Komodo Enters Race with Monero, Litecoin, and Bitcoin for Privacy
Litecoin (LTC) and Bitcoin (BTC) have already begun making moves to privacy with the testing and possible integration of Confidential Transactions (CT) in a move to grab some of Monero’s (XMR) benefits. Now Komodo is launching Jumblr, a unique way to give the user the option to be private. Jumblr allows the user to choose privacy or transparency all within a decentralized system without sending coins to the public blockchain.
Komodo is a fork of the popular privacy coin in Zcash and retains many of the privacy implementations from the original technology. Zcash parameters and zk-SNARK allow users to move currencies on a public blockchain without leaving a trace. You can read more about Jumblr via the Komodo whitepaper which was just updated late last week.
Current privacy technology such as Monero (XMR) utilizes a three part technology known as RingCT, anonymous wallet addresses and Confidential Transactions (CT) to keep the sender, receiver, and the amount completely private. This technology is quite good which is why the currency has been adopted by the nefarious alphabay as a chosen currency. The limitation to this is it requires users to send coins to the centralized network losing control of the coins while in this process. Komodo feels this, “the most dangerous issue, among many, is that for the duration of the mixing period users lose control over their currency. The funds, therefore, are subject to theft and human error.” Scary stuff. Litecoin and Bitcoin have begun testing CT and may add the feature in the future.
— $KMD (@KomodoPlatform) December 1, 2017
Jumblr itself relies on several aspects of the Komodo platform for what it feels is the ultimate privacy solution. It utilizes parts of the original Zcash zk-SNARK and Zcash parameters and adds Iguana, BarterDex, and any BarterDex connected coin with user commands to operate and make transparent coins anonymous.
How it Works
Jumblr works based on the user initiated command which can be implemented into any third party GUI. The simple version is the user initiates from a transparent wallet to command to randomize his/her funds. Barterdex, the decentralized exchange running on the users computer, allows the funds to move from the transparent wallet to an anonymous wallet. This initial movement leaves a data trail to the anonymous wallet.
To further separate the coins from the user, Jumblr then sends the coins to a second anonymous wallet breaking the link from the senders wallet. The coins are then held on this second wallet until the user initiates the command to send to another transparent wallet. This second transparent wallet is also anonymous but searchable by other users. Komodo refers to this second transparent address as the secret address in that it is no longer connected to the user and can be sent to other users.
Komodo acknowledges that the new secret address is only as private as the user allows. Example – assume an online retailer accepts Komodo. The KMD from the secret wallet is sent in return for a good or service that requires an address for shipping or delivery. If the address is connected to the sender then it could be linked to the user.
Additionally, the sending and receiving wallets are transparent and searchable. This means if a volume of coins goes in to Jumblr and immediately hits another transparent wallet it can be linked to the original wallet. Komodo refers to this as a “sleuth attack” and recommends randomizing how long the coins spend in the anonymous wallet. It would also be smart to use multiple secret addresses to prevent easily linking the sender and receiver.
Benefits to Komodo
Transactions = fees and in this case Jumblr is no different. The process automatically withdraws a 0.3% fee from the total coins sent into the Jumlbr action. Any coin connected to the BarterDex and Komodo platform can be sent into Jumblr with then offers privacy to many coins that otherwise would not have the feature available. More coins = more transacitons = more fees. In the end Komodo is still a business.
Komodo vs Monero vs Litecoin and Bitcoin
Monero is still the leader in online crypto currency privacy in that it was built from the ground up to be private and untraceable. With the acceptance of risk from sending coins to a centralized network for privacy in return for no transparent wallets, other coins will find it hard to unseat Monero from its perch. Litecoin (LTC) and Bitcoin (BTC) are playing catch-up and even if they add CT will still be far behind Komodo and Monero for private online transactions of cryptocurrency.