What is Zcash (ZEC)?

What is Zcash (ZEC)?

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Zcash is a decentralized cryptocurrency with the main goal of maintaining user privacy and anonymity completely. To achieve this, Zcash makes use of the zk-SNARK zero-knowledge proof technique, allowing network nodes to validate transactions without disclosing any sensitive information about them or the sender/receiver.

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Most cryptocurrencies that are available today are not anonymous. They are more pseudonymous, and while they do not show their users' identities, each user has their own public address or addresses that can be traced back to them using data science and blockchain forensics techniques.

Zcash transactions, on the other hand, must still be relayed over a public blockchain, but unlike transactions in pseudonymous cryptocurrencies, ZEC transactions by default do not expose the sending and receiving addresses or the transaction value. However, this data may be disclosed for auditing or regulatory compliance reasons.

Zcash was published for the first time in 2016 and was initially based on the Bitcoin core.

 

Component Zcash (ZEC)
Technologies zk-SNARKs
Market Capitalization $2.02 Billion+
Open-Source Yes
Consensus Mechanism Proof-of-Work SHA-256
Smart Contracts No
Founders/Authors Zooko Wilcox-O'Hearn
Launch Date 2016
Circulating Supply of Coins 13,455,200 ZEC
Maximum Coin Supply 21,000,000 ZEC
Mining-based Coin? Yes
Is Zcash a Stablecoin? No
Does Zcash have a burn rate? No
Does Zcash have a Whitepaper? Yes, the white paper can be viewed here

 

Evolution and Development of Zcash

Zcash's history began in 2013 when the white paper of Zerocoin was published. The whitepaper for this project was authored by Matthew Green and Eli Ben-Sasson, in addition to a larger group that consisted of many cryptographers and academics.

The authors argued that the architecture of Bitcoin jeopardized user privacy and proposed alternative methods in response. However, the endeavor was not without its drawbacks.

Initially, Zerocoin was built for Bitcoin, which would have demanded a lot of significant network adjustments. Zooko Wilcox-O'Hearn, a cypherpunk, computer security specialist, and entrepreneur, launched Zcash in 2016.

In addition, he also created Electronic Coin Company (ECC), a for-profit organization that manages the growth of Zcash. Wilcox-O'Hearn has been a part of the cryptography and information security industries for more than 25 years, contributing to a variety of projects.

Some of the projects that he worked on include DigiCash, a now-defunct electronic money company, peer-to-peer data storage software Mojo Nation, and the Tahoe Least-Authority File Store filesystem.

He also co-founded Least Authority Enterprises, a technology business dedicated to enhancing digital security and protecting the basic right to privacy. Lastly, he was also involved with the development of the BLAKE3 cryptographic hash algorithm.

  • May 2013 — A John Hopkins University research team presents Zerocoin, a privacy technology created as an adjunct to the Bitcoin network.
  • Jan 2016 — Zooko Wilcox announces the establishment of the Zcash firm and the Zcash project, a Bitcoin-inspired privacy currency.
  • Zcash is launched in October 2016.
  • March 2017 – The Zcash Foundation was established to assist the network's progress.
  • October 2018 – The Sapling update is enabled, enhancing the efficiency of Zcash's cryptography.

 

What makes Zcash unique?

Zcash safeguards users' information by encrypting transaction data with zero-knowledge proofs. This technique lets transactions be validated without revealing precise information about the sender or recipient, such as wallet addresses or the amount being exchanged.

Users have a range of options for sending transactions. They may transfer them anonymously, with no personal information disclosed or openly, like making a Bitcoin or Ethereum payment. Additionally, one party may “protect” just their own personal information.

Zcash coins are fungible, which means that no one token can be identified. This complicates the task of other parties or agencies compiling complete transaction histories.

Because transactions are broadcasted openly on the network, it has not been subjected to the same regulatory scrutiny as other privacy currencies, such as Monero. This has enabled Zcash to be listed on fully compliant cryptocurrency exchanges' servers.

ZCash makes use of a cryptographic technique known as zk-SNARKs, an acronym for Zero-Knowledge Proofs.

This technology enables two users to conduct transactions without disclosing their payment addresses to one another. Additionally, this program obfuscates the payment addresses of both parties and the amount involved in each transaction on ZCash's blockchain, rendering them untraceable.

Because the payment addresses stored on the blockchain are not the real user's address, tracing the flow of any given money to its sender or recipient is almost difficult. This distinguishes ZCash from Bitcoin and other blockchains, which make public the amount moved from one user's actual payment address to another.

The unique technology that Zcash uses assures the following:

  • The verifier gains no knowledge of the data except that it is true or false.
  • The evidence is sufficiently compact that it may be checked in milliseconds.
  • There is no communication between either the verifier or the prover.
  • No prover may compel a verifier to accept fraudulent data.
  • A prover cannot establish information unless there is verifiable data to establish.

 

What are the main uses for Zcash?

Zcash is a peer-to-peer cryptocurrency, which means it is intended for daily usage. Due to its many privacy features, it may also be used anonymously to make and receive transactions.

 

What is the future potential for Zcash?

Most individuals today are aware that neither their data nor sensitive information is secure, especially with technological innovations trying to provide improved user experiences.

Users benefit from security from third-party observation when they utilize privacy coins. Zcash distinguishes itself by allowing users to choose whether they want their transactions to be completely anonymous.

This has made it more appealing to regulatory authorities who have been harsh on pure privacy protocols such as Monero. However, this does not imply complete support for Zcash. Certain exchanges will not list it unless their servers are configured to disable private transactions.

Zcash proponents, and advocates for privacy coins in general, must still convince policymakers that encrypted transfers have a legitimate use.

Historically, the majority of Zcash transactions have been sent publicly. Now, zk-SNARKS consume a significant amount of computer resources and are prohibitively expensive to produce. Sapling's launch will contribute to the efficiency of its privacy features. It may even enable users to send private transactions directly from their mobile devices.

 

Price analysis on Zcash

Zcash was initially launched in 2016, and its price analysis over the past four years are as follows:

 

  2017 2018 2019 2020 2021 to date
ZEC Price High $675.55 $880.76 $114.22 $96.03 $318.92
ZEC Price Low $29.9 $46.47 $26.95 $24.65 $59.22
Market Cap $1.94B $2.65B $783.91M $936.39M $3.74B

 

Price prediction on Zcash

Given Zcash's difficulties since its introduction, many feel the cryptocurrency is ready for a correction at any given point in the future. Other experts were equally positive on the Zcash coin price, with algorithm-based price websites forecasting a long-term increase.

Zcash's price is not predicted to plummet between 2022 and 2025, according to predictions. The cryptocurrency is anticipated to reach $277.92 in 2022 and continue rising for the following five years, reaching an average price of $540.26 in November 2026. In early November 2026, the Zcash price might hit a top of $2,066.

 

Which wallets are the best option for storing Zcash?

The best wallet options for storing, sending, and receiving ZEC are as follows:

  1. Jaxx Liberty
  2. Coinomi
  3. Official ZCash Client
  4. Cryptonator
  5. CoinPayments

 

1. Jaxx Liberty: The Jaxx digital wallet is extremely popular among cryptocurrency aficionados for a long period, and it is another wallet that supports a huge variety of currencies in addition to ZCash. Indeed, the most recent version of the wallet is named the Jaxx Liberty wallet, and it supports the storage of more than 70 digital assets.

 

2. Coinomi: For users who want to have access to their digital assets on the move, the Coinomi mobile digital wallet may be a good fit. Coinomi's mobile wallet, launched in 2014, enables anyone to store and manage ZCash and more than 500 other digital assets directly on your mobile device.

For users who like the mobile app, there is also a comprehensive desktop app that is compatible with Windows, OS X, and Linux.

 

3. Official ZCash Client: The official ZCash wallet enables users to host a complete ZCash node, which means they can contribute to the network's security and mine ZCash if they want to.

Additionally, it enables the transmission of protected transactions, which make them secret. The disadvantage is that users must download the complete blockchain.

 

4. Cryptonator: Cryptonator is a comprehensive multi-asset wallet that is less well-known than the others described above but is still worth investigating.

Cryptonator is an online wallet that also includes an Android app. It supports ZCash in addition to over a dozen other cryptocurrencies. The wallet's primary goal is to be user-friendly and convenient, which it does.

 

5. CoinPayments: CoinPayments is a popular wallet that is used by many people. It is widely regarded as an appropriate wallet for businesses that are starting to accept online payments in cryptocurrency.

The wallet enables users to accept payments in 965 different digital currencies, including ZCash. One of the wallet's most distinguishing qualities is its lightning-fast transaction speed. The wallet leverages BitGo technology to execute transactions much faster than other ZEC wallets.

Best Bitcoin Wallets are the same as Zcash wallets.

Where can you buy Zcash?

 The following popular crypto exchange trading platforms offer Zcash (ZEC):

  1. Gemini
  2. The Rock Trading
  3. Poloniex
  4. Bittrex
  5. EXMO

 

1. Gemini: Gemini debuted in 2015 as a cryptocurrency trading platform designed to cater to both novice investors and experienced traders, offering a variety of purchasing and selling options.

The exchange supports over 40 cryptocurrencies, has a learning center that teaches newcomers all they need to know about cryptocurrency investment and a suite of innovative products that provide additional value for seasoned investors.

 

PROS CONS
The exchange has robust security measures There are high fees charged according to the market price on digital assets
There is a diverse range of crypto assets to choose from The exchange can be challenging to navigate for complete novices
The interface is easy to navigate for beginners  
There are advanced options offered to professional traders  
The exchange accepts clients from the United States  
Users can earn up to 7.4% APY back on their crypto with Gemini Earn  

 

2. The Rock Trading: The Rock Trading Exchange prides itself on being Europe's first cryptocurrency exchange, especially because it has been in operation since 2011.

Since its establishment, the cryptocurrency exchange has allowed traders to purchase and sell bitcoin. The platform provides investors with trading services for digital assets as per the European Union norms and regulations.

 

PROS CONS
The trading platform is extremely user-friendly Unregulated
There is a margin trading option offered There are limited customer support options
The trading costs are low and competitive  
The exchange accepts USD and EUR transactions  
There are professional trading tools offered  
The exchange offers educational material  

 

3. Poloniex: Poloniex's parent firm was founded and developed in the Republic of Seychelles, an island nation. Poloniex is a cryptocurrency trading platform that is legally and officially available, as well as trade-wise accessible, to most countries globally.

Poloniex has an average of 4,872 Bitcoin (BTC) 24-hour trading volume, making it a high liquidity exchange.

 

PROS CONS
The exchange is known for its extremely low trading fees There is a limited selection of fiat deposit options
The platform is user-friendly and multilingual The order book does not support fiat currencies
There is a simple user face on accounts and the order book There are some delays in responses from customer support
Users are provided with a large pool with major crypto assets to choose from Poloniex has been hacked twice
The exchange incorporates a comprehensive trading view charting application  
Users are allowed to apply leverage and they can participate in futures trading  

 

4. Bittrex: Bittrex, established in 2014 by four security specialists, has swiftly grown to become one of the biggest cryptocurrency exchanges, with a daily trading volume of over $1.0 billion.

 

PROS CONS
The exchange is fully regulated and compliant There is no support for fiat deposits or withdrawals
The exchange is secure and there is 2FA for additional security There is no margin trading or lending
The verification process is much faster than with other exchanges order execution can be long because the exchange does not have high liquidity
The fees are competitive Customer support response is slow
The exchange lists more than 250 cryptocurrencies  
The exchange is available in most countries around the world  

 

5. EXMO: EXMO is a dual-purpose cryptocurrency platform that enables both the online exchange and trading of cryptocurrencies. EXMO was founded in 2014 and is mostly based in London.

The site now supports 182 cryptocurrencies and is accessible in more than 200 countries. Its average trading volume exceeds 24 million dollars, making it one of the biggest cryptocurrency exchanges on the web.

 

PROS CONS
The exchange is known for its low fees The exchange does not accept US clients
There are several crypto trading pairs to choose from There is no margin trading
There is 24/7 customer support Deposit and withdrawals can take very long
There are convenient payment options offered  
 You can buy Zcash safely from these cryptocurrency platforms.

Are there criticisms against Zcash?

Yes, Zcash has faced some criticism. However, although ZCash has been attacked for offering a haven for unlawful activities, ZCash is not solely utilized by cybercriminals who conduct illegal transactions on the dark web.

 

What is Zcash’s largest Competitor?

Monero is the largest competitor of Zcash.

Monero is a cryptocurrency project with the original goal of resolving transaction privacy concerns. The initiative makes use of privacy-enhancing technology to guarantee that each transaction is completely private and that users remain anonymous.

In the Monero network, every transaction is fully anonymous. ZCash is equally concerned about privacy but takes a different approach. It enables users to conduct visible transactions or to cloak them fully to ensure their privacy. This is the primary distinction between ZCash and Monero's approach to privacy.

 

What is the Mining Process involved with Zcash?

Zcash validates transactions using proof-of-work, the same consensus method as Bitcoin.

Additionally, it uses the same mining incentive system like Bitcoin. Miners are compensated with tokens for each block they mine, which is half every four years. The miner retains 80% of the prize, while the remaining 20% is divided amongst the founders, investors, and Zcash staff. Additionally, the Zcash Foundation and Zcash Company get a portion.

 

Is Zcash a Good Investment?

ZEC preserves a few of the qualities that give Bitcoin its value and enable it to function as a digital currency since it copied and updated Bitcoin's code.

As is the case with BTC, there will never be more than 21 million ZEC. Additionally, new ZEC coins are created via a process known as mining, in which computers contribute processing power to solve riddles, with the successful computers adding blocks to the Zcash network.

Additionally, Zcash's added privacy characteristics might be claimed to increase its perceived worth. Certain investors consider privacy-focused cryptocurrencies such as Monero and Zcash as a subset of the broader cryptocurrency asset class and thus dedicate a part of their portfolios to this possibility.

The premise is that as the market for cryptocurrencies increases, more users and apps will incorporate or seek out privacy-enhancing alternatives such as the Zcash blockchain.

This bodes well for Zcash and its stakeholders since it has many of the same characteristics as Bitcoin but with additional user-centric advantages.

 

What is the supply and distribution of Zcash?

In general, Zcash's tokenomics are like those of Bitcoin: it is a scarce mineable currency with a 21-million-coin maximum supply.

ZECs are generated by block subsidies, and as soon as a new block is mined and added to the blockchain's end, a certain number of coins are minted and divided at an 80:20 ratio between the miner subsidy and the founders' reward.

The block subsidy is decreased monthly to restrict the pace of issuance when the overall supply of ZEC approaches the 21 million limit.

The miner subsidy is awarded to the miner who mined the most recent block, while the founders' incentive is split between the founders of Electronic Coin Company (ECC), the Zcash Foundation, and ECC itself as well as its staff.

The block subsidy was lowered from 6.25 ZEC to 3.125 ZEC on Nov. 18, 2020, when block 1,046,400 was activated. This was implemented as part of the Zcash Canopy update, which also included the removal of the Founders Reward.

Instead, the remaining 20% will be distributed equally between the Major Grants Fund, ECC, and Zcash Foundation, at 8%, 7%, and 5%, respectively.

 

Is Zcash a viable Alternative Coin?

Yes, Zcash is a good alternative coin.

  • Traceability – Zcash guarantees completely anonymous transactions that cannot be traced.
  • Hacking – Zcash has not experienced any recent security breaches.
  • Security – Zcash uses some of the most robust technology to ensure complete security and anonymity.
  • Technology – The project uses innovative technology to ensure the complete anonymity of transactions.
  • Potential Investment – Projects such as Zcash have a lot of potential as an investment because of their unique technology
  • Popularity – Zcash is one of the most popular privacy coins in the cryptocurrency market
  • Future Uses – Because of its technology, Zcash has many future uses.

Any cryptocurrency that isn't Bitcoin is referred to as an altcoin.

What are the differences between Zcash and Bitcoin?

With Bitcoin, users can see a coin's whole history and the balance of a single user's wallet. While users cannot directly link personal information to any of these products, a forensic analysis may reveal a user's genuine identity. This distinguishes Zcash from Bitcoin.

Zcash employs “Ak-SNARKS,” a proof that lets one party verify to another that a proposition is true without disclosing any specifics. This avoids duplicate spending and protects the user's identity.

Zcash also includes optional privacy settings for further security. Another major distinction is that Zcash has a founder’s award, with investors, advisors, and staff receiving 10% of each incentive.

Bitcoin and Zcash employ distinct proofs of work. Zcash employs the Equihash algorithm, which is not compatible with ASIC mining rigs like Bitcoin. Instead, Zcash depends on RAM, rendering ASIC unsuitable.

 

  Bitcoin Zcash
Price change 20/21 +400% +130%
Market Cap $800 Billion+ $2.02 Billion+
Past Hacks None None
Popularity Very High Very Low
Altcoin Rank #1 – Original Crypto #69

 

What are the differences between Zcash and Ethereum?

Both Zcash and Ethereum are blockchain-based digital assets. Nothing else unites these two payment networks. Compared to Bitcoin, Zcash offers more security, while Ethereum is increasingly becoming the “operating system” for apps.

Ethereum is a decentralized platform that runs smart contracts, which are programs meant to avoid censorship, downtime, third-party intervention, and fraud.

 

  Ethereum Zcash
Price change 20/21 +880% +130%
Market Cap $460 Billion+ $2.02 Billion+
Past Hacks None None
Popularity Very High Very Low
Altcoin Rank #2 #69

 

What are the differences between Zcash and Dogecoin?

Zcash usefulness is inferior to Dogecoin. However, soon, Zcash's usefulness will certainly surpass Dogecoin's. Sending ZEC coins tends to be twice as cheap as transactions with DOGE.

It also confirms transactions three times quicker. Sovereign wallets enable Zcash and Dogecoin, reducing reliance on the main development team for upgrades and security. Many online shops now take ZEC and DOGE.

 

  Dogecoin Zcash
Price change 20/21 +7,300% +130%
Market Cap $22 Billion+ $2.02 Billion+
Past Hacks None None
Popularity High Very Low
Altcoin Rank #12 #69

 

What are the differences between Zcash and NEO?

Global financial markets refer to the NEO cryptocurrency as a “smart generation economy currency.” NEO is a cryptocurrency that was launched in 2014. Zcash is a digital currency that, when compared to other digital currencies now available on the financial market, provides a high degree of secrecy via the use of digital methods.

 

  NEO Zcash
Price change 20/21 +160% +130%
Market Cap $1.70 Billion+ $2.02 Billion+
Past Hacks None None
Popularity Medium Very Low
Altcoin Rank #69 #69

 

What are the differences between Zcash and NFTs?

Nonfungible tokens (NFTs) are digital assets that each have a unique value, with no two NFTs holding the same characteristics or value as another. Zcash, on the other hand, is fungible, which means that one ZEC has the same value and characteristics as another ZEC.

 

What are the differences between Zcash and Solana?

Solana is typically more useful than Zcash and is likely to keep that advantage far into the future. Both Solana and Zcash are supported by sovereign wallets, removing them from the main development team's control on upgrades and security.

SOL and ZEC are both commonly accepted at a growing number of online shops nowadays. When compared to Zcash, Solana's inflation rate is twice as low. Whereas Zcash does not provide staking, Solana's staking provides yearly returns of 7%.

 

  Solana Zcash
Price change 20/21 +9,300% +130%
Market Cap $54 Billion+ $2.02 Billion+
Past Hacks None None
Popularity Very High Very Low
Altcoin Rank #5 #69

 

What are the differences between Zcash and Monero?

When comparing Zcash vs. Monero, one of the most crucial factors to look at is how they keep their transactions private. Instead of having to choose between visible and shielded transactions on the Monero network, Zcash users may do both.

While both Bitcoin and Zcash allow anonymous transactions, Zcash also allows “regular” crypto transactions. Both networks efficiently permit anonymous transactions for any purpose.

The more popular Monero has a greater 24-hour transaction volume. On the dark web, the network is known for being utilized in illegal online transactions.

 

  Monero Zcash
Price change 20/21 +40% +130%
Market Cap $4.1 Billion+ $2.02 Billion+
Past Hacks None None
Popularity Medium Very Low
Altcoin Rank #44 #69

 

What is a privacy coin?

A private cryptocurrency coin hides its users' identities and other transactional data. Privacy coins usually work in one of two ways. Those focusing on anonymity conceal the names of those involved. Transparency prevents humans or computers from tracking a transaction trail.

To fulfill these two aims, most privacy coins use one of three major tactics. The most common complaint of privacy coins is that they attract criminals. In the last several years, privacy coins have been used to fund terrorists, launder money, and handle funds for other criminal operations.

But privacy coin supporters demand transactional privacy. There are several reasons why someone may wish to keep their transactions secret, such as shielding their riches from cybercriminals or not disclosing how they spend their money.

 

Which other cryptocurrencies are classified as privacy coins?

Apart from Zcash, the following are some of the most popular privacy coins in the crypto market:

  1. Bytecoin (BCN)
  2. Monero (XMR)
  3. Dash (DASH)
  4. Verge (XVG)

 

1. Bytecoin (BCN): Bytecoin is the first private, untraceable currency which is built according to CryptoNote technology. CryptoNote was designed to make transactions untraceable and unlinkable.

Untraceable implies that no one can know who submitted a transaction to a given receiver, whereas unlinkable indicates that no two transactions came from the same source. Ring signatures provide untraceability.

Due to the ring signatures, spectators cannot see who sent, how much, or who received the transaction. Ring signatures simply chain transactions together, making it harder to tell them apart.

 

2. Monero (XMR): Monero is a private cryptocurrency like Bytecoin that aims to provide complete privacy. XMR is a BCN hard fork, and Monero uses the same privacy technology as Bytecoin and shares many of its characteristics.

 

3. Dash (DASH): DASH, launched in 2014, is a cryptocurrency that lets users select whether their transactions are anonymous as well as private. This helps users to stay within their country's regulatory guidelines.

The feature hides the source of the user's cash. Using the private transmit functionality significantly increases the transaction charge. DASH does this by using a decentralized network of computers called master nodes to mix data.

 

4. Verge (XVG): DogeCoinDark was founded in 2014. Like Dash, DogeCoinDark renamed itself Verge immediately after launch. Verge employs the Wraith Protocol to secure transactions. Wraith Protocol anonymizes Tor Network transactions.

The Tor Browser hides IP addresses by routing internet connections across many anonymous nodes worldwide. Wraith Protocol employs this innovation to protect bitcoin users' privacy. This is an optional feature.