Zcash [ZEC], prioritizing privacy with zero-knowledge proofs
Zcash [ZEC] is a cryptocurrency that has exhibited remarkable progress since its launch in 2016. It is a privacy-centric coin which has seen a lot of market action, sometimes trading above $2000. It prides in being the “ the first open, permissionless cryptocurrency that can fully protect the privacy of transactions using zero-knowledge cryptography.” The coin eliminates ways to establish the identity of the user or the payment history.
The company’s privacy policies were once again popularised when J.P.Morgan integrated Zcash to its enterprise blockchain platform, Quorum in May. The big league of the financial industry was attracted by the coin’s zero-knowledge proofs which could be used for building confidentiality of Quorum.
Today’s post is the ultimate, “Guide to Zcash.” From the history of the currency, the price charts, future plans, and other details on how to buy, store and mine it – you can find all that you need to know about Zcash, right here on this page.
Let’s get started.
Zcash at a Glance
According to CoinMarketCap.com, here’s the overview of the coin
- Available since – 26th October 2016
- Token – Zcash
- Symbol – ZEC
- Current Market Value – $195.18
- Market Cap – $859,565,669
- Trading Volume (24h) – $44,976,000
- Circulating Supply –4,403,919 ZEC
- Overall Rank – 21
- Zcash mining is possible with GPU and CPU
What is Zcash? – A Comprehensive Guide
It’s a decentralized, open-source digital currency that allows for shielded transactions. Here, the identity of the sender and receiver and the amount being exchanged is hidden from the blockchain. Additionally, Zcash also has the capability to keep the transaction transparent, so that the details of the trade are visible to everyone on the network.
Unlike other popular digital currencies like Bitcoin, Zcash doesn’t have an open-source community behind it. Instead, it’s run by an American organization.
Zcash was initially started from the Zerocoins project and the first ZEC token was mined on 26th October 2016. Since, then more than 3 million ZEC coins have been mined of a total of 21 million coins.
Why was Zcash Created?
At one point, Bitcoin users felt that the digital currency lacked privacy. This was the sole reason that led to the creation of Zcash. In Zcash, users have control over the privacy features. When initiating a transaction, they have the option to either choose to publish information about the wallet address and the transaction amount to the other nodes in the blockchain or they can withhold this information.
This “selective disclosure” feature of Zcash aims to provide users with the options to comply with tax regulation, anti-money laundering regulations and other audits.
What is the difference between Zcash and Bitcoin?
The aim of Zcash was to improve on the lack of anonymity and other challenges faced by Bitcoin. Zcash is a fork of the original Bitcoin protocol. While the currency is separate and has its own blockchain, the infrastructure of ZEC is built on top of BTC’s core code.
Some of the additions to the underlying code include modifications made to the Proof-of-Work (PoW) consensus model and the addition of zero-knowledge proofs that ensure complete user privacy.
Bitcoin and several other popular digital currencies use private keys to establish the identity of individual users. While it’s true that these keys are cryptographically generated each time and are truly random, the address associated with multiple transactions can over time be associated with a particular private key.
This leaves a paper trail that ultimately leads back to the user. The blockchain of the Bitcoin keeps an immutable record of all the transactions on the network. This record consists of the addresses of both parties, the amount of the transaction – both these pieces of info are accessible to the public.
The blockchain of ZEC on the other hand, contains info that only shows that a particular transaction has occurred. It gives no info about the amount transferred nor the addresses of the sender or recipient.
The Team behind Zcash
The Zcash team is a robust mix of engineers, scientists, mathematicians and advisors. Some of the key players in the team include:
- Zooko Wilcox – Founder and CEO. With over two decades of experience in cryptography, open decentralized systems, and information security, he is known for his work in Mojo Nation, Digi Cash, Zooko’s Triangle and Blake 2. He is also the founder of Least Authority.
- Eli Ben Sasson – a computer scientist.
- Alessandro Chiesa – Faculty of Computer Science at UC Berkeley.
- Christina Garman, Mathew Green, Ian Miers – John Hopkins University.
- Elan Tromor – Tel Aviv University.
- Madars Virza – MIT.
Though the Zcash project is open-source, there is a registered company behind it. The company is known as ZECC (Zerocoin Electric Coin Company) and is run by the founder of Zcash Zooko Wilcox.
How does Zcash Work?
The zk-Snark Protocol
This protocol was developed by cryptographers and researchers at MIT, Tel Aviv University, John Hopkins University and the Technion Israel Institute in 2014. The zero-knowledge proof construction algorithm uses the latest developments in the field of cryptography.
This protocol allows the network to maintain a highly secure ledger, without revealing the transaction amounts or the parties involved in the process. Instead, of making the transaction data publicly available on the network, the transaction values, metadata and spend-authority are encrypted. The zk-Snarks is used to ensure that none of the parties involved in the process are cheating.
Additionally, Zcash also has the feature that allows users to send public transfers, just like that is done in Bitcoin. You can either choose to shield your address or keep it transparent.
For detailed info on the zk-Snark Protocol, check out the website for the ZeroCash project.
How is Zcash Mining Carried Out?
Since, Zcash is based on the Bitcoin protocol it requires mining. A new block on the blockchain is created every two and a half minute and the maximum size of a block is 2MB. This makes it four times as fast as Bitcoin. The amount of ZEC created for each block is 12.5 ZEC.
Once the blockchain reaches 840.000 mined blocks in October 2020, the amount of ZEC for each block will be halved to 6.25.
It uses PoW (Proof-of-Work) algorithm and uses Equihash, that cannot be implemented in ASIC. During the first four years of the mining process, 10% of all ZEC mined will be awarded to the founders of the Zcash project. The reason for this is that they believe that it will ensure continued resources and incentives for the founders to further improve the value of the coin.
How to Mine Zcash?
To get started with Zcash mining, all you need is a computer and dedicated software. The one catch is that the mining software is pretty resource intensive, so you will require a system devoted solely for mining.
If you’re interested in mining Zcash, check out Genesis mining or hashflare.io.
Another alternative option is pool mining. Here, you don’t mine on your own but along with several other miners. As soon as every new block is completed, the reward is distributed among all the miners in the pool based on their hash power.
Where to use ZEC for payment?
Just like Bitcoin, you can use ZEC at vendors who accept this cryptocurrency. The multi-currency wallet, Jaxx that is available for both Android and iOS supports ZEC.
How to Buy ZEC?
ZEC is available for purchase on several leading crypto exchanges like Shapeshift, Poloniex, Bittrex and may more. Depending on the crypto exchange you use, you can buy Zcash directly using fiat currencies like USD, Euro, Yen. Else, you’ll have to initially buy BTC or ETH and then convert it into ZEC.
How to Store ZEC?
Before you build your stash of Zcash, you’ll have to set up some wallet to store it. You can use either the official Zcash wallet or use any other compatible third-party wallets. If you are considering a third-party wallet, look for ones that support hidden addresses, so as to make your transactions anonymous. Some of the popular wallets for Zcash include Ledger Nano S (a hardware wallet), Jaxx Wallet, Cryptonator, Coinomi for Zcash, and Trezor.
The Road Ahead – The Future of Zcash
Zcash presents an interesting alternative to Bitcoin. It overcomes the lack of anonymity of BTC. The zk-Snark protocol is an excellent approach that helps to make Zcash truly anonymous, thereby giving it an edge over BTC.
As more and more governments try to monitor and track their citizens, the demand for anonymous cryptocurrencies like Zcash will see a huge spike. And, this is where Zcash’s real potential lies. And, what more just like Bitcoin, there are only 21 million units of ZEC, thereby making it all the more valuable.
Additionally, the transactions on Zcash are cheaper and faster compared to BTC, thereby making it an excellent investment choice.
Image via Shutterstock
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