Bitcoin Private (BTCP)

What Is Bitcoin Private (BTCP)?

Bitcoin Private is a community-driven cryptocurrency created in March 2018 from a Bitcoin (BTC) and ZClassic (ZCL) hard fork. The founder and principal developer was Rhett Creighton, who also founded ZClassic. The ultimate aim behind launching Bitcoin Private was to combine the inherent privacy-rich features of ZClassic with the flexibility, security, and popularity of Bitcoin.

Understanding Bitcoin Private (BTCP)

Instead of being a standard blockchain fork, the idea behind Bitcoin Private was to complete a "fork-merge" that would involve the simultaneous forking of the Bitcoin blockchain and merge with Zclassic blockchain.

The underlying process has been described as "a hard fork of ZClassic, which combines the unspent transaction outputs (UTXO) 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, the merged blockchain was meant to support two 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. However, the shielded transactions encrypt these details into a special block section, making them verifiable but hard for third parties to decipher.

This operation was intended to create a new set of 20.3 million coins, keeping 700,000 for mining. The pre-mined 20.3 million tokens were then airdropped—sent to Bitcoin and ZClassic holders' wallets to incentivize the cryptocurrency owners to switch to BTCP.

How Is Bitcoin Private Different from Bitcoin?

As Bitcoin gained popularity in the middle of the 2010s, its fixed, small block size and slow block times led to speed, cost, and energy consumption issues. 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 Bitcoin's decentralization ethos into question. Mining power became concentrated around a few professional mining companies and mining pools. Innovations in blockchain technology, including the Equihash proof-of-work (PoW) algorithm, were developed to deal with this problem by limiting the cost-performance tradeoffs of ASIC-based mining systems.

Although Bitcoin was intended to allow users to maintain anonymity, it is possible to trace transactions. What's more, combined with other sources of pseudonymous data, it is possible to identify a person with their Bitcoin public key.

Similar to Bitcoin, the total coin supply for Bitcoin Private was intended to be capped at 21 million. The block reward was set intially at 1.5625 BTCP, with a block time of 2.5 minutes and a block size of 2 MB. Bitcoin Private uses the zk-SNARKs privacy protocol and the Equihash algorithm, which offers a GPU-friendly proof of work algorithm for mining.

Goals of Bitcoin Private

Like many ideas circulating 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 ranked in the top 50 coins in market capitalization, at around $550 million. However, as of February 2022, it is not listed on exchanges.

Bitcoin Private raised several red flags from its inception: it pre-mined 96.6% of the total coins, leaving only 3.4% remaining as a mining reward. It also sought to piggyback on the reputation and adoption of Bitcoin rather than growing its user base organically.

At the end of 2018, less than a year after Bitcoin Private launched, the principles published an article on Medium, explaining that a "bad actor exploited a vulnerability in the BTCP fork mine code." This created as many as 1.7 million illegitimate "shielded" coins. As a result, the developers created a hard fork to fix the problem.

The Future of Bitcoin Private

Bitcoin Private's Twitter account is still active. On Feb. 8, 2022, developers announced the purchase of a private server to help eliminate storage and development costs.

In its latest Medium post, dated June 16, 2021, Bitcoin Private claims that a new chain—built by one contributor—will be revealed. It remains to be seen when and if Bitcoin Private will become a contender in the cryptocurrency arena.

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