In a hotel room in Boulder, Colorado, a group of strangers gathered in October 2016 to perform one of the most unusual rituals in the history of money. What they did that day would determine whether a new form of digital cash could be trusted by anyone, anywhere, ever.
They called it “The Ceremony.”
This is the story of how six people who had never met in person collaborated across multiple time zones, using air-gapped computers, encrypted communications, and extreme paranoia, to launch Zcash, the privacy cryptocurrency that would go on to pioneer technology now used across the entire blockchain industry.
Why The Ceremony Mattered
To understand why The Ceremony was necessary, you need to understand a crucial challenge facing privacy-preserving cryptocurrencies: the trusted setup problem.
Zcash uses a cryptographic technique called ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) to enable private transactions. These proofs allow the network to verify that transactions are valid without revealing who sent money, who received it, or how much was transferred.
But there was a catch. In 2016, creating ZK-SNARKs required generating special cryptographic parameters through a process that produced what researchers called “toxic waste.” If anyone retained this toxic waste, they could potentially create counterfeit Zcash coins without detection, forever compromising the integrity of the entire system.
The solution was to ensure that the toxic waste was destroyed before anyone could use it. The challenge was convincing the world that this had actually happened.
The Multi-Party Computation
The Zcash team designed an elegant solution: a multi-party computation where six independent participants would each contribute random data to generate the parameters. The protocol was designed so that as long as at least one participant destroyed their contribution, the toxic waste would be irretrievable.
Think of it like six people each adding a secret ingredient to a recipe, then burning their notes. Even if five of them secretly kept copies, as long as one person truly destroyed theirs, no one could ever reconstruct the complete recipe.
The participants were chosen from different backgrounds and locations to minimize the chance of collusion: academics, security researchers, and cryptocurrency veterans spread across the globe.
📚 *The complete story of how these six participants were selected, vetted, and coordinated is told in detail in* **ZERO: The Zcash Revolution** *by Ryan Bethencourt.*
The Security Measures
The paranoia surrounding The Ceremony was not performative. It was essential.
Each participant used air-gapped computers, machines that had never been connected to the internet and would be destroyed immediately after use. The computers ran a custom operating system burned onto DVDs, with no hard drives that could retain data.
Data was transferred between participants using DVDs that were immediately destroyed after use. The chain of custody was documented at every step.
Peter Todd, a well-known Bitcoin security researcher and one of the six participants, took the paranoia to extraordinary lengths. He traveled by Greyhound bus across Canada, purchased a computer with cash from a random electronics store, performed his portion of the ceremony in an undisclosed location, then literally set his laptop on fire to destroy any trace of the data.
The flames that consumed his laptop weren’t just theatrical. They were a statement about what it takes to create trustworthy financial infrastructure in the digital age.
The Creepy Phone Incident
During the ceremony, something strange happened that has never been fully explained.
A journalist covering the event reported that a phone in the hotel room began echoing the conference call. The participants could hear their own voices coming back through a phone that wasn’t supposed to be connected to anything.
Was it a bug? A glitch? Something more sinister? The incident fueled speculation about state-level surveillance and the high stakes involved in creating truly private digital money.
The participants completed the ceremony anyway, their paranoia validated but not derailed. Whatever the explanation, the incident became part of Zcash’s origin mythology, a reminder that privacy technology attracts attention from those who would prefer it didn’t exist.
Destroying the Toxic Waste
After each participant completed their portion of the computation, they had to destroy the random data they had generated. The methods varied, but all were designed to be irreversible.
Some participants physically destroyed their computers. Others used industrial shredders. Peter Todd chose fire, watching his laptop melt in the flames as photographers documented the destruction.
The RAM chips were removed and individually destroyed. Hard drives were degaussed and shredded. Nothing was left to chance.
When the ceremony concluded, the six participants had generated the cryptographic parameters needed to launch Zcash without any single person or group retaining the ability to compromise the system.
The Launch and Beyond
On October 28, 2016, two weeks after The Ceremony, Zcash launched. In its first moments of trading, the price briefly exceeded $4,000 per coin, making it momentarily the most valuable cryptocurrency in the world, a testament to the demand for financial privacy.
But the story doesn’t end there. The Zcash team knew that The Ceremony, while successful, wasn’t a permanent solution. Any trusted setup, no matter how carefully designed, leaves lingering questions about whether all participants truly destroyed their data.
The long-term answer came in 2022 with the NU5 network upgrade, which introduced Halo 2, a new proving system that eliminates the need for trusted setups entirely. Future versions of Zcash no longer carry even the theoretical risk of compromised parameters.
The Ceremony had done its job: it bootstrapped the network until technology caught up with the vision. The six strangers who gathered in October 2016 had bought the project the time it needed to transcend its own limitations.
The Legacy
The Ceremony remains one of the most remarkable events in cryptocurrency history. It demonstrated that with enough creativity and paranoia, even fundamental cryptographic limitations can be addressed through careful protocol design and human coordination.
The techniques pioneered for Zcash’s ceremony have influenced other projects facing similar trusted setup challenges. The concept of multi-party computation for generating cryptographic parameters has become a standard approach in the industry.
But perhaps more importantly, The Ceremony showed that building trustworthy financial infrastructure requires more than just code. It requires thinking deeply about adversarial scenarios, taking extreme precautions seriously, and being willing to do things that might look paranoid but are actually proportional to the stakes involved.
In an era when financial privacy is increasingly under assault, the story of The Ceremony reminds us what it takes to create alternatives. Six strangers, scattered across the globe, used fire and cryptography to give the world something precious: the option to transact privately.
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*Ryan Bethencourt is the author of ZERO: The Zcash Revolution, the definitive narrative history of Zcash. A pioneer in biotechnology and venture capital, Ryan brings his unique perspective to the intersection of technology and finance.*