By Jeff John Roberts
September 6, 2018

Grayscale Investments, the company behind the Bitcoin Investment Trust, is creating a new fund whose sole focus is on Horizen, a little known platform that hosts a currency called Zen.

The investment is notable because some large institutions rely on Grayscale’s funds to own cryptocurrency, and because of the privacy focus of Horizen.

Grayscale’s investment came through buying $6.3 million worth of Zen tokens. Like seven other funds run by Grayscale (which is a subsidiary of the crypto conglomerate Digital Currency Group), the Zen Investment Trust is mandated to hold a single currency, and sells shares in the trust to investors.

As for Horizen, it’s a privacy-centered cryptocurrency platform that uses a technology called “zero knowledge proofs.” The proofs let users to show a transaction has taken place without revealing any additional information.

These sort of platforms, which also include the more high profile privacy coin ZCash, are best known as a vehicle for anonymous financial transactions. Co-founder Rob Viglione, however, says his goal is to leverage Herizon’s privacy features for services such as messaging and media sharing.

In an interview with Fortune, Viglione said he hopes privacy-conscious organizations will use Horizen for sensitive activities like voting and storing health records.

While plenty of blockchain projects have similar aspirations, Viglione claims Horizen has made a breakthrough in so-called “side chain” technology—a way to process transactions off the main blockchain, and then record them on a primary ledger.

This has the potential to let Horizen scale accommodate large masses of transactions more efficiently than popular blockchains like Bitcoin and Ethereum, which have struggled to scale.

Horizen launched in 2017 as ZenCash before rebranding this summer. The project received a spate of negative publicity in June after hackers successfully launched a so-called 51% percent—basically taking control of a majority of nodes on the network, and using that control to falsify transactions and steal Zen currency.

While 51% attacks represent an existential threat to a cryptocurrency network, Viglione says Horizen rapidly contained the attack and has since updated the network with a new penalty system that makes future such attacks all but impossible.

Grayscale’s decision to chose Horizen as its newest investment vehicle is significant given that the previous trusts it has created involve better known blockchains with higher market value.

According to managing director, Michael Sonnenshein, Grayscale bet on Horizen because the firm believes it has superior technology and a strong team. He also predicts companies using blockchain will pay a premium for privacy-based applications, including file storage.

Horizen’s Zen is currently ranked as the 73rd most popular cryptocurrency. As with other Grayscale products, shares in the Zen Investment Trust will only be available initially to accredited investors because of regulatory constraints. After that they will trade on public markets in the same as shares of Grayscale’s Bitcoin Investment Trust.

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