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FAQ

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All existing privacy coins expose users to trade-offs and compromises. Some offer always-on privacy, but are based on technologies that may not prove sufficiently anonymous in the long-term. Others, based on advanced cryptography, allow for non-private transactions, which tends to confound and confuse their users.

Veil is working to offer an unprecedented level of always-on privacy and anonymity. When Veil’s roadmap is completed, you will never have to worry about accidentally making a non-private transaction. Furthermore, in the interest of long-term viability, the Veil network is designed to provide funding for its ongoing operations as well as continued research and development in the fields of cryptography and blockchain technologies.

In our view, the combination of uncompromising privacy technology, with a network designed for sustainability, will make Veil one of the most compelling cryptocurrencies in the world.

There are, in principle, four primary ways to obtain veil:

  • You can mine for veil via Veil’s Proof-of-Work consensus system.
  • You can purchase veil on a centralized or decentralized exchange.
  • You earn veil as a reward by “staking” it in your wallet.
  • You can perform “bounty” work for the project, receiving veil as compensation.

Veil was founded by James Burden, known as 4x13 in the project. James is a recognized industry expert in the area of crypto-privacy, and has a track record of founding and leading successful cryptocurrency projects, such as PIVX. Through bootstrap funding, James assembled a founding team of leading blockchain developers, designers and experienced operations staff, many of whom are profiled on our site’s Team page.

Our coin emission table is presented in the Technology section of the website, and is capped at 300 million coins.

In order to avoid an ICO and pre-mine, the Veil Project has been pre-funded in excess of one million USD by its founder. As a mechanism to recover this investment, a founder’s reward was established, which tapers and expires over a five-year period.

The operations budget was established to fund the team (currently over 30 individuals), and the Labs budget was established to fund ongoing research and development in the areas of advanced cryptography and blockchain technologies.

The X16R hashing algorithm was introduced, by the Ravencoin project, in an effort to resist the development of dedicated ASICs, thereby increasing the decentralization of mining. For this reason, X16R was selected as the baseline for Veil’s mining.

Threatening decentralization, Field-Programmable Gate Array (FPGA) code for X16R is known to exist, and expected to become widely available soon. To address this risk, Veil has created an implementation of the algorithm, called X16RT, which preserves almost all the benefits of X16R, but with an added barrier against FPGAs. In particular, the ordering of blocks in X16RT have to follow different rules to be accepted by Veil nodes.

While mining pools, and even exchanges, will not have to make modifications on the software side, software that calculates block hashes and submits them to the network will.

In Zerocoin-based networks, zerocoins exist in fixed denominations, e.g 10, 100, 1,000, 10,000, etc. Without going into detail, this provides anonymity in a similar way cash exists in fixed denominations. Basecoin is that portion of your wallet’s balance that’s not convertible to Zerocoin denominations. Both Basecoin and Zerocoin represent the same token, in our case veil, with the difference being that Zerocoin allows you to spend your veil without having a link between yourself and the spend.

For example, say you had one 100 Zerocoin veil, and purchased something that cost 7 veil. Your 100 Zerocoin veil would be sent to the network, and you’d receive 93 Basecoin veil in return. Your Veil wallet would convert 90 of those basecoins to nine Zerocoin denominations of 10, leaving 3 Basecoin veil in your wallet. The Basecoin balance in your wallet is commonly referred to as your “change”.

In Veil your wallet will automatically mint your available balance into zerocoins, the standard denomination for autominting is 10, but can be changed to 100, 1,000 or 10,000 based on user preferences. Any amount below 10 is not eligible to be minted into zerocoins, and must be held as basecoin until at least 10 basecoins are acquired.

Something important to remember is that in Veil, contrary to other Zerocoin-based networks, the Basecoin state is also anonymized; in our case, with the use of RingCT technology.

Veil’s hybrid consensus systems includes “Proof-of-Stake”, in which individual coin holders, who have “staking” enabled in their wallets, can compete to process the network’s transaction blocks. After each one-minute block processing period, actively staking wallets compete for validation based on the amount of veil that is staked in the wallet. The chosen wallet, after successfully validating the current block of network transactions, receives veil as compensation for the work done.

To stake, all you have to do is be fully synced and unlock your wallet for staking. This will allow your Zerocoin veil to stake.

If your zerocoins have been minted from RingCT in Veil, then the privacy benefits of RingCT will flow-down to your zerocoin staking rewards.

Most crypto “core” wallets store the full ledger of blockchain transactions locally, which for a coin like Bitcoin, requires hundreds of gigabytes of storage, and is continually expanding as new blocks of transactions are added to the ledger.

The Veil wallet offers an option (enabled by default) that removes—“prunes”—those ledger transactions that are not relevant to the wallet owner’s own history of transactions. While the Veil blockchain will be considerably smaller than Bitcoin’s for the foreseeable future, pruning will still save the user considerable local storage space.

Technical observers will rightly recognize that to secure the network, some nodes (wallets) need to maintain the full ledger of transactions. To incentivize for this, when a “full Veil node” processes a transaction block—i.e. a wallet owner willing to allow the local storage of the complete blockchain—that wallet, in addition to the normal staking reward, also receives the transaction fees present in the block (which would otherwise be burned.)

Replacing Zerocoin as a core technology

Half a year after the launch of Veil in 2019, a series of vulnerabilities were discovered in the Zerocoin library which sits at the core of most Zerocoin-based protocol implementations, including Veil’s. In order to immediately protect Veil user funds, the project released an update that preserves the functional characterics of Zerocoin, but removes its unlinkability to original mints.

After review, and community discussion, the Veil project, along with a number of others, concluded that Zerocoin can not be relied upon to form the anonymity core of the protocol, and at the time of this writing, the project is assessing a number of alternatives.

Zerocoins minted in Veil from RingCT, still carry the anonymity inherent in RingCT, and so during the interim Veil users have some level of anonymity in spending and staking with Zerocoin if originally minted from RingCT.

The remainder of this page describes how Zerocoin is used in the Veil network today, but the reader should be aware that at some point, likely during 2019, Zerocoin will be replaced.

Dandelion is a transaction broadcasting mechanism that reduces the risk of eavesdroppers linking transactions to the source IP.

Dandelion alters the flow of transaction propagation through the network. By splitting the transaction into two phases, called the “stem” and “fluff” phase, it becomes very difficult to link transactions with their source IP.

During the stem phase, each node relays the transaction to a single peer. After a random number of hops along the stem, the transaction enters the fluff phase, which behaves just like ordinary flooding/diffusion. Even when an attacker can identify the location of the fluff phase, it is much more difficult to identify the source of the stem.

Illustration:

                                                 ┌-> F ...
                                         ┌-> D --┤
                                         |       └-> G ...
A --[stem]--> B --[stem]--> C --[fluff]--┤
                                         |       ┌-> H ...
                                         └-> E --┤
                                                 └-> I ...

Stealth addresses allow you to publicly post a static receiving address without anyone being able to see the associated transaction history. This is a big improvement over traditional Bitcoin addresses.

To preserve privacy in traditional Bitcoin addresses the receiver has to be careful to never link himself to any of his addresses and preferably generate a new address after every transaction.

With stealth addresses the receiver does not have to worry about generating a new address after every transaction, or having his name tied to his receiving address. This is achieved by deriving a new one-time public key as the destination for every transaction using the receivers address and random data generated by the sender. This makes it impossible to link any output (the one-time public key) back to the receiving address, allowing users to have a static receiving address linked to their name, without revealing their transactions.