Tags: Currency.
Zerocoin is a proposed extension to the Bitcoin protocol that would add true cryptographic anonymity to bitcoin transactions. Given that bitcoin transactions are stored in a public ledger (in the so called block chain) the history of any transaction can be traced. Zerocoin provides for anonymity by the introduction of a separate zerocoin cryptocurrency that is stored in the Bitcoin block chain. Zerocoins are purchased with bitcoin in fixed demoninations by a zerocoin mint transaction.