What is Bitcoin Private (BTCP)?
Though Bitcoin Private is still traded as of 2020, according to CoinMarketCap, it trades at very low volumes and its market cap is under $1 million making it the 1,315th largest cryptocurrency.
Understanding Bitcoin Private (BTCP)
Bitcoin Private (BTCP) was launched in March of 2018. Its founder and principle developer Rhett Creighton, who is also the founder of ZClassic, wanted to create a crypto currency with the privacy of Zcash and the prestige of Bitcoin.
Problems With Bitcoin Bitcoin Private Was Meant to Address
As Bitcoin gained popularity in the middle of the 2010s, its fixed, small block size and slow block times led to issues with speed, cost and energy consumption. Higher transaction volume led to higher fees and longer processing times resulting in backlogs. It became evident that one of Bitcoin's aspirations -- to be a unit of exchange -- was not feasible in its current state.
Additionally, the rise of power-hungry ASIC-based mining brought into question Bitcoin's decentralization ethos because mining power became concentrated around a few professional mining companies and mining pools. Innovations in blockchain technology, including the Equihash proof-of-work algorithm, were developed to deal with this problem by limiting the cost-performance tradeoffs of ASIC-based mining systems.
Though Bitcoin was intended to allow users to maintain anonymity, in practice, because all transactions are public on the blockchain, it is possible to trace transactions, and combined with other sources of pseudonymous data, it is possible to identify a person with their Bitcoin public key.
Bitcoin Private attempted to solve this problem by “merging” Bitcoin's protocol with ZClassic’s privacy-rich features. Essentially, the birth of Bitcoin Private that emerged was a result of a unique “fork-merge."
The Bitcoin Private Idea
Instead of being a standard fork, the idea of Bitcoin Private was a "fork-merge" which involved simultaneous forking away from the Bitcoin blockchain and instantly merging it with ZClassic (ZCL). The underlying process was has been described as a "a hard fork of ZClassic, which combines the UTXOs of ZClassic and Bitcoin into a new blockchain called Bitcoin Private. This means that the addresses and their Bitcoin amounts will be combined with ZClassic addresses and their amounts."
According to the Bitcoin Private whitepaper, Bitcoin Private was meant to support two transaction systems: transparent and shielded transactions. Like Bitcoin, the sources and destinations of all funds and amount values are securely and transparently stored on the blockchain. On the other hand, the shielded transactions encrypt such details into a special section of a block, making them verifiable but hard to decipher for third-parties.
This operation was intended to create a new set of 20,300,000 coins with 700,000 BTCP remaining to be mined. The premined twenty million BTCP were then to be airdropped into Bitcoin and ZClassic holders' wallets. The airdrop and fork-merge took place on February 28, 2018.
Similar to Bitcoin, the total coin supply for BTCP was intended to be capped at 21 million. The block reward was set at 1.5625 BTCP with a block time of 2.5 minutes and a block size of 2 MB. It uses the zk-SNARKs privacy protocol and the Equihash algorithm which offers a GPU-friendly proof of work algorithm for mining.
The ultimate aim behind launching Bitcoin Private was to combine the inherent privacy-rich features of the ZClassic cryptocurrency with the flexibility, security and popularity of Bitcoin.
Bitcoin Private History
Like many ideas circulating at the height of blockchain enthusiasm in 2017 and 2018, combining the security of Bitcoin with a way to make transactions private seemed like a good idea. When it launched, Bitcoin Private was ranked 46th in terms of market cap at around $550 million. As of 2020, BTCP is no longer listed on the HitBTC exchange or many of the smaller exchanges, some of which have gone out of business since it was listed.
Bitcoin Private raised several red flags from its inception: it premined 96.6 percent of the total amount of BTCP with only 3.4 percent remaining as a mining reward; it sought to piggyback on the reputation and adoption of Bitcoin rather than growing its user base organically; and regulatory pressure from governments seeking to crack down on anonymous crypto transactions meant organic adoption became harder to acquire.
At the end of 2018, less than a year after Bitcoin Private was launched, the principles published an article on Medium saying a "bad actor exploited a vulnerability in the BTCP fork mine code," which created as many as 1.7 million illegitimate "shielded" coins. The developers created a hard fork of BTCP to fix the problem.
In March of 2019, BTC was delisted on the HitBTC exchange under questionable circumstances. Transaction volumes, which had hovered around 80,000 per day at the beginning of the year, sank to below 10,000 per day.
Bitcoin Private's Tenuous Status
Bitcoin Private is given an "F" rating on CoinMarketCap's Fundamental Crypto Asset Score, and Is This Coin A Scam lists Bitcoin Private as quiet with little evidence of serious development in the last six months. The Bitcoin Private Dot-Org public-facing webpage is still active, but as of January 2021, is in maintenance mode.
Bitcoin Private's Twitter account is still active as of January 2021. The latest Medium post dated January 31st, 2020 says BTCP was delisted by several of its remaining exchanges, and a shakeup of the organization's Treasury membership. It concludes with a call for unity in the face of adversity:
As BTCP enters its second year of existence, it carries with it many important lessons that will serve extremely useful when it launches its new and improved chain. But for this new chain to succeed, the support of the BTCP community is crucial. Therefore, just as the veteran contributors have continued fighting for BTCP, we call on every member of the BTCP community to stay with us and continue the fight for financial privacy via the truly decentralized, community-driven and private cryptocurrency that is BTCP!