Privacy has always been an ongoing concern in the crypto world, but Firo’s privacy protocol has found the solution by offering a flexible approach.
The inherent transparency of most blockchains, such as Bitcoin and Ethereum, allows all users to easily access the full transaction history of any address and track the movement of funds. This transparency has raised concerns that hinder adoption, as many individuals are reluctant to disclose their financial activities publicly. It also encourages problems such as miner extractable value (MEV), which exploits this transparency to manipulate and reorder transactions, ultimately imposing hidden costs on users.
Privacy protocols are essential for the mainstream adoption of Bitcoin by protecting user privacy. However, the integration of these protocols into major blockchains has been sluggish, primarily due to their complexity and heightened regulatory scrutiny, as evidenced by the delisting of privacy-focused cryptocurrencies from centralized exchanges (CEXs).
Balancing privacy, simplicity and accessibility
Privacy technologies like RingCT, Zerocash and Mimblewimble, as employed in Monero (XMR), Zcash (ZEC) and other privacy coins, have long served as the cornerstone of on-chain privacy. However, these protocols often exhibit drawbacks such as complexity, reliance on trust assumptions or the leakage of sensitive information.
Rather than simply adopting existing privacy protocols, Firo, formerly known as Zcoin, has pioneered the development of privacy protocols. It was the first to deploy Zerocoin, once one of the most widely used privacy protocols, and then developed Sigma and Lelantus, which inspired other privacy protocols such as Lelantus-MW in Beam and Triptych.
Enhanced privacy, flexibility and security
After years of diligent research, Firo is releasing the Lelantus Spark protocol onto its mainnet on Jan. 18, initially having launched it on the testnet in July 2023. The protocol empowers users to achieve high degrees of privacy, particularly compared to RingCT and Mimblewimble protocols.
While Spark also employs zero-knowledge proofs, it departs from the traditional circuit design approach by employing specialized zero-knowledge proofs in a modular construction that each conceals distinct aspects of the transaction. This architectural choice makes Spark simpler to formally verify, comprehend and enhance with future components.
Moreover, Spark eliminates the need for a trusted setup, a common drawback of many zk-SNARK constructions.
— Firo $FIRO (@firoorg) January 10, 2024
Firo’s work in Spark has influenced Seraphis, Monero’s next-generation privacy protocol that’s still in development and shares many design ideas. Firo’s team has also collaborated with Monero contributors to improve each other’s privacy protocols.
Additionally, Lelantus Spark significantly enhances privacy by hiding transaction amounts, sender identities and recipient information. The protocol uses Spark Addresses, a new addressing system that strengthens recipient privacy and supports efficient multisignature operations, empowering collaboration and secure transaction authorization. Lelantus Spark also allows users to grant third parties access to transaction details without compromising privacy by utilizing incoming and full view keys.
No limits to improvement and growth
Firo continues to improve the privacy capabilities of its ecosystem through curve tree research granting global anonymity sets, which would mean that every single private transaction forms part of the anonymity pool instead of just a subset.
It also has designed ways for Spark to support multi-assets through its Spark Assets technology, meaning that even the asset type being transacted is hidden. This will form a pillar of Firo’s upcoming privacy token layer called Elysium, which will allow others to create their own assets that inherit all the privacy benefits of Firo while contributing to every other asset’s privacy.
Firo’s unwavering commitment to research, development and community engagement will drive its privacy protocol to new heights.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain in this sponsored article, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.