The Birth of ZenCash
It started almost by accident. Rob Viglione, the co-founder of Horizen, was finishing his Ph.D. at the University of South Carolina, teaching a blockchain course, and working at ZClassic as a part-time hobby. ZClassic had a really informal team, but Rob was passionate about this project. He gradually increased his commitment and activity in the community and took on a leadership role as the project developed.
Rob met Rolf Versluis while working collaboratively on ZClassic. They both loved the ZClassic project, but they had a vision for what the future of privacy, governance, and economics could look like. They learned of one another’s shared visions through working together on the project. So they decided to meet one day. Rob invited Rolf, who lived in Georgia, to give a lecture to his university students and to sit down to discuss the prospects of their collaboration.
ZClassic was a community project. While Rob and Rolf had good ideas, they did not have the mandate to expand the scope of the ZClassic project fundamentally. Rob and Rolf decided to fork ZClassic into their own project due to these limitations. They chose ZClassic because they were both believers in everyone’s right to privacy. Rob’s love of zero knowledge cryptography and their combined passion for privacy promised to be an enormous leap towards true privacy in the cryptocurrency world.
Rob and Rolf forked ZClassic and co-founded ZenCash. They were finally able to begin pursuing their goals. They began implementing their ideas for governance, economics, treasury, and privacy on a network level. On May 19, 2017, at the block height of 110000 of the ZClassic blockchain, they took the snapshot needed to enter the final phase of their launch. ZenCash blockchain was born on May 30, 2017, 23:46:46 UTC.
On the more technical side, this is the block #110000 that Rob and Rolf forked from. ZenCash began their new blockchain with a treasury model on block #110001. Note the 1.0625 ZEN emission in the coinbase transaction, which is the part of new coin emission that went to the treasury.
From a Part-time Hobby to a Full-Time Job
Rob intended ZenCash to be a part-time job. He couldn’t have known what would happen. A week after the official launch of ZenCash a former lead developer announced a zero-day attack. The developer shared a method of attacking the Zen blockchain publicly. This attack could lead to a transaction replay from the ZClassic blockchain to the Zen blockchain.
The minds at ZenCash were quick to act. Cronic, the Horizen Infrastructure Manager, was instrumental in the success of our project. Cronic and the ZenCash developers designed and deployed a method that prevented zero-day attacks. The support from Bittrex and Team Veritas helped out during this period. Rob and Rolf provided two updates daily to the community while the transaction replays were happening until the problem was solved.
Over time, all users who lost funds from the replays were repaid from Community Funds. Rob realized that working part-time wouldn’t be enough. He gave up on finishing his Ph.D. and began working on the project full-time. They deployed the preventative measure on June 12, 2017, at block height 117000. Paving the way for the future successes of the project.
During these early days, Rosario and others took their leading roles to help the community and first partnerships began to form. ZenCash engaged Tatiana Moroz and Crypto Media Hub for marketing.
The Supper of Lisbon
The initial Horizen team was not selected. It emerged from volunteers who displayed commitment and passion for the project.
Community developers were important during 2017. They added important tools, like Insight API by anarch3, NodeJS ZenChat and Zen Android wallet by Kendricktan, Arizen wallet by Lukas, and Swing Wallet by Vaklinov. They were also able to identify and fix issues with the mining pool software thanks to Hellcatz.
January 2018 marks an important date for ZenCash, now Horizen. The leadership team formalized for the first time during the IOHK conference in Lisbon, Portugal. Rob, Rosario, Rowan (Director of Business Development), Gustavo (User Experience Director) and Alberto (Director of R&D) gathered in the Airbnb they rented as a temporary office. They discussed and evaluated the performance of the volunteers who received stipends. They selected the most active and highest performing volunteers and offered them positions within the team. They officially welcomed several new members to the Zen Blockchain Foundation that month.
Sustainable Funding Model
Volunteers will contribute if a project is interesting but you don’t always attract professionals. Rob and Rolf learned this during their work at ZClassic. They did not have the funds to offer salaries because ZenCash did not offer a premine or an ICO. So the co-founders of ZenCash added an economic model into the project’s protocol. The model diverted part of the newly generated coins to the treasury fund allowing ZenCash to pay salaries, attract talent, and finance the project.
Incentives for Nodes and Other Stakeholders
As the economic model was implemented into the protocol, the team was able to begin offering incentives. They determined that part of the newly generated coins would go to the Secure Node operators who operated full nodes on the ZEN blockchain. These operators used powerful hardware, a dedicated IP address, and a TLS certificate to encrypt communications.
The incentive for doing this was 3.5% of the block reward in the beginning but increased to 10% with the introduction of Super Nodes. Our decision to incentivize node operators has resulted in Horizen having the largest full node network in the industry. The project has over 42,000 Secure Nodes and over 4,300 Super Nodes across the globe.
We are moving in the right direction as a project, but we are not done. We have dedicated ourselves to continuously identifying stakeholders who deserve incentive. For example, the contributors to the ZenDAO system will receive an incentive for participating in the voting process.
Super Nodes will host Horizen's upcoming sidechains, making them the first fully decentralized sidechains in the industry.
Cooperation with IOHK, Code Particle, InfoPulse
Cooperation with IOHK began with a personal friendship with Charles Hoskinson (Strategic Adviser of Horizen) and a shared belief in personal freedom and privacy. Charles read the ZenCash whitepaper and reached out to Rob. They met in New York City to discuss the Horizen Project and IOHK. They also planned for a collaboration between the projects. The collaboration resulted in great contributions and a lot of complementary R&D between Horizen and IOHK.
Horizen and IOHK have created many wonderful projects together. The collaboration resulted in our scaling research (BlockDAG), Dandelion++ (a network anonymity protocol), and the Horizen Sidechains.
One of the biggest projects that Horizen is working on with IOHK is the treasury voting system. IOHK brought the project to Horizen. Together we built upon and improved it, adding zero knowledge cryptography for secret ballot voting and more.
We have met many of our partners through Charles. He introduced us to InfoPulse, who helped us with the Ledger, Trezor, and OpenBazaar integrations coding and they are developing the Horizen sidechains SDK.
Code Particle is another noteworthy partner who works on development for the flagship app, Sphere by Horizen. They also provide core developer support for the Horizen zend - our core protocol software. Pier Stabilini (A lead engineer for Code Particle) works closely with our team and has contributed considerably to the project’s success.
The 51% Attack and a Solution to It
Although the 51% attack was a great shock for the Horizen team and community it did not come out of the blue. The whole industry was aware of a blog that stated the cost of 51% attacks against many projects. The Horizen team began disaster planning and brainstorming shortly after learning the cost to attack was low. We set up a tripwire system as part of the plan that would alert us if it detected a significant net-hash increase, and we put our tech team on a standby monitoring the network.
The Zen network was the target of a 51% attack on June 3, 2018, at approximately 00:26 UTC between blocks 318165 and 318275. The attacker(s) caused multiple reorganizations of the blockchain, reverting 38 blocks in the longest reorganization. The attack successfully created three double spend transactions of 3317.4, 6,600, and 13,234.9 ZEN.
The Horizen team knew about it immediately thanks to the tripwire system. The team began executing the mitigation procedures they had been working on to significantly increase the difficulty of future attacks. Because our engineering team was already working on possible solutions for 51% attack, we did the POC and coding quickly and proceeded with the network upgrade.
We determined the best solution was to enhance the longest chain rule (Nakamoto Consensus) and introduce a penalty for delayed block reporting. This makes it exponentially more difficult and costly for those looking to perform a 51% attack. You can read our Solution to 51% Attacks whitepaper.
Brand Expansion - from ZenCash to Horizen
As our project grew bigger and more popular we were getting confused with ZCash more often. It started making more sense for us to rebrand. Our project focused on product offerings like a treasury voting system and sidechains with smart contracting capability. We were more than our currency. The word “cash” in our name didn’t describe what our project had started to become.
The last push we needed to kick start our brand expansion came in the form of a letter from a large international bank. In the letter, they expressed that the ZenCash logo was similar to their sister organization one, and they requested we change ours. It didn’t make sense to fight over a branding that didn’t fit us anymore.
So, we created a special task force and partnered with BrandTuitive. Our teams combined and spent hours upon hours working on our brand expansion. The result was, and still is, phenomenal. The name Horizen aligned perfectly with the mission and goals of our project. The team and our community loved that we were able to keep ZEN as part of our name. Since ZEN remained a part of us we were also able to maintain our cryptocurrency’s ticker symbol, ZEN.
Horizen to the Future
This brings us to the present. We have had our ups and downs in these last five years. We have not only survived, we have grown stronger, antifragile, and we dedicate ourselves to growing every day.