There are a lot of privacy coins currently on the market. All offering unique and supposedly revolutionary technology. Horizen (ZEN) is one of those.
This fork-of-a-fork cryptocurrency used to be called Zencash until a rebranding in 2018. However, this was much more than a rebranding. The Horizen team used it as an opportunity to reinvent the cryptocurrency with a whole host of features and improvements.
Yet, is it a privacy coin really worth considering?
In this Horizen review, I will attempt to answer that. I will also take an in-depth look at the long term prospects and use cases for the ZEN currency.
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What is Horizen?
Horizen is a privacy focused blockchain that is a fork of ZClassic which was itself a fork of Zcash. As such it is one of the privacy coins that makes use of Zcash’s ZK-snark technology. This highly advance privacy technology makes use of Zero Knowledge Proofs.
Benefits of Horizen Technology. Image via Horizen Website
The Horizen network has been created to encompass a variety of privacy-focused projects, which include:
- A decentralized autonomous organization;
- A private messenger (ZenChat);
- An anonymous publishing platform (ZenPub);
- A TOR-like domain fronting service (ZenHide.
In addition, there is the ZEN cryptocurrency, a full suite application called Sphere by Horizen, ZenNodes, and Horizen sidechains (currently in Alpha as of January 2020).
The Need for Privacy
While many people feel that security and privacy are topics that only pertain to criminals, conspiracy theorists, and the paranoid, the fact is in today’s world cybersecurity should be a major concern for everyone.
Cybersecurity experts at Norton estimate roughly 60 million Americans have had some impact on their lives and data due to identity theft, and that by 2023 half of all the data breaches in the world will be in the U.S.
Damage from Identity Theft in the USA. Image via Norton
Furthermore, it’s important for people to understand that it’s not your personal computer you need to worry about when it comes to hackers. The majority of hacking is at a far greater scale and impacts tens of thousands of people at a time, and in some cases up to millions.
We all have accounts with entities we trust with our data such as Google, Microsoft, Visa, Equifax, and even your national government. These are the places where hackers strike. And you can bet that these companies and governments follow stringent security measures to protect the data they hold.
There are even laws in place to ensure that’s the case, although it seems the penalties for allowing a data breach aren’t enough to encourage complete security, because data breaches are still common enough.
Horizon focuses on adding privacy for enterprise applications. That includes messaging and publishing, as well as private and secure data storage on the Horizen blockchain.
Horizen (or ZenCash at the time) did not hold an ICO, since ZEN was created as a fork of the ZClassic (ZCL) blockchain. That fork occurred on May 23, 2017 at block number 110,000 and ZEN was issued on a 1:1 basis to holders of ZCL.
Then, on the 22nd of August in 2018, the ZenCash team decided that a rebranding was in order. This was done in order to provide a springboard for much more than just a privacy coin – I will cover this in more detail below.
Two forks and a name change
ZEN uses the Equihash algorithm to achieve consensus and is a Proof-of-Work blockchain. The current block reward for ZEN is 7.5 ZEN, with blocks being mined roughly every 2 ½ minutes. Just like Bitcoin, the rewards are halved roughly every four years.
Unlike Bitcoin, the block rewards are not all for the miners. Instead, 70% goes to the miners, 20% is split evenly between Secure Nodes and Super Nodes, and the remaining 10% goes to the Horizen Team Treasury.
Secure nodes are what you might normally consider to be master nodes. They require the node owner to stake 42 ZEN. The Horizen secure nodes are unique in that they use node-to-node TLS encryption to secure all communications.
To ensure all transfers are secure the Horizen network uses both content distribution networks and Hypertext Transfer Protocol Secure (HTTPS). It has also inherited the same sk-SNARKS cryptography used by Zcash. These characteristics make ZEN transactions both anonymous and pseudonymous, giving ZEN users the highest levels of security and privacy in all their transactions.
Zero Knowledge Proofs Secure Privacy
There have been some criticisms regarding the Horizen project. These include the encrypted key generation event known as a “trusted setup” which could allow a bad actor to create unlimited ZEN coins if they were to compromise the process.
There are also rumors that the original code used to create Zcash may have had a “police backdoor” included, and that this backdoor has also made it to the Horizen implementation of the code, although there is no proof of such a backdoor for either Horizen or Zcash.
As mentioned above, Horizen is building out a full suite of tools that would add privacy for enterprise applications. The functions and products that have been developed so far are:
- ZenCash – ZEN is the cryptocurrency behind Horizen, and it was created to fulfill the original purpose of Zcash, which was to act as an anonymous financial tool.
- ZenPub – The laws in many countries can make publishing documents a risky business. Even so-called democracies can sometimes try to silence journalists. Horizen offers ZenPub to publish anonymously to IPFS, ensuring a free and unbiased press can always be maintained.
- ZenChat – Encrypted messaging is nothing new. Because our communications are always being monitored Horizen created ZenChat, which encrypts transactions on an end-to-end basis using AES-256 encryption.
- ZenHide – ZenHide uses domain fronting (similar to TOR) to circumvent censorship by hiding the remote endpoint of communications. It does this by using HTTPS to communicate with a forbidden host while appearing to communicate with some other host.
- ZenNodes – ZenNodes were created to help enforce the blockchain’s rules, and Horizen boasts one of the largest node networks in a multi-tiered node architecture. Horizen’s large and geographically dispersed node network improves the reliability, resilience, and speed of the network. There are three node types: Full Nodes, Secure Nodes, and Super Nodes.
- ZenDAO – The Horizen decentralized autonomous organization (DAO) is being created as a voting mechanism to allocate treasury funds to continue the development of the Horizen platform. It will eventually be one of the many sidechain applications on the blockchain.
- Sphere by Horizen – Sphere by Horizen is a multifunctional app that allows people to take control of their privacy and finances. It is a launching point for most Horizen services.
- Sidechains – Horizen sidechains are a scaling solution that will allow for the connection of a diversity of other blockchain implementations with their own consensus, network layer, wallet, history, and many other pieces.
The Horizen Team
The team behind Horizen has a strong background in cryptography, blockchain technology, finance, and business development. It is this strong background and the desire to create a system that allows individuals to maintain their privacy and liberty that’s helped make Horizen such a successful project.
The leader of the team, and co-founder of ZenCash is Rob Viglione. Rob is a former physicist and mathematician with experience working on Bitshares, BlockPay, Zclassic, Seasteading, and Bitgate.
He’s currently a PhD Candidate in Finance researching cryptofinance and teaching “Bitcoin & Blockchain Applications in Finance. Rob holds an MBA in Finance & Marketing and the PMP certification. He is a passionate libertarian who advocates peace, freedom, and respect for individual life.
Horizen Team. From left: Rob Viglione, Rolf Verslius and Rowan Stone
Rob is joined by co-founder Rolf Verslius who has the role of an executive advisor to the project. With prior experience at Cisco systems, the semiconductor industry, and as a nuclear trained officer in the US Submarine force, Rolf brings leadership, management, and technical operational expertise to the Zen organization.
We’d also like to mention the Business Development Director for Horizen, Rowan Stone. Rowan is an experienced leader with 15+ years of experience in strategic business development, sales, procurement, and commercial management, spanning the oil and gas, IT, and blockchain industries.
Previously, he founded a mid-sized cryptocurrency mining operation in Scotland, which is what led him to Horizen back in 2017. He’s passionate about solving problems with technology, and is working hard to bring Horizen’s tech’ to the masses! In addition, he was kind enough to let us interview him about the transition from ZenCash to Horizen.
The Horizen Community
With its long history stretching back to ZenCash it shouldn’t be too surprising that Horizen has a solid and diverse community behind it. Over at Twitter, there are over 46,000 followers, and the Facebook page has over 8,400 followers.
The subreddit for the project is just shy of 3,000 readers, which isn’t the biggest Reddit following, but it is a strong one, with regular updates being posted and multiple comments on each posting. Telegram was a bit more discouraging with just under 1,700 members.
Horizen Community Growth in 2019
Finally, we were pleasantly surprised with the YouTube channel of Horizen. Many cryptocurrency projects either ignore YouTube, or have a channel without much good content.
Horizen has over 130 videos going back 2 years, and they continue to be active on the platform. They also have over 8,000 subscribers, which is pretty darn good for a blockchain project on YouTube.
ZEN Price History
As mentioned earlier there was no ICO for ZEN since it was created as a fork from ZClassic. There is a total supply of 21 million ZEN, just like Bitcoin, and as of January 2020, the circulating supply is just over 8.15 million coins.
ZEN is currently ranked #58 by market cap, and it was unusual in that it held up pretty well during the 2018 bear market. The price bottomed out in mid-2019 and has been trending higher since October 2019.
ZEN Price Performance. Image via CMC
The all-time high was $67.29 set on January 10, 2018 and the all-time low was $3.09 set on July 31, 2017 which was just two months after ZEN started trading. The coin did come very close to that all-time low recently, however, touching $3.14 in September 2019.
Trading & Storing ZEN
You can purchase ZEN at over a dozen different exchanges, with the largest volume being exchanged at Binance. There is also a good amount of volume changing hands at DragonEx, TOKOK, Huobi Global, and Bittrex. If you don’t want to buy ZEN, but still want a small amount you can get it from the ZEN Daily Faucet.
Taking a bit of a closer look into the liquidity on the exchanges, the only one that has any real liquidity appears to be Binance. Having said that, the bid-ask spread is quite wide and the order books don’t appear to be too deep. Hence, you should exercise caution when placing large block orders on the exchange.
Once you have your ZEN, you will want to find a secure place to store them. We all know the risks that come from storing cryptocurrency on a centralised exchange. Horizen recommends storing your ZEN in their official Sphere wallet, but there are plenty of other options, from desktop to mobile, paper to hardware. A list of supported wallets is available here.
Your best option for holding your ZEN securely has to be that of a hardware wallet. ZEN is supported on both the Ledger Nano and Ledger X devices. You can also store it on the Trezor Hardware device but in this case you would need to buy the model T.
Development & Growth
Although Horizen has rebranded and laid out its renewed vision, one has to ask whether this has been translated into actual development output. One of the best ways to determine this is through their open source code bases.
Given that Horizen is open source, we can dive into their GitHub to get a sense of how much code is being pushed. Below is the total code commits to three of the top repostories over the past year.
Code commits to select repos in past 12 months
As you can see the project has been quite busy with a steady stream of commits. It is also worth pointing out that there are a further 53 other repositories but they have less commits than the others. The total development activity is about in line with the other projects that we have covered.
The project has not only been pushing out its development updates but the network has also been growing. For example, in 2019 you had a 49% growth in both the super nodes and the secure nodes.
Growth in Network at Horizen. Image via Horizen Blog
This is great as it means that the more nodes there are on the network, the more secure and distributed the network becomes.
In terms of the upcoming roadmap, they don’t appear to have updated it for 2020. However, there are a few things that were due to have been pushed in Q4 of 2019 that have still not been released yet. These include the following:
- Zen 3.0
- Begin the DAG (Directed Acyclic Graph) design
- Treasury Sidechain
- Sidechain SDK
It will be interesting to see whether the Horizen team can push any of these updates in the new year. Of course one of the most important here is the release of their third version of the core software. If you want to keep up with the latest on the development then you can visit their official blog.
Horizen has made itself stand out from the crowd of privacy coins by getting away from the focus on basic anonymity and privacy. The full suite of tools being offered by Horizen appeals not only to individuals, but also to enterprise users, and that could be the key to ZEN adoption.
The main criticism of ZEN is that it uses the same Zerocash protocol that was developed for ZCash, and there are rumors of a backdoor in the code that would basically eliminate any privacy for the coin and blockchain.
But Horizen has a lot going for it, from the ZenPub and ZenChat applications, to the development of sidechains that will allow for the hosting of any dApp or blockchain right alongside ZEN.
With these pieces in place, and with the coming launch of ZenDAO, Horizen has positioned itself well to become a sustainable blockchain ecosystem. The tools being developed are suited to the enterprise user.
This is because Horizen understands that enterprise users tend to remain loyal to a technology once it’s adopted, and enterprise users often have the ability to pay well for long periods of time.
The piece needed now is the delivery of an SDK, which will allow for the rapid spread of ZEN and the Horizen network.
Featured Image via Shutterstock