Ripple’s Xpring and the creators of ZCash have been connected to a joint investment into a cryptocurrency startup looking to take privacy tokens mainstream.
Bolt is a private, off-chain cryptocurrency being designed on top of the existing ZCash cryptocurrency, with a focus on handling the issue of scaling. Among the crowd of investors into the startup are Ripple’s fundraising division Xpring, Electric Coin Company–the firm behind ZCash–and ZCash’s founder Zooko WIlcox.
In a blog post detailing the new investment, Xpring explained that Bolt is exemplifying the new “layered” approach to cryptocurrency development. Similar to the layered protocol architecture of the internet, Bolt is apart of a growing collection of projects being built upon existing cryptocurrency framework–thereby allowing it to tack specific problems,
“Similar to the internet’s layered protocol architecture, we’re seeing an analogous stack emerge in crypto. Separate layers allow communities to focus on specific problem sets while still enabling interactions between layers for the discrete capabilities to build on each other. The design approach is iterative, with multiple branching paths to arrive at new solutions, versus a single monolithic system.”
The post continues to outline the workings of Bolt, claiming that the company is building a cryptocurrency payment channel that will utilize zero-knowledge proofs and blind signatures commitments. The ultimate goal for Bolt Labs and their currency in development is to bring scalability ot privacy focused coins such as ZCash. Xpring’s post also claims that the company is working on solutions that will make scalability a reality for public chain cryptocurrencies that do not offer privacy as a default capability, continuing that “The potential for these implementations to be networked together with technologies like Interledger opens the potential further for cross-chain interactions with these privacy guarantees baked in.”
Zooko Wilcox, founder of ZCash and CEO of Electric Coin Company, told Forbes in an interview that Bolt is a promising startup primarily for the added protection it offers users. The scaling solution being developed by Bolt Labs is reportedly similar to Bitcoin’s Lightning Network, with the ultimate goal making smaller transactions feasible in both cost and scalability. However, Bolt is looking to create a system that scales in addition to offering private transactions, similar to those offered through ZCash and other priva focused cryptocurrencies.
According to Wilcox,
“Bolt uses cryptography to conceal, from unauthorized parties, the information about which users are sending micropayments to which other users.”
Wilcox is under the belief that privacy cryptocurrencies, such as the technology being developed by Bolt Labs, are attractive to users for their increased safety and security. While anonymity may continue to be an attractive feature for certain individuals, Wilcox claims that privacy coins add a layer of assurance to online transactions,
“What matters to you is that you’re safe. This kind of technology is security technology. It just protects users so they can use these systems without fear.”
The ZCash founder went on to explain that privacy coins can offer users a way to transact in the digital space without the fear of identity theft and stolen information that comes with regular hacks.
If Bolt Labs ultimately proves successful, their scaling technology could have broad implications for cryptocurrency beyond the use of privacy coins.