Good information, but how was the trusted setup handled? Did the keys get burned in a way we can know it is done?
If someone got a hold of the keys, what damage could they do?
Zcash and ZenCash, solves the privacy and fungibility problems by using zero knowledge proofs, Zcash was the first coin to use zk-ZNARKs. In Zcash and ZenCash a private currency exists that divulges neither the sender address, receiver address, or amount sent. This is fundamentally different to mixing, and a fundamentally superior in terms of facilitating real privacy. The zero knowledge proof algorithm used in both Zcash and ZenCash is called zk-SNARKs.
Why do these keys have to be destroyed?
The initial parameter generation for the zk-SNARKS creates the keys that are used to create proofs for private transactions, and to verify those proofs. These keys are the single way for transactions to be proven as good and not forgeries on the global encrypted blockchain. When the keys are first created there is a hidden parameter that links the two keys. It is the secrets used to generate these keys that if not destroyed could be used to forge transactions by false verification thereby giving that person the ability to create unlimited Zcash undetected.
https://minezcash.com/zcash-trusted-setup/https://zensystem.io/assets/Zen%20White%20Paper.pdf chapter 5.2
https://z.cash/technology/zksnarks.html