A Small Crypto Coin Is Making Big Claims About a Private Proof-of-Stake

If any coin is going to fly under the radar, it makes sense for a privacy coin to do so.

Spectre, created two crypto tokens - the aptly named spectre token and the xspec token - in 2016, but hasn't received much notice from the crypto community so far.

"All the UTXOs spent to generate staking transactions are traceable on the blockchain and all the staking transactions can be linked and your balances are visible to anyone who knows how to analyze the blockchain," Mandica told CoinDesk.

The Spectre team, which has been tinkering away on various privacy tools for blockchains for the past couple years, thinks it's found a way to make staking stealthy as well.

Ring signatures allow anyone in a particular group to sign a transaction, making it impossible to determine exactly which participants' keys signed the transaction.

While that's a bit challenging to parse - and the Spectre team was cautious about explaining in too much detail - there are some clues as to what the system entails.

Mandica declined to explain in detail what these wallets are doing, but he did say that the "Proof-of-stealth" algorithm the team is employing is designed to take advantage of the creation of new tokens with no prior history to increase entropy used to mask the true transactions.

According to the team, in its next major release, the new proof-of-stealth staking mechanism for anonymous coins - the spectre coin is the anonymous one - will complement the proof-of-stake version 3 algorithm the blockchain already uses.

With this kind of anonymity it would have been easy to just walk away, the team didn't give up - even when it's initial coin offering flopped and its project was lacking vitality, while all around them crypto projects, some without serious intent, raised millions by selling tokens.

Spectre did secure private funding earlier this year, but still the project remains just an after-hours project for the team.