What is Zcash
Zcash is a decentralized blockchain-based cryptocurrency firmly devoted to ideas of financial privacy and anonymity. The creators call their project the 'https of blockchains' to underline its security properties.
Zcash is the fork of the Bitcoin blockchain, which was launched in October 2016. Zcash can be utilized to buy goods and services, as well as exchanged to other assets, including US dollars, euros, or any fiat or digital currency. Zcash also provides a privacy-oriented solution for businesses, app developers, and point-of-sale providers.
The protocol is governed by the community in a decentralized way through the Zcash Improvement Proposal process (ZIP).
How does Zcash work
Zcash runs on a proof-of-work blockchain that supports shielded transactions. Its main feature is the use of the zk-SNARK technology. In fact, Zcash was the first project to implement this type of zero-knowledge consensus on its blockchain.
zk-SNARK stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge”. This cryptographic approach allows nodes to get proof that transactions are valid without revealing any information about the addresses or values involved. Contrary to other privacy networks, focused more on obscuring transaction data on its ledger, Zcash stores all the encrypted values on-chain. So while all transactions stay confidential, users may selectively share address and transaction data for auditing or regulatory purposes.
Depending on the desired privacy level, Zcash users may choose between two types of addresses on the network: private and public. Private addresses start with z and they don’t reveal users’ balances or transactions history. However, all transactions either public or private appear on the public blockchain, meaning that transaction is known to have occurred and what fees were paid.
Transparent addresses start with a “t” and work just like Bitcoin, where all transactions are publicly visible. The two types of addresses are compatible allowing for the transfer of funds between them. Accordingly, there are four types of transactions possible between these addresses: private, shielding, deshielding, and transparent. Zcash fee is set at 0.0001 ZEC per transaction by default.
From the technology point of view, Zcash looks much like Bitcoin which is only logical since it is based on Bitcoin’s code. Same as Bitcoin, Zcash is secured by the proof-of-work SHA-256 hash function that generates a 256-bit signature.
How to use Zcash?
There are several Zcash wallet systems that can be deployed. Mobile wallets with Zcash shielded support such as Nighthawk, Zecwallet lite, Edge, etc.
Wallets with transparent-address support include Cobo, Coinomi, Exodus, Jaxx, Ledger, and others.
Zcashd and Zecwallet are full node wallets. Such wallets are intended for users wishing to mine Zcash and validate transactions and blocks, in addition to sending and receiving ZEC.
Users wishing to mine ZEC, have to purchase and install a special hardware ASIC (Application-Specific Integrated Circuit). Users may choose to install ASIC directly at their own premises or send ASIC to a hosting site to save the electricity. After creating an account, similarly, users can choose to either mine alone or join the mining pool. The list of pools can be found here.
As the last step, users need to set up a wallet and the corresponding Zcash address to receive the payments. A detailed mining guide can be found here.
Zcash can also be integrated into services, products, mobile applications, etc. There are two approaches to integrating Zcash: the Bitcoin compatible approach, and the Zcash API approach. The Bitcoin-compatible approach will be more convenient for deployments that already use Bitcoin Core, as their application programming interface is almost identical. The detailed installation guide for developers can be found here.
Zcash can be also implemented into Android or iOS, enabling creation of apps and services that can work on the blockchain without downloading an entire copy of the blockchain. An SDK for both systems can be found here.
The Zcash coin ZEC
ZEC is the ticker for the Zcash cryptocurrency, which is the unit of account. Similar to Bitcoin, it has a limited supply of 21 billion coins. New ZEC tokens are issued as block rewards (3.125 ZEC) through the mining process taking place every 75 seconds. The amount of the block reward cuts in half about every four years until all 21 million ZEC are in circulation.
Block rewards are distributed with 80 to 20 ratio between miners and founders represented by "Zcash development fund". The current distribution model was approved by the community and assumes 8% of rewards go to Zcash Open Major Grants, 7% to Electric Coin Co., and 5% to The Zcash Foundation.
How to buy ZEC
The ZEC coin can be purchased on such centralized exchanges like Coinbase, Binance, MEXC global, KuCoin, Gate.io, Gemini, and many more.
Disclaimer
To understand if zCash is a good investment and try to make a ZEC coin price prediction, you need to do your own research on the project.
All the data for research is available on the project page on our website: check out the technical features of the project in this review, try to use the app, see if the information about the team is available and the team is open for communication, and using the project dashboard and the ZEC coin price chart, assess the project usage rates as well as the token price movement and the number of its holders.
Is Zcash safe
Unlike its biggest counterpart, Monero, Zcash is represented by a public team. The project was founded by a renowned cryptographer and privacy advocate Zooko Wilcox-O'Hearn who is now the CEO of Electric Coin Company (ECC) which oversees the development of Zcash. Zooko Wilcox is also the founder and CEO of Least Authority Enterprises.
Another entity that is actively taking part in the protocol development, is the Zcash Foundation, a non-profit involved with the R & D division of Zcash as well as governance and community growth issues. In particular, the Zcash Foundation maintains the project’s Grants program.
Zcash was audited by Coinspect in October 2016, NCC Group in October 2016, Least Authority in August 2018, NCC Group in February 2020, JP Aumasson, Adrien Hamelink (Taurus), Omer Shlomovits (ZenGo) in March 2021 and NCC Group in November 2021.
Ecosystem & Partners
Zcash is determined to make its cryptocurrency a medium of payment. ZEC is currently accepted at more than 39,000 major retail locations, coffee shops, movie theaters, and more. Zcash has integrated with some top cryptocurrency payment providers such as Flexa and Gemini Pay to expand its usage. The full list of vendors who accept ZEC can be found here.
The most recent collaboration involves Electric Coin Co. to unite forces with Protocol Labs, Filecoin Foundation, and Ethereum Foundation in a research of Halo 2 technology and the future of proofs for further Web3 development and scalability progress.
Zcash is funding prominent projects to be built on top of its protocol via the Major Grants Fund curated by the Zcash Foundation.
Zcash was audited by Coinspect in October 2016, NCC Group in October 2016, Least Authority in August 2018, NCC Group in February 2020, JP Aumasson, Adrien Hamelink (Taurus), Omer Shlomovits (ZenGo) in March 2021 and NCC Group in November 2021
What's next
Zcash is preparing the network for its NU5 Upgrade which is expected to launch in June 2022. The core team has provided a detailed schedule on the website.
Links
https://zcash.readthedocs.io/en/latest/
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Last updated: Jun 25, 2022
