol. It begins with an introduction to basic concepts of money and digital cash systems. It then discusses Bitcoin, defining it, how it works, advantages, disadvantages and applications. It introduces Zerocoin as an extension of Bitcoin that aims to provide anonymity by allowing users to convert bitcoin to zerocoins and back anonymously using zero-knowledge proofs. The presentation covers Zerocoin's protocol, comparison to Bitcoin, and potential future applications.

1. Presentation On:
ZEROCOIN
Anonymous Distributed E-Cash from Bitcoin.

2. Department of Information Technology
By
NAVGIRE SAGAR P.
3651
Seminar Guide: Prof. NAMAN BURADKAR
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ZEROCOIN

3. 1. Basic Concepts.
2. Bitcoin : Definition, Working, Advantages,
Disadvantages and Applications.
3. Laundry Services.
4. Zerocoin : Definition, Working, Protocol Overview,
Comparison and Future Scope.
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4. • Any object or record that is generally accepted
as payment for goods and services and repayment
of debts in a given socio-economic context or country.
• A medium of exchange; A unit of account.
• A standard of deferred payment.
• Desired Properties:
1. Limited Supply.
2. Widely Accepted.
3. Easier to transfer from one account to another
account.
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5. • NOTE: It is a piece of paper with certain amount written on it
and a probably a serial number written on it.
• COIN: It is a piece of metal, mostly circular in shape with
certain amount depicted on it.
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6. • It is a file having some code or sequence of number.
• This file is transferable from one network to another network.
• Examples: Paypal, Google Wallet, etc.
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7. • A third party maintains a database of various accounts and
for transactions, simply deduct money from one account
and add to another account.
• They get paid for providing services.
• Example : Bank System.
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8. • Trusted parties required to operate.
• Centralization and Trust.
• Money can be stolen. (Robbery)
• Bank can go out of business. (Bankrupt)
• Privacy issue. (Your data can be sold)
• Your account can be seized.
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ZEROCOIN

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10. • Proposed by Satoshi Nakamoto in 2008.
• Provides an effective and verifiable currency transfers &
creation in a decentralized peer to peer setting.
• Combination of b-money and bit gold.
• Practically implemented as a software called bitcoind.
• A real system with a $100 billion market capitalization.
• Daily transactions worth $2 - $5 billion USD.
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11. • No third party interference.
• Worldwide coverage.
• Null or low transaction fees.
• No upper limits on transfer amounts.
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12. • Online Shopping.
• Web design and development.
• Servers.
• Cafes, Restaurants, Bars and Lodgings Hotels.
• Medical, Legal and Educational Services.
• Wellness & Fitness.
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13. http://usebitcoins.info/
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14. preev.com
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15. • Normal Approach.
To: ALICE
Bob
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BOB
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ALICE
ZEROCOIN

16. • Replacements :
1. Account Holders Name => Users Public Key.
2. Handwritten Signature => Digital Signature.
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17. • Bitcoin Approach.
BOB
ALICE
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18. • If copy of same cheque is given to many people.
• Copy of Same Bitcoin is transferred to more than one peer.
• Result: 1. Infinite amount of bitcoins.
2. Currency losing its value.
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19. • Distributed consensus approach.
• Instead of having a central DB, it divides the DB into small
parties in the peer to peer network and replicate the same
information in all nodes.
• The database will contain information about all the transactions.
• Users can check if the coin has already been spent.
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20. • The DB is divided into small parts called Blocks of many
transactions.
• These blocks are connected through HASH CHAINING.
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21. • It is the append-only chain of blocks.
• The ability to add blocks to the chain is distributed among
the nodes.
• These nodes are called as MINERS.
• They compete with each other by doing some computational
work called as PROOF OF WORK (PoW).
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22. • Miners get some reward for winning the PoW on a given block.
• They can also receive some transaction fee.
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23. • Block chain, which is the history of all the Bitcoin
transactions, is publicly available.
• The Block chain is traceable.
• Information can be leaked.
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25. • Bitcoins of many peers are mixed randomly together and
returned back.
• Trail goes DEAD and the peers cant be identified.
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26. • Trusted parties are required for Laundry operations.
• No assurance that your money will be returned.
• They are to be trusted blindly.
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28. • Proposed by Matthew Green of John Hopkins University.
• Protocol that extends BTC by adding decentralized
laundry.
• Requires a trusted, append only block chain, which
bitcoin provides for free.
• Zerocoin is just the information.
• Information in the form of randomly generated large
numbers.
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29. • A Zerocoin is a randomly generated large number.
• It gains its value once it is put on the block chain.
• Eg: 1zerocoin = 1BTC.
• It also contains a digital commitment acts as a security lock.
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30. • Zerocoins can be redeemed back into Bitcoins.
• 2 things the receiver needs to know :
1. Knowledge about the zerocoin existence.
2. Knowledge about the commitment that causes it to open.
• Concept of Zero Knowledge Proof is used.
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31. • Invented by Benaloh and De Mare.
• Based on RSA Algorithm.
• Encryption key is made public, whereas Decryption key
is kept secret.
• To accumulate primes C1, C2, ….,Cn compute:
A = U^(c1.c2…..cn)
wi = U^(c1.c2.ci-1...ci+1…cn)
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32. • Generate a random serial number S. Compute:
C = g^S.h^r ( C is prime )
• Retain S, commitment randomness r.
• Accumulate all valid coins, compute witness wi.
• Reveal S, prove knowledge of accumulator witness wi
and commitment r.
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35. • Zerocoin can be merged into Bitcoin at protocol level.
• Bitcoin.org not interested.
• New Beta – Bitcoin to be launched !
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36. [01] Zerocoin: Anonymous Distributed E-Cash from Bitcoin. Ian Miers,
Christina Garman, Matthew Green, Aviel D. Rubin. The Johns
Hopkins University Department of Computer Science, Baltimore,
USA
[02] S. Nakamoto, “Bitcoin: A peer-to-peer electronic cash system,
2009, ” 2012. [Online]. Available: http://www.bitcoin.org/
bitcoin.pdf
[03] S. Barber, X. Boyen, E. Shi, and E. Uzun, “Bitter to better – how to
make bitcoin a better currency,” in Financial Cryptography 2012,
vol. 7397 of LNCS, 2012, pp. 399–414.
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