Great news: today Gemini, a large and tightly-regulated US exchange, announced bidirectional shielded Zcash support!
See the Gemini announcement, ECC announcement and Coindesk coverage.
It is now possible to withdraw Zcash from Gemini directly to a z-address, in addition to depositing directly to Gemini from a z-address (which has been available since 2018). Put otherwise, you can now use Gemini using a purely shielded Zcash wallet like Nighthawk. This is a huge step towards practical use of Zcash in a truly privacy-preserving way.
Gemini is now the largest exchange supporting bidirectional z-address transfers. Kudos to Gemini for this leadership, and to the ECC team for facilitating it!
Thanks @tromer, you beat me to it
Everyone - make sure to tune in tomorrow, September 30th at 3pm Eastern Time for a live Twitter Q&A with Zooko, Tyler and Cameron. Event details here.
This is a great first step!
But it may be important for users to note that Gemini withdrawals can be shielding, not fully private or shielded. Depending on how Gemini makes these withdrawals, and how users subsequently use their funds, they may be linkable on chain. The safest way to use Zcash is only to interact with shielded addresses for all transactions.
That being said, hopefully Gemini moves to fully private transactions.
Awesome news!! Great work ECC team for facilitating this.
One question: wondering why Gemini chose to store exchange ZEC in t-address now
In regards to privacy, this is equivalent to withdrawing cash or any non-public ledger asset, right?
For a shielding withdrawal transaction, the amount and source address (belonging to Gemini) are in the clear. The destination address is not.
I’m assuming that I enter my destination z-address into the Gemini app
When I withdraw cash from my traditional bank account, the bank knows how much I’m withdrawing to where. Gemini knows the same - they know which zaddress the withdrawal from their accounts is routed to, right?
Yes; the sender of a transaction always knows the recipient’s address (as they need to create the output proofs). The difference is that the public don’t learn the address from inspecting the block chain, which they do for transparent withdrawls.
Gemini (and assume whatever 3-letter agency) know exactly who you are and in what z-address the money went.
What neither of them know is what you do with the money after that, assuming you refrain from moving the exact amount around etc.
Yeah, the reason it’s important to keep pushing for shielded support (not just shielding and deshielding support) is that under some usage patterns, it is possible to heuristically link transactions using timing and amount information. For some use and risk models, the difference between shielded and shielding transactions may not be relevant. For others, it may be very important.
Cool!!! As I mentioned elsewhere -
This makes zcash more like cash - once it’s withdrawn, it cannot be traced!
But, unlike cash, zcash is digital… #z2z
Pretty big news IMHO!
By the way, this is not a first, by any means. It is the biggest and most regulated exchange so far though. This is great indeed. It proves that if they can do it, every other exchange in the world can do it.
sideshift.ai has been supporting fully shielded transactions for a year or so. I have used it and works great.
Can someone ask this question during live Q&A session? “Can you use z-addr to store & take deposits from your customers”
Was there any response to this?
Gemini seems to be pretty good actors in this space, not shying away from privacy and DeFi and spending a lot of effort on educating regulators.
does anyone know how the compliance folks / auditors of gemini were convinced to support this? what arguments were used?
During the livestream they mentioned the analogy of Cash as a talking point with the Regulators.
Something along the lines of: The current banking system and regulations are OK with a user removing cash from a Bank, then having no direct knowledge and not needing to know how that users spends the cash, and later deposit cash back into a Bank.
Zcash shielded pools behave in a similar way, the Exchange knows that someone withdrew Zcash into thier private address, spend it without tracking, and can later deposit Zcash back into the Exchange. All within the existing regulatory framework.