Bitcoin Private (BTCP)

What Is Bitcoin Private (BTCP)?

Bitcoin private is a community-driven cryptocurrency that was created in March 2018 from a bitcoin and Zclassic hard fork. The founder and principal developer of Bitcoin private is Rhett Creighton, who is also the founder of Zclassic. 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.

Although Bitcoin private is still traded as of 2021, it trades at very low volumes. It is valued at $1.12 and its market capitalization is $5,359,697. According to CoinMarketCap, it is the 1,226th largest cryptocurrency.

Understanding Bitcoin Private (BTCP)

Instead of being a standard fork, the idea of Bitcoin private was to complete a "fork-merge" that would involve simultaneous forking away from the Bitcoin blockchain and instantly merging it with Zclassic (ZCL). The underlying process was has been described as "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, it 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 tokens remaining to be mined. The premined 20-million tokens were then to be airdropped into Bitcoin and Zclassic holders' wallets. The airdrop and fork-merge took place on February 28, 2018.

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 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. 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, in practice, because all transactions are public on the blockchain, 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.

Bitcoin private attempted to solve this problem by merging Bitcoin's protocol with Zclassic’s privacy-rich features.

Similar to Bitcoin, the total coin supply for Bitcoin private was intended to be capped at 21 million. The block reward was set at 1.5625 Bitcoin private, 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 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 capitalization, at around $550 million. As of 2021, it 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 pre-mined 96.6% of the total amount of tokens, with 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 was 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. The developers created a hard fork of Bitcoin private to fix the problem.

In March of 2019, BTCP was delisted from 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.

The Future of Bitcoin Private

Bitcoin private has been given an "F" rating on CoinMarketCap's Fundamental Crypto Asset Score. Bitcoin private's Twitter account is still active, as of April 2021. The latest Medium post, dated January 31st, 2020, says Bitcoin private was delisted by several of its remaining exchanges, and a shakeup of the organization's Treasury membership.