The Zerocash merkle tree bitcoin value is being developed into a full-fledged digital currency, Zcash. How Zerocash works Zerocash is a protocol that provides a decentralized crypto-currency in which, as in Bitcoin, users collaborate to maintain the currency by broadcasting and verifying payment transactions.
Zerocash, however, differs from Bitcoin in how these payment transactions are assembled and then verified. Concretely, in Bitcoin, a payment transaction consists of an origin address, destination address, and payment amount. These transactions are bundled into blocks and stored on a decentralized ledger called block chain. Zerocash extends Bitcoin’s protocol by adding new types of transactions that provide a separate privacy-preserving currency, in which transactions reveal neither the payment’s origin, destination, or amount. Zerocash coins, which we call zerocoins. Zerocash transactions Zerocash’s functionality is realized using just two new types of transactions: mint transactions and pour transactions.
Like Bitcoin transactions, Zerocash transactions are broadcast and appended to a decentralized ledger. Individual Zerocash nodes maintain a Merkle tree over all of the coin commitments seen thus far. Any user can then demonstrate ownership of a coin commitment, via its decommitted values as well as a short witness of membership in the tree. The pour transaction consumes the input coins by revealing their serial numbers, but does not reveal any other information such as the values of the input or output coins, or the addresses of their owners. Verifying Zerocash transactions For a mint transaction, the commitment contained therein is constructed so that that anyone can verify that the committed coin has the claimed value. More details See our technical paper! To standardize this introspective functionality, the Ethereum protocol comes with something called the application binary interface, otherwise known as the Contract ABI.