- HavenProtocol (XHV) — Financial Privacy On Steroids
Just now·7 min read
HavenProtocol is based on the Monero-technology, with multiple unique features to create not just a private cryptocurrency, but also stable assets on the blockchain with privacy by default, thus creating an ‘offshore bank’ in your pocket. There was no premine, no ICO, no seed funding. The project finances itself through a block reward fee. More information about the Haven contributors, lead by Dweab and Neac, here.
The main difference between HavenProtocol and Monero (XMR) is the function called ‘coloured coins’, that was originally developed for Bitcoin back in the days. Then it would have been possible to connect a Bitcoin (fraction) with an attribute — yet, it was never achieved. Neither on Bitcoin, nor on Monero. Just the HavenProtocol team was able to do it! Those coloured coins enable the protocol today to swap XHV to xUSD and other private, stable assets:
It is hard to wrap ones head around it, at first. Both, the XHV and the xUSD (and other stable asset) supply is not static but dynamic. If you want to mint xUSD you have to burn the equivalent amount of USD in form of XHV.
If 1 XHV = $10, minting 100 xUSD would require burning 10 XHV. This works also vice versa and you could burn 100 xUSD, getting x XHV back; depending on the XHV price development more/less than you originally burned. Here you can use a 24-MA for your advantage and react on market events in a more appropriate time frame.
In times of low volatility and the still tiny size of the HavenProtocol ecosystem, it is possible for bigger players on the market to manipulate the XHV price, obviously — that said: this works in both ways.
For the project it is important now to get the ThorChain integration done that will lead to more liquidity, making it easier to onboard more interested speculators/users and also use cases to spend xUSD. The Haven xUSD Debit Card was just the first step!
I will never forget how I read about HavenProtocol the very first time. It was directly after the project announcement got posted on Bitcointalk:
To read it was kinda intriguing. An ‘offshore bank’ for ‘your pocket’? Untraceable payments and stable value storage? This was like the holy grail and almost nobody thought it could be done, ever. To develop this on a private blockchain was a task that even most devs wouldn’t dare to tackle.
When I then read the post from notsofast ‘I will throw some hash at this’ I was already sold and got my first XHV days later. This first chapter of HavenProtocol ended when the old team abandoned the project; too huge were their struggles, there was no way for them to succeed.
The project was taken over by different community members in January 2019. The original code was forked, the task was clear: To make the groundbreaking idea behind the protocol a success!
And, they did it! The HavenProtocol mainnet launched on July 20th, 15:00 GMT in 2020. The optimism in the XHV community was unseen; of course: That was was deemed ‘impossible’ by most, wasn’t. All people who claimed that were proven wrong.
However, we are talking about an experimental technology. In retrospect, it shouldn’t haven been this surprising what happened later in summer 2021.
The HavenProtocol got exploited; the teams reaction was superb, figuring out all details of the attack, the attack-vectors, to see what happened. Afterwards they went on to fix certain problems that made those attacks possible. HavenProtocol got forked once again, a new security audit was done and also there were Monero devs involved in the whole process.
Because it is not just a privacy coin but a full offshore bank in your pocket.
Because governments will continue to limit your financial privacy.
Because they will implement CBDC’s, abandon cash and monitor everything.
Because nobody really cares till it is almost too late. ‘Privacy’ wasn’t a trend till now, but will be in 2022 and following years!
We are sitting at a laughable market cap, with laughable trading volumes compared to other stable coins. I don’t want to make price predictions at all here, right now. But if you want to get a grasp of the potential HavenProtocol (XHV) has, read this article about XHV pricing models.
The basis of Monero’s technology is the CryptoNote protocol, with the associated Cryptonight hash algorithm.
Cryptonote aims to improve the privacy aspect of cryptocurrencies. For example, if you transfer coins on the Bitcoin blockchain, this transaction is publicly visible to everyone.
Payments can always be traced back to a wallet and, as a result, complete payment flows, i.e. multiple transactions over any length of time.
Cryptonote also uses a public ledger, but it is not possible to trace which wallet a transaction came from or went to. Only the total number of coins can be read.
The CryptoNote protocol has been in development since 2012 and was one of the first blockchain protocols to address the issue of privacy.
The first whitepaper on it was published by “Nicolas Van Saberhagen”, but this is just a pseudonym. Similar to Satoshi, no one knows who is behind it.
In order to understand the essential aspects of the technology behind XMR, I will list an example of a transaction below, taking into account all relevant security aspects:
Stealth addresses are automatically created for each transaction.
This “one-time key” determines the recipient of the transaction. Outsiders, however, cannot do anything with this key.
The public key for sending and the key for viewing are formed from the 95 characters of a Monero wallet. When a transaction is made, arbitrary data is added to create a new key, which in turn can be used to issue the XMR.
The private key in the wallet then ensures that the coins sent arrive in the correct wallet and can also be spent. This means: private keys are never visible on the blockchain, the recipient protects his privacy; only the transaction can be traced by other people who have the private key to view it.
Ring signatures consist of different components, each of which has the same value.
Only one part is the valid signature of the person who sent XMR.
All others are randomly drawn from older transactions on the blockchain. Which signature is from the sender cannot be traced.
Ring CTs (CT = Confidential Transaction) ensure that there is no information on the blockchain about how many XMR were sent in a transaction.
The sum of the inputs is always equal to the output. The total credit is always made up of different inputs.
If you have an input of 8 XMR and want to send 6 XMR, the complete input is divided into two outputs (1. 6 XMR transaction output; 2. 2 XMR bill of exchange output).
A range proof ensures that the amount of a transaction exceeds zero.
“Kovri” is an in-house development of the busy Monero Developer Team.
Since TOR and VPN solutions have security gaps, they decided to build their own solution.
Otherwise, IP addresses of network users would be publicly visible — a big problem for a cryptocurrency that is designed for the anonymity of its users.
“Kovri” offers anonymous access and works on the basis of an I2P network. IP addresses of the users are disguised and the data is inaccessible to third parties.
Each node in the network adds a new “protection layer”. Only with the right key can these protective layers be removed again.
It is as simple as that. Once you started understanding what the protocol is all about, if you have an understanding of current world events especially in the financial sector, you will look at the XHV-chart and maybe even re-define ‘asymmetric’ for yourself as the potential is plain crazy.
But I don’t want to spoon feed you everything. Go and do your homework. I did mine — personally I will never stop supporting this project — it is the most innovative one we have in our industry.
Haven Guides: https://havenprotocol.org/haven-guides/
- Date of publication:
- Sun, 01/02/2022 - 12:42
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