I haven’t written about a blockchain, bitcoin or cryptocurrency teaser pitch for a while, so when the questions started piling up about the “Banker’s Coin” being teased by Barry Cohen in ads for his new Crypto Intelligence newsletter with Curzio Research, well, I thought I should at least try to get some answers for you.

To give you a quick note about my biases, I’m probably what you’d call a “crypto skeptic” — mostly because of concerns about valuation and ownership of the technology, with a side helping of likely government intervention, and took my profits on the vast majority of the speculative positions I had last year… but I do still have some small positions in a few of the bigger tokens (bitcoin, ethereum, etc.)

So what’s the deal today? Frank Curzio is pitching a cryptocurrency-focused newsletter that is helmed by Barry Cohen, who apparently comes from the hedge fund world, and it’s a premium-priced letter — so it’ll cost you $1,5000, with no refunds allowed, to sate your curiosity.

Or, of course, you can hang out here and we’ll see if the Thinkolator can tell us what “The Banker’s Coin” is, and give yourself a chance to think about it a bit before getting out your credit card. There’s a lot you can learn on your own about cryptocurrencies if you wish to make that your next hobby, and it’s always best to try to give yourself at least a little baseline knowledge before you pay someone a big chunk of money to advise you.

Here’s a little taste of the ad to give you a taste of what Cohen is talking about… it’s staged as an “interview” presentation…

“Way back when Bitcoin was first getting its legs, an independent cryptologist from Johns Hopkins was working on a piece of code to include in Bitcoin.

“Remember, Bitcoin is ‘open source.’ Any programmer can see the code and make changes to it.

“That’s simplifying it a bit, but that’s the gist.

“That’s what actually lead to the creation of hundreds of other coins and tokens.

“Ethereum, for example, is also based largely on Bitcoin code.

“So this cryptologist presented this string of code to the early developers of Bitcoin and it was rejected.

“The idea was that it would make Bitcoin too complex… slow things down…

“… that piece of ‘rejected code,’ is poised to make some people very rich.

“And it’s not going to be the people who invest in Bitcoin.

“It’s going to be the people who invest in what I’m calling The Banker’s Coin.”

OK, so that’s the basic idea — “The Banker’s Coin” provides something new that people need in cryptocurrencies, and is an improvement on bitcoin.

Other clues in the ad? This is what we get…

“There are a finite amount of coins, just like Bitcoin.

“The coins are minable, just like Bitcoin.

“And, like Bitcoin, the Banker’s Coin can be used in virtually any type of transaction.”

“Transaction” being pretty much a theoretical concept at this point… people don’t use cryptocurrencies in transactions as a general rule, they’re still mostly terrible at that — they trade them. But yes, the future value of any cryptocurrency will have to be based on how much it improves, speeds or secures something real like transactions, so that’s why crypto traders are looking in their crystal balls to try to figure out which coins will have real-world value in the end.

I’m not smart enough to figure that out, but let’s see what other clues we get from Cohen…

“… without this code now embedded in The Banker’s Coin there’s no way Big Money moves full force into cryptos.

“In fact, a number of the biggest banks and corporations in the world are already beginning to adopt it.”

OK, so what’s this special code that makes it acceptable to institutions? More clues…

“… the reality is that every bank, every government institution, every corporation, every financial exchange – they all need this rejected code.

… Why?

“In a single word: Anonymity….

“Bitcoin is completely useless for any institution that MUST have privacy.”

Isn’t the core of most cryptocurrencies this idea of privacy and anonymity? Well, not really — the first wave of cryptocurrencies, particularly bitcoin, is fully traceable… your trades may not be tied to you as an individual, but they are open and viewable by everyone as part of the transparency that makes it possible for all the other participants in the blockchain to verify the transaction.

That brings up the problem of “front running” — the argument from Cohen here (and you’ll hear it elsewhere as well, for sure), is that institutions won’t commit to a system that leaves their trading data out there for everyone to see. In Cohen’s words…

“I can tell you that as soon as other traders get wind of a play you’re trying to make… or people start piecing together your strategy through some of the money you’re moving around… the game changes… you lose your edge.

“If I’m Morgan Stanley and I’m making a trade with Goldman Sachs, I don’t want UBS to see all the details.

“If it’s a great arbitrage play, the spread disappears.

“If you’re trying to make a move on a company, everyone else will start bidding against you.”

So that’s the basic idea… what technology can be used to verify transactions and make them secure without sharing information about the transaction with everyone?

Apparently several different folks are implementing this idea. More from the ad…

“Well, this will probably shock you a bit, but none other than J.P. Morgan itself – the world’s biggest investment bank – has already bought in.

“They’ve teamed up with the developers of The Banker’s Coin and are integrating its code into a brand-new platform.

“Ethereum, the second-largest crypto asset in the world is doing the same thing – creating a hard fork, or change, to the way Ethereum will operate going forward.

“ING has started integrating a version of this code as well.”

What Cohen is talking about here are “Zero Knowledge Proofs” — basically, a system that’s set up to let transactions be verified and proven without revealing the details (any “knowledge”) about the transaction. This concept has been batted around in cryptography for about 30 years, and it’s a little hard to get your head around — how can you prove something is true without revealing why you know it’s true?

I won’t try to run through it in great detail for you, I’m far from being an expert on cryptography, but I do like the “Where’s Waldo” example — Travis and Bob are looking at a Where’s Waldo page, and Travis says he knows where Waldo is… how can he prove that to Bob without actually showing Bob and revealing the knowledge?

One solution is to take a piece of cardboard that’s much larger than the book, cut out a tiny hole in it that’s just large enough to show enough of Waldo to prove that it’s him, and place the book behind the cardboard with the Waldo picture showing through. That doesn’t reveal where on the page he is, but it proves he’s there and proves to Bob that Travis found him.

That’s an oversimplification, of course, but you get the idea — and that’s about as far as I can go without giving us both headaches. Basically, you replace the concept of “trust through transparency” with the concept of “provers” and “witnesses” and interactive back-and-forth proofs that, if done’ often enough, get close to being 100% true and secure (nothing is 100% in crypto world, or in real life, but cryptocurrencies have to be closer and more secure than other transaction systems because they’re designed to be linear and unchangeable — you can’t roll back or undo or dispute transactions).

So what’s this Zero Knowledge Proof coin that’s about 1% the size of bitcoin? There are a couple reasonably-sized possibilities, including the fairly popular Monero, but the Thinkolator points us at Zcash, which we’re told was the first of the truly anonymous blockchains. Zcash, usually abbreviated ZEC, has a “market cap” of about $800 million, so it’s close to being in the top 20 cryptocurrencies by that measure (according to CoinMarketCap.com)… right now it’s trading at about $200 per coin, though it got as high as about $800 during the crypto mania that peaked in early January ($200 is close to the low for the past twelve months, though it spent most of the previous year in the $40-$100 range). It is available on several of the bigger exchanges, including Kraken, which seems to be the exchange that Cohen recommends, but is not available for trading on the “entry level” systems like Coinbase or Robinhood that focus on bitcoin and ethereum.

And yes, Zcash does have a deal with JPMorgan Chase to include aspects of its zero-knowledge proof cryptography in JP Morgan’s blockchain technology, called Quorum. I have no idea whether this means anything for Zcash as a currency, or is just a benefit to the developers of ZCash (The ZeroCoin Electric Coin Company). There’s another interesting short piece from Bloomberg here about it if you’d like some background on that “why this is important for Wall Street” bit.

The term used for this technology that Zcash spearheaded is zk-SNARKS, and that technology was also added to Ethereum last fall in the Byzantium software update… so this is again something where I can’t get a handle on ownership and who will be the financial beneficiary of a technology — is it the smaller Zcash network? The much more established ethereum network? The JP Morgan-controlled Quorum group that uses ethereum? Does this create value that will “trickle down” to all of the tokens in some way? I have no idea.

The technology and the coding is open source for pretty much all cryptocurrency stuff, so it has been added to other coins now as well, and has been tweaked by lots of different developer groups (there’s even a “Bitcoin Private” now, which is mentioned in this explanation fo the zk-SNARKS developments from back in January).

So yes, I remain skeptical, but I know lots of folks are enthused about all kinds of cryptocurrencies… and the hints about “The Banker’s Coin” point directly at Zcash. Whether that means Zcash will rise or fall, you’ll have to make your own call on that.

If you’ve got a take on this notion of privacy and anonymity in the blockchain, or a favorite way to bet on blockchain or the cryptocurrency markets, feel free to share your thoughts with a comment below… we won’t bite.