Zcash is a decentralized cryptocurrency that utilizes advanced cryptography to enhance security and privacy through its use of shielded addresses. It was developed using open-source code similar to that of Bitcoin.
Key Takeaways
- Zcash (ZEC) is a cryptocurrency that provides enhanced privacy and security for its transactions.
- Transactions on the Zcash blockchain can either be “transparent,” in which the sender, receiver, and transaction amount are publicly visible, or “shielded,” in which all of this information is kept private.
- Zcash is based on the Bitcoin codebase, but its use of zk-SNARKs allows for increased privacy and security.
Zcash prioritizes anonymity through the utilization of zk-SNARKs, a zero-knowledge proof technology that enables blockchain network nodes to validate transactions without revealing transaction metadata of users. This is made possible by using a set of public parameters that allow for the creation and verification of private transactions.
How does Zcash work?
Zcash is a digital currency that prioritizes privacy by using complex mathematics and computer science to provide high-level security. It allows for efficient, easy, and low-cost transactions. To ensure additional privacy, Zcash has shielded transactions that keep personal information private.
Zcash addresses can be either private Z-addresses or public T-addresses, the level of privacy of a transaction depends on the type of address used and to which type it’s sent.
Z-to-Z transactions are visible on the public blockchain, but the addresses, transaction amounts, and memo fields are encrypted and not publicly available. Information can be shared with trusted parties through the use of view keys and payment disclosure.
Z-to-Z transactions in Zcash are made possible through the use of Zero-Knowledge Proofs, also known as Zk-SNARKs. These cryptographic proofs enable fully encrypted Zcash transactions on the blockchain while still ensuring their validity. By allowing users to prove possession of certain information, such as a secret key, without revealing it or requiring additional transactions, Zk-SNARKs facilitate private transactions.
In contrast, T-to-T transactions in Zcash work similarly to Bitcoin, with all transaction details made public. Zcash addresses of both types can be used interchangeably, and funds can be transferred between them. More information on cross-wallet transfers can be found in Zcash’s official guide.
Zcash vs. Monero
Monero is an altcoin based on Bytecoin, which was first released in 2014. Monero prioritizes privacy by implementing it as a fundamental aspect of its protocol, making it automatic and non-optional. It uses ring signatures to obscure the identity of participants in a transaction, RingCTs to hide transaction amounts, and stealth addresses to generate unique one-time keys. Cryptographic bulletproofs, similar to zk-SNARKs, are also employed to make transactions untraceable and unlinkable, protecting the privacy of both the sender and receiver.
Monero has an adaptive block size, which allows for faster transaction processing and greater scalability compared to Zcash. The fee structure is determined by the user, with higher priority and larger transaction sizes resulting in higher fees. However, the use of bulletproofs can reduce the size of transactions, which in turn reduces fees. Monero fees tend to be higher than Zcash’s standard fee of 0.0001 ZEC, as well as any additional fees charged by the host platform.
Zcash vs. Bitcoin
The Bitcoin community values transparent transactions while providing anonymity for its users. However, it is still possible for those with a stake or interest in a transaction to trace the parties involved. In contrast, ZCash uses encryption to protect transaction information and make it untraceable. The ZCash blockchain employs the security protocol zk-SNARK for added user security and anonymity.
Bitcoin uses the SHA-256 hashing algorithm, while ZCash uses Equihash, which is not compatible with the hardware and software used for Bitcoin mining. Additionally, ZCash has larger block sizes and increased hashing times, resulting in a higher network hash rate, which measures the speed of the network to validate and verify transactions to open a new block.
Zcash Development
In 2013, Johns Hopkins University professor Matthew Green and his graduate students proposed the development of Zcash, then known as “Zerocash.” Initially intended to be a privacy extension to Bitcoin, but due to a lack of support from the core developers, the team decided to build Zcash as a standalone coin using the original Bitcoin codebase.
Zcash, launched by the Electronic Coin Company (ECC) on October 28, 2016, was developed by Zooko Wilcox-O’Hearn, a cryptography and information security expert, along with professors and researchers from John Hopkins University, MIT, Tel Aviv University, and Technion. The ECC, formerly known as Zerocoin Electric Coin Company, LLC, raised $3 million in funding.
Wilcox-O’Hearn has also been involved with Digicash, Mojo Nation, and the Tahoe Least-Authority File Store filesystem and co-invented the BLAKE3 cryptographic hash function. From 2016 to 2018, Zcash released the “Sprout Series” with two core protocol upgrades, Overwinter and Sapling.
The Zcash Foundation was established in March 2017 with an initial endowment of 273,000 ZEC. Network upgrades Blossom, Heartwood, and Canopy were carried out in December 2019, July 2020, and November 2020, respectively, with the latter halving the miner’s rewards from 6.25 ZEC to 3.125 ZEC and doing away with the “Founders Reward.”
Zcash FAQ
What is a Privacy Coin?
A privacy coin is a cryptocurrency that is designed to protect the privacy of its users by obscuring the details of transactions on the blockchain, such as the identity of the sender and receiver and the amount being transferred.
Who are the founders of Zcash (ZEC)?
In 2013, Matthew Green, Ian Miers, and Christina Garman from Johns Hopkins University introduced Zerocoin, a proposed privacy extension for Bitcoin. However, due to a lack of community consensus and a desire for faster progress, the team assembled additional scientists to develop a standalone protocol, Zcash.
The Zerocoin Electric Coin Company, later renamed Electric Coin Company, was established in 2015, with Zooko Wilcox-O’Hearn as its founder, to help develop and launch the protocol.
In 2017, the Zcash Foundation was established to ensure the ongoing development and maintenance of the network.
What makes Zcash (ZEC) unique?
Zcash is a cryptocurrency that prioritizes privacy, unlike most other cryptocurrencies that record transactions on a public blockchain. It is a common misconception that all cryptocurrencies are private and untraceable, but in reality, many transactions are traceable through the public record of wallet addresses and amounts.
Privacy coins, like Zcash, allow users to shield their wallet addresses and transaction amounts to maintain anonymity. Unlike many other privacy coins, Zcash also has the option of public transactions, allowing Zcash users to make their wallet addresses and transaction amounts public.
How is the Zcash network secured?
Zcash uses a proof-of-work consensus mechanism to secure its network by having miners solve difficult puzzles to produce blocks. This mechanism is used exclusively and ensures that all nodes and miners on the network agree on the order of blocks, maintaining the integrity of the network’s information. Additionally, this mechanism requires malicious actors to control a significant portion of the network in order to launch a successful attack. The purpose of proof-of-work is to maintain and grow the blockchain, and miners are incentivized to continue this work through rewards. However, due to disagreements in development and the roadmap, forks like Ycash have occurred.
How do I mine Zcash (ZEC)?
- Obtain a Zcash wallet: You will need a wallet to store the mined Zcash. You can choose to use a software wallet or a hardware wallet, depending on your preference.
- Join a mining pool: Joining a Zcash mining pool allows you to combine your computing power with other miners to increase your chances of solving a block and earning rewards.
- Download mining software: There are several mining software options available for Zcash, such as Claymore and EWBF. Choose the one that is compatible with your operating system and mining hardware.
- Configure mining software: Once you have downloaded the mining software, you will need to configure it to connect to your mining pool and set up the settings for your mining hardware.
- Start mining: Once the software is configured, you can start mining by running it and letting it run in the background.
- Monitor progress: You can monitor your mining progress by checking the mining pool’s website or using the mining software’s built-in monitoring tools.
- Receive rewards: Once a block is solved, you will receive a reward for your work, which will be deposited into your Zcash wallet. Zcash price is determined by its market cap and circulating supply.
Please note that mining Zcash or any other cryptocurrency requires powerful computer hardware and high electricity consumption, so you should consider the costs before starting mining.