XCurrency is set to launch its eagerly awaited Rev 2 technology this week which will allow nodes to earn revenue for trustless mixing of transactions. The new technology, Xmixer, will enable the boosting of network security, scale up the processing of private transactions and provide revenue streams for users of XC.
To understand why this is a “killer-app”, it is necessary to understand what is meant by coinjoin. Coinjoin is a protocol that enhances the security and privacy of transactions by enabling users to build shared transactions that prevents unscrupulous individuals from tracing all transaction activity on the block chain or another public ledger with little effort. Coinjoin depends on supernodes to get this done. However, a determined investigator would be able to trace transactions by correlating them, compromising security and privacy as well.
XCurrency’s Rev 2 takes it a step further. XC is fully decentralized and therefore does not use nodes as many coinjoin projects do. Instead, they have levels of privacy. It is possible to conceal the amount sent, the sender’s and receiver’s address, and even the receiving address from the sender. You can even hide the user’s IP address as well, and the sweetener comes in the form of remuneration opportunities which make it possible for XC to achieve true privacy without compromising security.
Trustless Mixing – A Background
On July 7th 2014, XCurrency introduced the concept of trustless mixing. Trustless mixing means that a third party would be able to forward information on one’s behalf without being required to trust the third party. There are many third parties on the XC trustless mixing protocol, and as such it is possible that any of the third parties could receive or not receive coins, with very low risk of stealing them since they have no idea of the final address of those coins.
This is because the XC protocol relies on what is called multipath fragmentation. In multipath fragmentation, the record of the link between sender and receiver is removed. In addition, transactions are broken into fragments, which are then sent to different third parties for forwarding. Neither the amounts nor addresses are provided. The transactions are broadcast in much the same way as normal transactions, and there is no way of knowing if an amount is the whole amount, or whether it has been sent or is merely being forwarded.
Rev 2’s Trustless Mixing
After having successfully implemented the Rev 2’s trustless mixing on July 7th 2014, there was a need to scale it up so as to handle real-world transactions, exchanges and a number of blockchain applications. The implementation of trustless mixing has raised some concerns.
The first concern was that there would be a lack of enough nodes that would be making payments at a given time, thereby causing transactions to be queued for too long or dropped altogether. The second concern was that even when there would be enough nodes to handle the transactions with trustless mixing, their combined balances might be too small to forwarding all the fragments of a very large transaction.
Introducing the Xmixer
To address these concerns, XC has developed a new feature known as the Xmixer. The Xmixer will be available on all XC apps. This feature employs the same protocol as Privacy Mode, except that it collects portions of the transaction fees as remuneration. In order to take advantage of this, a user would simply have to create a dedicated wallet which would run an Xmixer. To ensure that Xmixers have enough coins to handle transaction volumes, a minimum amount of 1,000 XC must be held in the wallet.
XCurrency Bypasses Centralization
As more users set up Xmixers, the XC price might experience may end up rising more. This is because XCurrency intentionally creates buy-pressure by requiring a minimum balance of 1,000 XC. Unlike other coins that have master nodes and super nodes mixing transactions, every XCurrency node whether mixer or regular app, participates equally in private transactions and uses trustless mixing to forward transaction fragments. With Xmixers, this capacity is extended to times when the user is not transacting. In addition, Xmixers are user-friendly and do not require advanced setup and configurations for them to work. Finally, XCurrency has announced a yet-to-be disclosed “coinjoin killer” feature that is geared toward improving the privacy of cryptocurrency transactions.
Disclosure: The writer has no investments in XCurrency. Readers are advised to conduct their own due diligence before investing in any cryptocurrency. CCN accepts no liability whatsoever for losses incurred as a result of anything written in this article.
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