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Privacy Coins: Differences Between XMR and ZEC

By gmoney777 | MoneroNews | 19 Dec 2020


In the evolving world of cryptocurrencies, there are growing concerns with protecting one's privacy. To combat this, many privacy networks have been implemented. Currently, the two most popular privacy coins are Monero (XMR) and Zcash (ZEC). However, these networks differ in crucial ways. 

 

Opt-In vs Always On Anonymity

First, all of the transactions on Monero (XMR) are by default anonymous and cannot be public. In comparison, Zcash (ZEC) lets the user choose between public and shielded (private).  You might think that this is not a difference, but statistics on the Zcash network say that only 6% of transactions on the network were opt-in shielded. This seems low, but in fact, this represented a huge increase over historical behavior, warranting significant publicity on channels such as Cointelegraph in May 2020. While this seems fine for the 6% of the transactions that needed to be shielded, this is a problem when 94% of transactions are public and therefore private transactions stand out. Imagine you send 19 transactions publicly, and then send one privately. There will be flags about what that transaction was. In addition, if we look at how Monero blends your transaction with 50 other spoof transactions, then this becomes a problem with finding other transactions to blend your private one with.

 

Privacy and Control

Next, we look at the overall safety of the network. Monero was built so that nobody could get in and you can only move your blocks with your private key. You create one-time keys from this private key to use for transactions, but at the crux, the control lies with the true private keys. If you lose this key, you lose all control over your Monero. With this key, you can do anything you want. However, Zcash has a back-door set up specifically for law enforcement and regulators. That's right - a privacy coin created to avoid oversight over your private transactions also has a function that lets the IRS, SEC, FBI, NSA, CIA  - any and all of the alphabet boys - to get into your wallet and see all of your transactions, shielded or not. In fact, all this shielding does is block ordinary people who don't care anyway from seeing your transactions, but not only reports but gives access to the very same people you are trying to shield your transactions from. With Monero, nobody will ever see who you sent or received Monero from - you are in control.

These differences are critical sometimes misconceptions and sometimes glossed over. But recently the IRS has announced a bounty of up to $625,000 for a technology that seems promising towards trying to decipher Monero. You don't even have to be able to - just convince the IRS that you've got the best guess so far and they will give you $500,000 to start and another $125,000 to keep developing further. This type of bounty doesn't exist for Zcash, as the developers of Zcash were kind enough to create a special door just for them.

 

Network Safety and Mining

Monero and Zcash both do a robust job of ensuring ASIC-resistance and a decentralized mining network. Both coins can be mined profitably using conventional hardware, allowing for more users to participate in and strengthen the network. However, the coins also differ in how mining is rewarded and how project development is funded. With Monero, 100% of the block rewards that are mined go to the miner. This miner may be part of a pool and may have pool fees, but this is independent of Monero. With Zcash, this is not the case. Instead, 80% of the rewards from each block go to the miners, and 20% of the rewards do not. 15% of the rewards go to the founding team and early investors of Zcash, and 5% goes towards future development. However, after much public backlash, this reward expired in November 2020 after running for 4 years. The new system is supposed to award 20% of each block reward for future development, split 7% for the Electric Coin Company (ECC), 5% for the Zcash Foundation, and 8% to support grants for third-party development. However, this does not change anything for the miners, and simply reallocates the Zcash from going directly to the founders.

In addition, there was a peculiar process for creating the "trustless" networks. For Monero, the system has always been trustless. But with Zcash, the original system had to be changed by the founders in a "ritual" that made the system trustless. Of course, this was also with implementing the 15% take for the members of the "ritual" and they conveniently created a back-door for regulators to peer in since the network is artificially amended to be trustless.

 

Conclusion: Same Same, But Different

Overall, there are many similarities with the purposes and functionalities between Monero and Zcash, but there are key differences in how Monero and Zcash anonymize transactions, and who can access the decrypted information. While Zcash is more easily traded, available, and cheaper, it does compromise a few key things that render the privacy features all but pointless.

 


Free Crypto Reference List

Here is a list of sites and apps to get Monero and other cryptos for free.

 

Monero Faucet - http://monerofaucet.info/

Receive free Monero. Please do not withdraw directly to an exchange.

 

Coinbase - https://www.coinbase.com/join/kitche_fo

Receive $10 in Bitcoin (BTC) after making a trade worth over $100.

 

Binance.US - https://accounts.binance.us/en/register?ref=52108645

Binance offers Learn and Earns, similar to Coinbase. 

 

Fold - https://use.foldapp.com/r/LJTAMN4P

20,000 satoshis for signing up and a free daily spinner that pays 100 - 10,000.

 

Quicrypto (Android-only) - https://quicrypto.page.link/b635

Beta phase android app that pays you in your choice of BTC or NANO.

 

BTC Surveys - https://btcsurveys.com/ref/gmoney69

Surveys you can complete for Bitcoin (BTC) that transfers reliably.

 

WeBull - https://act.webull.com/pm/hQhr6GJmlSTZ/q8y/inviteUs/

WeBull offers you 2 free stocks and supports crypto trading.

 

Robinhood - https://join.robinhood.com/grantk206

Robinhood offers you 1 free stock and supports crypto trading.

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gmoney777
gmoney777

I put it all in dog money


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