Horizen employs an Equihash 200,9 hashing algorithm, which is a memory-hard, proof of work (PoW) mining protocol. In line with the overall privacy-centric goals of the network, Horizen utilizes various cryptographic implementations, including zero-knowledge succinct non-interactive arguments of knowledge (zkSNARKs) and shielded addresses, in addition to specialized nodes referred to as Super and Secure Nodes.

zkSNARKs are a cryptographic solution where each party can verify that they have a specific set of information without actually revealing what the information is. For example, in a transaction, one party can verify the value of “X” without revealing what the value of “X” is.

The use of zkSNARKs also enables the use of two types of addresses. The first type is “T” addresses, which allow for transparent transactions similar to Bitcoin. The second type, “Z” addresses, are referred to as shielded addresses because the transactions remain private by hiding the sender and recipient addresses as well as the transaction amount. The transaction fee is known, though, but defaults to 0.0001 ZEN to promote privacy.

Horizen’s platform is also powered and secured by a node layer – comprised of Secure and Super Nodes. The platform’s architecture ensures encryption even at the node level. According to Horizen, ZEN is the first cryptocurrency with full end-to-end encryption at the node and inter-node level.

Secure Nodes operate similar to traditional nodes but have additional security features. Secure Node operators are required to maintain Secure Sockets Layer (SSL) and Transport Layer Security (TLS) certificates. Communication is encrypted from nodes to nodes and between clients and nodes. Secure Nodes are required to stake 42 ZEN and have the ability to send shielded transactions. 

Super Nodes are more powerful compared to Secure Nodes and, as a result, have higher staking requirements (500 ZEN). Super Nodes are tasked with managing critical network and systems functions. After recent updates, Super Nodes will be able to bring tracking and payments on-chain or within the protocol, as well as the introduction of multi-layer sidechains to enable the Horizen system for future services.

Launched in May 2017, the Horizen platform aims to enable real-life uses beyond its cryptocurrency - ZEN, including the ability to deploy sidechains and integrate third-party technologies.

The team is working towards releasing the Sidechain SDK, which will allow developers and enterprises to build applications, products, and services on top of the Horizen technology platform.

To accomplish its goals, the project is developing several services based on Horizen’s framework. The first and foremost application of Horizen is the ZEN coin with optional privacy, which is designed to be a way to transfer value without revealing individual transaction details. The following services are in development or have already been deployed with full or partial functionality:

• ZenNodes is a multi-tiered, industry's most extensive node system comprised of incentivized Secure and Super Nodes (40000+ in total). 
• ZenChat is a security-focused messaging application that can function as a standalone app and is also embedded in Horizen's full node wallets - Sphere by Horizen and Swing.
• ZenDAO will be the decentralized governance system to allocate treasury funds to continue the development of the Horizen platform.
• Sphere by Horizen is a multifunctional application that allows people to take control of their privacy and finances. It is a launching point for most Horizen services.
• Sidechains are a scaling solution that enables the connection of bespoke blockchains to the Horizen mainchain.
• Sidechain SDK includes all necessary components required for building a blockchain in a single toolbox, like a consensus, network layer, wallet, etc.
• Horizen Academy is the learning portal for cryptocurrencies and blockchain and includes content for every level of knowledge, from beginner to expert. 
• Horizen Developer Environment (HDE) is a platform that incentivizes open-source contributions to the Horizen ecosystem and cultivates collaboration among developers.
• Horizen Early Access Program (HEAP) is a service which gives developers an opportunity to gain exclusive and early access to Horizen's newest releases and product features before they are publicly available.
• ZENHUB is a tool for community growth, focusing on new users and offering educational steps, in addition to faucet and games to reward them with ZEN cryptocurrency.

ZenNodes

With over 40000 full nodes, Horizen has the largest node network in the industry. Horizen has three types of nodes: 

• Regular full nodes - typically wallets which are running an instance of Horizen's core software - ZEND, hold an up-to-date copy of the blockchain and are contactable via IP address.
• Secure Nodes - are full TLS encryption enabled to secure inter-node communication, which prevents things like man-in-the-middle attacks. Horizen claims to be the first blockchain to implement node-to-node TLS encryption. Secure Node Operators each receive an equal share of 10% of the block rewards. 42 ZEN is required to be staked to host a Secure Node.
• Super Nodes are currently more powerful Secure Nodes. In the future, they will host Horizen sidechains, which will allow the tracking of Secure Nodes to be brought on-chain, a significant step forward towards decentralization. They will also support many dApps that provide real-life services. Super Node Operators each receive an equal share of 10% of the block rewards. 500 ZEN is required to be staked to host a Super Node.

ZenChat

ZenChat, the first application on the Horizen blockchain platform, allows users to communicate 1-on-1 or through group messages and channels. You can choose to send messages from an identifiable address or completely anonymous.

The Z transactions in Horizen can incorporate text-based messages, which are encrypted and included in the blockchain. There is around 340-character limit for these messages. As an example, ZenChat enhances the ability of users to conduct secure commerce. Instead of 5 individuals discussing the transaction in other less-secure channels that may not have the same level of privacy enhancements as ZEN, users can communicate via ZenChat messages with the other parties before and after the shielded transfer takes place with minimal Z transaction spends. 

These messages can be sent directly from one Z address to another, and they can also be sent to a channel. By generating a Z address from the hash of a channel name, users can subscribe to the channel and read anything published by anyone to the channel.

Messages in ZenChat are transactions on a blockchain, just like the ones you use to send funds. A specialized data field contains the actual message you are exchanging, the memo field, which is usually not occupied in a regular transaction. Users can send messages from T-Address to Z-Address if a user wishes to be identifiable or from one Z-Address to another if the user chooses to communicate anonymously.

ZenDAO

The ZenDAO will be one of the sidechain applications for the Horizen platform, to transition to decentralized, community-based governance.

The community can submit a proposal for future consideration. Stakeholders can review the proposals that get passed on, and then they get sent to the next stage where ZEN holders can vote on where funding gets placed. Each holder would stake a deposit of ZEN, which will allow them to participate in this voting process. The architecture of the community-based treasury model is being developed in collaboration with IOHK.

Sidechains

Due to the overarching nature of several functionalities that the Horizen team wants to implement into the platform, like decentralized governance and application development, it was decided to take a sidechain approach for the integration of these.

A sidechain implementation, called Zendoo, is completely decoupled from the mainchain, so no modifications of the core client are required, except for the initial implementation of the cross-chain transfer (CCT) protocol and sidechain support. As such, possible security impacts in case of faulty implementation of the sidechain functionalities are bounded inside and limited to the specific sidechain. Sidechains are hosted on Horizen's already available network of Secure and Super Nodes, in a fully decentralized and unfederated model. This system relies on the cross-chain transfer (CCT) protocol, which Horizen is providing. All sidechains employ the same unified cross-chain transfer protocol, which is known to the mainchain.

Sidechains can be created with the programming language and consensus mechanism that best suits your application while retaining the ability to communicate information and value back to the Horizen mainchain’s network and nodes.

For the sidechain consensus protocol reference implementation, the team adopted a modified version of the Ouroboros Praos proof-of-stake protocol. Ouroboros Praos is the algorithm developed by IOHK and will be used in Cardano’s consensus protocol. The collaboration on the implementation follows an official partnership between the two.

For more information, take a look at this article.

Sidechain SDK

As each sidechain is a full blockchain application, it required the implementation of a consensus protocol, network layer, wallet, history, and other pieces. Horizen is providing a Sidechain SDK that addresses most of these aspects and includes all necessary components required for building a blockchain in a single toolbox and allows developers to focus only on the specifics of their blockchain.

ZEN is the network’s native currency and the base layer of the whole ecosystem. The currency is mainly used as an optional privacy-enhanced medium of exchange and powers the Horizen network. The usage of applications and systems built on Horizen, integrated via sidechains, will also require ZEN. Hosting a Secure or a Super Node also requires Horizen’s native currency, as operators need to lock up 42 and 500 ZEN, respectively, enabling them to earn additional ZEN rewards from newly minted coins as a result of the block reward.