Author: Peter Todd 2013-07-15 00:29:20
Published on: 2013-07-15T00:29:20+00:00
The concept of bi-directional sacrifice for Zerocoin is explained, where one way to create a Zerocoin is by proving that a Bitcoin was sacrificed in a specific way. When a Zerocoin is sold, a Zerocoin transaction is created with a txout that can only be spent if a Bitcoin transaction exists with specific conditions and sufficient confirmations. The seller has a fallback option if the buyer screws up. Zerocoins are gradually consumed by the proof-of-sacrifice needed for Zerocoin transactions. If Bitcoins are sacrificed permanently, it may result in long-term Bitcoin deflation, which could become an issue as the block reward decreases. However, if the process involves sacrificing Bitcoins to fees, there would only be a minor decrease in the Bitcoin money supply. Zerocoin needs consensus on the Bitcoin blockchain, but this is necessary to verify sacrifice proofs anyway.
Updated on: 2023-06-06T19:47:55.367281+00:00