ZCash is a cryptocurrency with great emphasis on anonymity. The decentralized blockchain network is similar to Bitcoin in many regards. Utilizing the Proof of Work consensus algorithm, as an open source network, ZCash has no access restriction based on demographic. However, unlike Bitcoin, all transactions are shielded in order to achieve maximum privacy and freedom.
A True Private Coin
ZCash was found in 2016 by Zooko Wilcox-O’Hearn in an effort to create an open source financial system with great emphasis on privacy.
Bitcoin took the world by the storm with innovative blockchain technology and promising features that proved to be revolutionary. However, as the king of the cryptocurrency realm, one must not forget that the blockchain is not perfect. Initially thought to be completely private, the Bitcoin blockchain turned out to be less secure in terms of protecting user data. Despite the cryptographic nature, all transaction on the blockchain are fully traceable with absolute transparency. This was an effort to reduce fraudulent activities on the network. In that regard, as we have seen before, utilizing numerous tactics, governments, organizations and even individuals have the ability to breach privacy of the others. This strategy turned out to be an apparatus for legal actions against users, ultimately reducing the fungibility.
Enter the ZCash. Maintaining many of the utilitarian structural characteristics of Bitcoin, ZCash built upon the Bitcoin blockchain. But this time, they turned the privacy up to eleven.
Zero Knowledge Proof
To put it simply, all transactions made on ZCash network are first encrypted then recorded on the blockchain. However, they transactions are not transparent to the public. Only users who have been given access can see the encrypted transaction data. And that is only one specific transaction and no the others.
This privacy is achieved thanks to the zk-SNARKs cryptographic technology that stands for zero knowledge of Proof. Essentially, this technology allows both parties to make the transaction without revealing their payment addresses to one another. And to seal the deal, this tool allows the ZCash blockchain to make it impossible for anyone to trace the addresses and the amount of transactions.
ZCash and Other Privacy Coins
Many other privacy coins like Monero utilize private keys for each party in order to make transactions. Both parties have a public address that is their identity much like an IP address. By using the private key, they gain access to the funds in the transactions. But here is the catch, these addresses remain unchanged and they are revealed to the other party in the transaction. Subsequently, the seller can track previous transactions using the public address of the buyer. Furthermore, the seller can reject payment for any reason at that point. This method of relying on private keys is definitely successful in terms of protecting private information. However, providing a knowledge of public addresses to the seller does in fact reduce fungibility in the long run.
Zcash seems to be utilizing a more efficient and secure strategy to achieve absolute privacy.
Zcash Coin (ZEC)
ZEC is a mineable cryptocurrency. Like Bitcoin, it has a total supply of 21 million and approximately 12.8 million currencies mined so far. It takes 75 seconds to create a new block on the network. In that regard, ZCash is about eight times faster than Bitcoin for mining.
ZEC is Currently the 73rd cryptocurrency by market cap and priced around $114. It is currently on the list of Grayscale assets but the requirements and fees to make the investment are difficult.
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