When Bitcoin came to life about a decade ago, the early adopters believed it would be the ultimate transaction solution replacing the paper money we know today. No one probably thought that the breakthrough would end up creating countless cryptocurrency projects.
While many crypto projects are ambitious and aim to outdo fiat currencies, some have special features that give them a unique use case. An example of this is Zcash. Zcash is a cryptocurrency that offers transaction privacy.
The transactions on Bitcoin are not private. This non-privacy feature is seen as a flaw by some who believe transactions should at least have the option of being private. This led to the fork of the Bitcoin blockchain in 2016 that produced Zcash.
What Does Zcash Do?
Zcash is similar to Bitcoin in that transactions are posted on a public blockchain. However, privacy is ensured as personal and transaction data is kept confidential. This is made possible through zero-knowledge proofs. This allows transactions to be verified without any information about the sender, receiver, and the amount transacted.
It is possible to disclose some transaction data at the user’s will through Zcash features known as ‘viewing keys’ and ‘payment disclosure.’ This makes transactions on Zcash auditable and regulation-compliant.
The private address that involves shielded transactions is known as z-address (the wallet address starts with a ‘z’). The other address that allows transparent transactions is known as t-address (the wallet address starts with a ‘t’).
There are 4 basic types of transaction on Zcash. The first is a transaction from a z-address to a z-address. This is known as a private transaction.
The second is known as deshielding, where a transaction is from a z-address to a t-address. This simply means that the sender’s information is kept private (or shielded) while the receiver’s information is public on the blockchain.
The third is referred to as shielding, as a transaction is from a t-address to a z-address. In this case, the sender’s information is public but the receiver’s information is private.
The purpose of the second and third types of transaction is to give the users privacy options regardless of the privacy choice of whomever they are transacting with.
The fourth is known as a public transaction where both the sender and receiver are t-addresses.
The specific zero-knowledge proofs Zcash uses for its private transactions is known as zk-SNARKs.
Zk-SNARKs stands for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. This is a model that allows one party to prove the possession of an information to another party without revealing that information. The verification of this zero-knowledge proofs can be done in a few milliseconds.
Zcash uses Equihash memory-hard Proof-of-Work algorithm. This algorithm is known for its ASIC-resistance, security, and privacy. The ASIC-resistance prevents the mining process from being centralized. The memory required to mine Zcash is more than what most cryptocurrencies require. However, the algorithm allows for quick verification.
The Zcash block time is 2.5 minutes. Transactions on the Zcash blockchain can be seen on Zchain (the official Zcash block explorer).
History of Zcash
The origins of Zcash can be traced to 2013. A project known as Zerocoin was created to address the privacy problem of Bitcoin. The project was led by Matthew Green, Ian Miers, Christina Garman, and Aviel D. Rubin, who were at John Hopkins University.
This evolved into a collaboration with MIT, The Technion, and Tel Aviv University in 2014. Initially, the project was designed to be an ‘add-on’ to Bitcoin, but with the new advancement, it became a cryptocurrency of its own known as Zerocash.
The transition of Zerocash to Zcash started building up when the Zerocash team began collaborations with Zooko Wilcox and his team from Least Authority. The collaboration was publicly expressed for the first time in 2015, and in October 2016 the Zcash blockchain was ready to be launched.
Zcash was launched on October 28, 2018, by the company known as Zerocoin Electric Coin Company. The company does not claim to control the cryptocurrency; instead, all users are viewed as contributors to the decentralization of the network.
Zcash also has the Zcash Foundation which is different and independent from the company. The purpose of the foundation is to provide internet payment and privacy infrastructure for the public.
The Zcash team is lead by the Founder and CEO, Zooko Wilcox.
Key members of the team include Nathan Wilcox (CTO), Andy Murray (CFO), David Campbell (COO), and Benjamin Winston (Director of Product Security).
The entire team is made up of 30 members which include engineers, web developers, business developers, designers, as well as marketing, legal, and financial personnels.
Zcash has some well-known names in the crypto world as advisors on the project. Zcash advisors include Gavin Andresen of the Bitcoin Foundation, Vitalik Buterin (Co-founder of Ethereum), Arthur Brietman (Tezos), Joseph Bonneau, Gordon Mohr, and Brian Warner.
Roadmap and Achievements
Zcash has witnessed some significant achievements since its launch. Some of these include payment disclosure, payment offloading, core circuit improvements, and more. Details about the development of Zcash thus far can be seen in this analysis of Zcash.
In 2018, the goal was to improve Zcash’s performance, usability, and security using the new sapling cryptographic technology. On August 16, 2018, Zcash announced the release of the first sapling-compatible version of the Zcash node software known as Zcash 2.0.0. This is in anticipation of the first sapling block which will be mined on October 29, 2018.
The current roadmap schedule for Zcash is shown below:
Competition and Challenges
The strongest competitor of Zcash is Monero. Although both coins are different in their own ways, they belong to the same classification as privacy coins. There are other privacy coins that show promise such as Dash, PIVX, and Enigma.
Privacy coins have a challenge with financial regulations. While there is the case to keep transactions private, the inability of regulatory bodies to track the funds is a compromise they are unwilling to tolerate. This will make mainstream adoption complicated for privacy coins.
Zcash Coin (ZEC)
The Zcash coin is currently the 21st largest cryptocurrency by market cap. It has a fixed total supply of 21 million (just like Bitcoin), however, only about 4.9 million is currently in circulation.
The price of Zcash was as high as $876 in January 2018 but currently at about $116 (as the effect of the bear market has taken a toll).
Zcash is available for trading on several exchanges which include Binance, Bithumb, Kraken, Gemini, and Bittrex. Earlier in the year, Coinbase announced Zcash as one of the cryptocurrencies being considered to be listed on the platform despite its privacy features.
Storage of cryptocurrencies is important as they are delicate and can easily be lost forever by just one mistake. Zcash has its own blockchain, hence its coins must be stored in a wallet that supports its blockchain.
The Zcashd wallet is built for Linux and capable of shielded payments and transparent address multisig. Compatible hardware wallets include Ledger and Trezor. Other Zcash-compatible hot wallets include Exodus (desktop), Coinomi (mobile), Jaxx (mobile, desktop, web), Bitgo (web), Guarda (mobile, desktop, browser), Mobi (mobile, web) and WinZec.
Blockchain technology is expected to meet today’s challenges, but it is designed to meet the demands of the world of tomorrow. While privacy transactions may not appeal to many today, the possibility of it being a vital part of the future cannot be overlooked.
Zcash is not just another privacy cryptocurrency, but one that respects the freedom of the individual by granting the ability to choose between privacy and transparency for each transaction. This flexibility is hoped to be the driving force behind the use of Zcash.
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