ZCash 101: The Ultimate Anonymous Privacy Coin?

ZCash 101: The Ultimate Anonymous Privacy Coin?


The further you delve into the cryptocurrency world, the more and more you will become concerned about the importance of privacy. And if you’re reading this article, it’s probably because you already have questions about the privacy and security of different coins available. This article discusses one of the arguably most secure coins currently on the market, a coin known as ZCash.

What is ZCash?

ZCash is considered to be one of the best privacy coins on the cryptocurrency market, rated right there at the top with Monero. ZCash was invented by a number of highly regarded cryptographers and is based on scientific research from a number of top universities. ZCash was released to the market in October of 2016 and as of the writing of this article one ZCash coin costs about $58 USD with a finite market cap of 21 million coins.

Why ZCash?

One of the major reasons people love Bitcoin is because it is decentralized, and each transaction is posted to a ledger which everyone can see. But this ledger, which makes the coin unable to be owned by any single entity, also causes issues as anyone can see your transaction posted on this ledger.

 

699537a433ed455d4eeb0eaa8fe29765dbf4d60b5842443cdfec24181addfeaf.jpeg

 

The main function of ZCash is that the coin runs on similar technology to Bitcoin (with a similar market cap) but without the transparent ledger. Wallet addresses are encrypted on both ends, so although your transaction will still show in the ledger, it will not show who sent it, nor who received it. However, if you are enacting a transaction which needs some sort of verification, there are features which allow you to decide what you will disclose and to whom. These two types of transactions are given two separate names t-addresses (for transparent addresses) and z-addresses (for private or non-disclosed addresses). These two types of addresses and interoperable and you can send from a t-address to a z-address and vice versa. ZCash also supports multi-signature transactions as well as transactions which expire if not enacted.

How Does It Work?

ZCash allows transactions to be encrypted and essentially private by using zero knowledge proof technology, which basically means transactions can be validated without exposing any information about the sender nor receiver. This verification process is quick, and non-interactive, meaning that the proof which is requesting to be verified as singular in nature and doesn’t require a response. The short hand abbreviation for this technology is zk-SNARKs or “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.”

Problems with ZCash

This all sounds so great that you’re probably wondering why isn’t everyone out there using ZCash? And although it sounds like a perfect technology, ZCash has a lot of kinks to still work out in the system. The number one issue being, that although numerous exchanges and wallets accept ZCash, a number of them only allow for the t-addresses and not the z-addresses, which defeats the purpose of owning ZCash for most people. Not only that, but if you really delve into the technology this coin is based off of (specifically the proof generator) someone could make a whole bunch of false proofs and get the verified, effectively stealing coins. ZCash has a number of barriers to ensure this doesn’t happen, however it is still a risk and is openly discussed on their website. Also, another small caveat is the built in 20% founders fee, which if you ask most coin enthusiasts, seems a bit steep. However hard core ZCash supporters will tell you this fee is necessary to keeping the coin superior and secure as well as maintaining the best developers.

 

b8f5b90985c36940c75db1e19e7e1192370f8dcda0ab15af5a8429849cd5e53d.jpeg

 

ZCash Forks

Unsurprisingly, just like most other cryptocurrencies on the market, ZCash has been affected by numerous forks. The most recent fork occurred on July 16th, 2020 and it was a hard fork which resulted in Heartwood. Heartwood is a coin very similar to ZCash but in addition to private transactions, offers a private mining experience. Prior to Heartwood, the last hard fork for ZCash was in December 2019 when the coin hard forked to produce Blossom. Both Blossom and Heartwood are network endorsed upgrades by the ZCash foundation and thus it is relatively easy to upgrade your coins—simply follow the ZCash user guide. ZCash has also experienced two other forks to their technology Sapling and Overwinter, which are both considered to still be part of the ZCash coin.

Besides just the above listed forks, ZCash has experienced numerous other forks which have resulted in new altcoins entirely. The first of which ZClassic, was subject to a fork of its own later on, resulting in two additional altcoins. Bitcoin Private, ZenCash, and Komodo Coin are all altcoins which originated on ZCash technology. And this isn’t the end of forks for the ZCash coins, in fact the developer site claims to always be upgrading the technology and thus we can expect to see many more forks in the future.

Uses for ZCash

If you’re looking to invest in a cryptocurrency with a high use case, ZCash probably isn’t the coin for you. It’s not popular enough of an altcoin to be accepted by most websites. Also, a number of cryptocurrency traders don’t deal in the coin because of some of the issues listed above. ZCash is a great coin for private transactions, but keep in mind, what is generally considered illegal to do with paper money, is also illegal to do with cryptocurrencies.

But if you’re looking for a private investment, it’s definitely worthwhile to consider investing in ZCash. With a finite supply but technology that is always upgrading, its likely to retain, and increase in value over the long run. Since its inception it’s had its highs and lows just like any altcoin, however it has remained quite steady in the $30-$50 range for almost two years now.

Just be aware, if you do decide to invest in ZCash, or any altcoin for that matter, it doesn’t come without risk. And it’s always advised to discuss your financial decision with someone you trust before putting your capital at risk.

 

This article was brought to you by the anonymous Bitcoin casino MintDice. Originally posted on MintDice.com.


MintDice.com
MintDice.com

https://mintdice.com - The World's Best Bitcoin Casino Dice & Bitcoin Slots


Bitcoin News Blog & Bitcoin Dice Casino News
Bitcoin News Blog & Bitcoin Dice Casino News

MintDice.com - Bringing you the best Bitcoin news today and cryptocurrency news. Also providing top quality gambling news and casino news to keep you up to date with Bitcoin dice games and free online slots.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.