Hello everyone and welcome to another episode of Know The Coin with ChangeNOW! Today’s guest is Rowan Stone, director of business development in Horizen, formally known as ZenCash, who was very nice to sit down with our marketing manager Pauline and talked about why Horizen is such a great project!

Thank you very much for joining me today! The first question is our elevator pitch. Could you please tell me about yourself and your background? I know that you’ve come a long way from working in crypto non-related businesses to Horizen.

I’ve been in a mixture of business development, sales, commercial management. I live in Scotland, and we have one industry here – oil and gas industry. So I started off on a mechanical route and a variety of sales and business development and, to be honest, I hated the fact, that I was kind of responsible for destroying a planet. I am a big petrol-head, I love my cars and motorbikes, but by the same talking I’m not in love with the fact that we are destroying the environment. So, I was quite unhappy. I was successful, but it was not something fulfilling or something I enjoyed doing. At the same time, I was mining small amounts of Litecoin, and generally I have always enjoyed building PCs. It was late 2013, early 2014, something like that, and Litecoin prices were becoming higher, and I was like, “Oh, it’s pretty cool”. Being 5 or 6 in the beginning, my GPU count ended up being 50 or 60 and the entire operation got a little bit too big to be in a spare room, so I moved it to my garage. It escalated, since when you come to this industry, it is really easy to become infected by it. Leave and breathe nothing but it. So, I set up a small mining business here in Scotland, and and it grew up enough for me to be able to quit my day job. At that point I came across Horizen as a project, loved what the guys were doing, loved that they stood for, their vision. I jumped in to be a sort of a mining community creator here in the UK, became more permanent, and now I am a Director of Business Development.

So, if I understood you correctly, you are not involved with your mining business anymore?

I was running it for quite a long time, but then I realized I just didn’t have enough time to manage it properly. Mining equipment is subject to crushes and all sorts of things, and I just realized I was not on the top of the things I was doing. So, I decided to focus on Horizen. I loved doing that, but now my passion and my desire is to push Horizen.

How would you explain Horizen to a crypto beginner?

Horizen is a cryptocurrency in a similar sense to Bitcoin – it is a digital representation of cash that doesn’t require an intermediary to transact. That’s a real special source with a lot of different cryptocurrency projects. At the early stages, the main differentiation was that when you transact Bitcoin, everyone can see the full ledger, it’s public. The address A, address B, the details – everything can be seen by an intermediary. And with ZEN you have a choice – you can send it in a Bitcoin-like way or to through a shielded transaction. A shielded transaction is a little bit different to a standard. There is a time stamp, so you can check that a transaction has happened, and both wallets can prove that they are rightful owners – so a transaction is valid. But what they won’t share with the rest of the world is who the sender and receiver are and what the amount is. This is an optional privacy feature.

When did the idea of Horizen emerge and who was the initiator?

Two founders of Horizen are Rob Viglione and Rolf Versluis. The original idea kicked off in late 2016, the team was created in early 2017, and the chainsplit happened in late 2017.

But what actually split from what?

Horizen was a chainsplit from ZenClassic. And the reason they picked ZenClassic is that they wanted to have this optional privacy feature. ZenClassic have a library which originally came from ZenCash.

So, first there was Bitcoin, and then ZenCash that forked from Bitcoin, then came ZenClassic and then came Horizen. Right?

Absolutely correct.

Great. I would also like to talk about ZenCash and rebranding. Everyone who knows something about business knows that rebranding is a complicated thing, if you want it to be done right. What was the process like for Horizen? And why exactly did it happen?

You’re right, it is a hugely complicated process. The initial mission of Horizen was to make this underlying currency, ZEN, to be as useful and as accessible. The original idea was to build apps and products and services on the foundation of this optional privacy technology. To do that you need a solid underlying infrastructure, so we need people to set up nodes. Then, we realized that the name ZenCash was quite limiting, because when people hear “cash”, they think in terms of money, and that’s great – ZEN is a currency, it is certainly a good medium of exchange, but it is not we were trying to achieve, because we were aiming to build a technology platform. Kind of broaden up our horizons, if you would like. So, we decided to look completely fresh – new logo, new name, whole new identity, a new direction for a project to take.

Let’s talk about the entire Horizen ecosystem. I know you have a huge pool of platforms and apps. Could you tell me about the most notable of them?

Sure. We are now kind of flipping from stage 2, which was building infrastructure. And stage 3 is development of a top-platform, that is going to be on top of this infrastructure. It is a kind of a software layer which makes is easy to use it and also to develop on top of it. That’s what we are at now. We also have several, so to say, apps of our own – wallets, messengers etc. — and they are built on the same principle of anonymity, but they are not the key target, the target is an ecosystem.

This is amazing – as of today, we have very few clients that allow for completely anonymous transfer of information.

We really want to try to get to the point where we can help people to communicate in a kind of ultimate privacy.

Do you allow absolute freedom of speech for everyone, regarding their political views or background? Are there any people whom you would refuse your service as a gateway to privacy? I know that Horizen as an ecosystem doesn’t endorse crime, people of questionable policies, so can you just refuse someone to use your platform for communication?

That’s not a really hard question to answer. We certainly don’t believe in censorship, but we don’t want our product to be involved into any malicious intention, breaking laws. We still obey the international and the US law, as we are a non-profit organisation based in the US. So, we are by no means going to push for anybody to use our services in any way that breaks any international law. Besides, it’s very important for us to promote privacy for the right reasons. What we are trying to do is to restore a person’s ability to control their personal data, rather than provide people with perfect avenues to crime.

Let’s shift to privacy. I know that where are a lot of privacy oriented projects now, but how is Horizen different from ZCash, ZCoin, or ZClassic?

R: The most asked question is what’s difference is between ZenCash and Monero, I’ll answer if first. Monero use a kind of mixer to achieve obscurity, and it works very well, and of their transactions are private. Our community, however, believes in having a transaction either openly or privately. It is important in many different use cases. We are transparent by default. Privacy in Horizen is an option. When you are comparing ZEN to other Z-based currencies, the fundamental technology is very similar — ZCash are focused on bringing cutting edge technology to the market, and a lot of what they do is research and development. They are fantastic at their section of the market. They are also focused on usability, the thing we have been focused on from the start. But the main reason to differentiate Horizen from other projects is that most of the projects are focused on cryptocurrency itself. And we are focused on bringing an open, permissionless, completely distributed platform to the market.

So, you want your product to be ready to use just out of the box or, rather, after one downloads an app on their phone, it just works, so is Horizen about having a polished use experience?

That’s a really important part of it, but the real value we bring is bringing the technology and infrastructure to the market that allows developers to easily catalyze upon this class of technology and bring it to their users.

So, your main focus in not an end user, but a business? It is more business oriented, right?

Not really, no. It is very important that we have everything as easy to use as it is possible for an end user. But we are a very small team of 40 people, and we need enterprises – other businesses – to make the ecosystem full and working. One half of the problem is creating apps ourselves and the other – to have other businesses to create apps on the Horizen platform.

Could you please elaborate on your encryption mechanisms? zk-SNARKs is employed in all ZCash-adjacent coins or most of them, anyway. Horizen, being a fork of ZCash, obviously improves upon the algorithm and the code. Could you please tell me a little bit about that?

We do use zk-SNARKs. However, I’m not going to pretend we improved zk-SNARKs, because it is just untrue. Our team is constantly working on the security and efficiency of zk-SNARKs, not just changing the core technology.

I know that Horizen mining is pretty complicated, but could you please elaborate on that a little bit?

Yeah, but mining is not too complicated. If you understand the basic principles, it is pretty straightforward. We operate proof-of-work for main chain for ZEN as a currency. And our algorithm is Equihash, which means that up until recently we were able to mine using GPUs. Up until that we had a conversation with one of the largest ASIC producers, Bitmain, and they announced the creation of an ASIC for the Equihash algorithm, and ever since that point the profitability of graphic cards declined, and now, it you want to mine Horizen, the best way is to buy an ASIC either from Bitmain or from another provider. How you mine depends on which pool you’d like to support. There are many pools listed on our website, at least 20 or 30. How you decide depends on which one meets your needs. Then you plug in the server into your hardware and turn it on. Really not too much more than that – also, you need a Zen address for your mining pool, and every time you submit shares you are usually paid per the share you submit. As for the split of block rewards, there’s recently been a change. We are self-funded, so we really want to make sure that there’s stability in the budget, so that we can continue development. In order to achieve that, we slightly increased the treasury block rewards, so the new split is like so: 70 percent of our block rewards are distributed among miners, 20 percent of the rest goes to the Horizen treasury, 20 percent goes to the engineering development, marketing, user experience. The other 20 percent is split between secure nodes and then 10 percent to super nodes.

I’ve heard the word “treasury”. Am I right in that treasury is a pool of funds that are used for maintenance of the ecosystem?

Correct. There’s lots of different ways to find a cryptocurrency project, but we did not start with pre-mined currency. We also didn’t do an ICO. Now the treasury in managed by the Horizen team, and that’s not an ideal situation, because we want to get rid of dependencies in the ecosystem. So now we are working on the treasury DAO system – DAO being a decentralized autonomous organization. This will control the money in the treasury of funds. The community will be able to vote and decide where money goes. Or, there may be several competing teams, and members of the community will vote for a better project.

I know that a similar way of distributing funds among the community is also employed in the Factom Protocol. They have a grant system where anyone can apply for one and then the community votes for their idea. This is a huge step towards the horizontal model of governance which I think every project out there should be able to implement.

I can’t agree more. And we want to create a project that self-perpetuates and is resistant to outside forces. If we think in a kind of risk perspective, right now we have a small group of people who are trying their best to make best decisions for the community. And this small group is a single point of failure, so we need to engineer this group up to the equation, so the project will survive regardless whether these people are still around or not.

Now, I’d like to talk about Horizen’s optional privacy features, as we’ve mentioned them before. How exactly does this switch between private and public transactions work at Horizen?

We have 2 different types of addresses which differentiate between transparent transactions and private transactions. If you want to send privately you have to have a full node running in the background so you will have a full copy of the blockchain downloaded, and you need a different type of address – a shielded one, which is significantly longer. And transparent transactions are a little bit easier for newcomers to use as you don’t need a full copy of blockchain downloaded onto your machine to use them.

So, one account or balance can have several addresses – a private or shielded one, and a public one. And when you send funds from your wallet to someone else’s you can choose which one to use?

Yes, if you think of the address as an actual wallet. When someone asks for some funds from you, they can either give you the details of their public wallet or their private one. So, it is up to an individual user. Freedom of choice is a big part of why privacy is optional.

Thank you for the explanation. There has been a lot of talk about 51 percent attacks, so I have to ask: is Horizen attack-proof? And a follow-up question: there has been a lot of talk about the vulnerability that makes people to mine infinite amount of some coins. Has it been already fixed and is Horizen safe from any of that sort of activity?

On the 51 percent attack side, first and foremost, it is impossible to say that there is no chance to attack Horizen. I can openly say that we were attacked; it was a 51 percent attack 9 or 10 months ago. We were ready. We were aware that it was possible to be subject to it, as it happened to other projects from time to time. We could take immediate action: reaching out all the different partners and employing the sticky plaster. Sticky plaster solution raises confirmations. It was a really simplified version of an attack – they wanted to mine ZEN privately but faster than a main – public – chain. So, they would have grown the execution power and after that – undo the transaction they have previously done. We had been already planning on prevention of such cases, because having an early mitigation system is great, but not a long-term solution. We worked very hard to really restore confidence in the industry, and we were lucky to have a very strong engineering resource at hand. Our engineering team came up with a fix. We introduced the system of penalties for those who seem to have made a longer chain privately – as we know from the Satoshi consensus, if you make a longer chain, it becomes the main one. So, if miners begin broadcasting, they need to wait for X, where X is the time they had been mining privately. This function makes such attacks much harder. Attacks without it are cheaper, because you can just hire a farm and attack. But with our new block you will have to confirm you are not doing it by mining on our network for some time. But an attack is still possible as more expensive and bigger farm can be hired, but it must be able to process 5, 6, 7 hundred blocks, which is a lot of.

Let’s talk about mass adoption. Have there been any major use cases for the ZEN ecosystem?

Yes, we’ve been quite successful with partnerships. In 2018 we tried to make ZEN useful as we could, we tried to get on as many exchanges, wallets and services as we could. And we tried to make sure we provided opportunities to use ZEN in as many ways as possible. Real money comes from utility. We had 2 pretty large integrations. The first one was with a group of adult entertainment websites, so we basically tried to understand how optional privacy of ZEN would be useful to users when you want to paddle the area you want to stay private in. I think there were 13 different websites in total. The second one is an organization called Flubit, based in the UK. They are essentially the Amazon competitors, they want to really smash them, to be seen as more forward-thinking, to be cheaper and faster. And we have many more, and nice news are coming up.

Let’s talk about the market for a bit. What do think is happening with this long – the longest in history – crypto winter and do you think it will clear up anytime soon? Maybe projects you believe in will be market growing points anytime soon?

Probably it seems worse than it is, because price went so mental in late 2017. The industry grew dramatically, because many people jumped in, being told by their friends to go buy some Bitcoin to make millions next month. The mass hysteria and essential market correction just made the market feel a little bit worse. In my opinion, growing points are the projects which have value, and it is great to see a lot of great, thinking-out-of-the-box projects having recently emerged. Keeping building is something we are planning to do, and everything will be fine.

I think so too. A lot of people tend to chase the market caps, prices, and no real value.

It is really hard to evaluate crypto projects, because you usually can’t apply typical models to them: they are not typical businesses. And there are many non-sophisticated investors, who don’t have full experience of investing in stock, with very high hopes, and they see the price of Horizen and say – oh it’s too expensive, I’m too late. Then, they go out and buy hundreds of cheaper coins thinking they would be more expensive soon, though there may be billions of these coins, which means they never get more expensive. The industry is still in its early days, people are not educated. We are going to launch ZEN Academy soon – iit will explain not just Horizen features, but all the fundamental stuff. And I think it is really important not to understand just one project, but the whole technology, industry, ultimate basics.

Thank you so much! I believe the entire crypto world should thank organizations like yours.

I believe we must do it for growth. And our mission is to enable and teach people around the world to use cryptocurrency.

Now let’s talk about ZEN the coin. What do you think about its situation on the market right now? I know than you guys have great plan for the future, maybe you can share a bit?

We are at point where we have a very large and complex roadmap. And the year 2019 is gonna be the year when we start pulling these projects together to conclusion. Our top priority now is our side-chain, SCP — a software development kit, which allows people to build on top of our infrastructure. We also have our Treasury DAO system, which I mentioned previously. For the industry, scaling is the problem, and we want to solve it before it becomes in any way serious.

Speaking of the future, will we be able to see any Horizen updates anytime soon?

What I am trying to do is not to announce anything. Yes, we do have something pretty exciting in a next, roughly, month.

Thank you so much for reading – stay tuned for more Know The Coin episodes soon!

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