After researchers from Coinmetrics.io recently uncovered of what they believed should be the output from the supply curve of the ZClassic/Bitcoin hybrid cryptocurrency, there are chances of Bitcoin Private’s development team to be criticized for the same.
According to the insight, the research team of Coinmetrics.io was successfully able to find out how close to 2 million coins were placed into developer wallets at the time when currency’s blockchain was being established. The team came to know about this when they ran a simple request upon updating a Bitcoin Private full node on the Bitcoin codebases. The team mentioned –
“In verifying these figures, we ran a BTCP node (version 1.0.12-1), and made a call to the RPC method gettxoutsetinfo […] At the time of writing, our full node reported an outstanding supply of 20.841M BTCP. This contradicted both CMC and the expected figures from the initial supply at fork time combined with the subsequent block rewards.”
Other than covert premine, the researchers also investigated several alternative possibilities as well. Out of several possibilities, one might be that they might be using broken code to get the figures. The team might have got false results from Bitcoin too as the code was not the altered one and was forked from Bitcoin. Another alternative investigated could be the zkSNARKs that might be broken too.
The team also verified whether the formula they were using was correct and were they getting their data from the longest possible chain (correct) or not. This was done to check the mining reward that hadn’t been altered at some point in the chain.
Despite testing different tricks the researchers were not able to find the actual possibility, making them left with only one probable conclusion – Bitcoin Private secretly pre-mined coins at the time when they were establishing its blockchain. This later turns out to be a complicated process of merging the unspent outputs (coins) on the Bitcoin blockchain into the Zcash codebase.
Coinmetrics explained the whole process as –
While BTCP was a “merge fork” conjoining the ZClassic and Bitcoin states, the basis of the BTCP fork was the ZClassic ledger, not Bitcoin. At the agreed-upon snapshot block, Bitcoin’s state (the registry of unspent outputs) was imported into the parent ZClassic chain by mining thousands of blocks with transactions creating the Bitcoin unspent outputs, effectively forking it into BTCP at block 272,992. At the end of this import, an extra 62,500 BTCP were minted in accordance with the “Voluntary Miner Contribution Program”. Once this import was over, Bitcoin Private’s own history began.
The research team from Coinmetrics also found that almost 300,000 units were sent to the exchanges. The company added, “Three hundred thousand units of the covert premine were moved out of the shielded pool towards what appear to be exchanges.”
Upon all the allegations, Bitcoin Private is yet to make an official response. However, the company has promised that the response can be expected soon by updating through a Twitter post –
“We are aware of the recent “premine” allegations and are looking into it. We will let the community know more once we have all the details.” Bitcoin Private [BTCP] (@bitcoinprivate)