In the rapidly evolving world of cryptocurrencies, Zcash offers a refreshing focus on privacy and anonymity. Founded in 2016, Zcash employs the advanced zk-SNARK zero-knowledge proof technology, enabling transaction verification without divulging sensitive details. Unlike most cryptocurrencies, which are merely pseudonymous, Zcash ensures true anonymity by concealing transaction amounts and the identities of both the sender and receiver. This enhanced privacy feature sets it apart in a market dominated by more transparent systems like Bitcoin and Ethereum. As regulatory scrutiny on privacy coins heightens, the unique, privacy-centric approach of Zcash continues to attract users who value financial confidentiality.
What Is Zcash (ZEC)?
Zcash is a decentralized cryptocurrency that emphasizes privacy and anonymity. It leverages zk-SNARKs, a cutting-edge zero-knowledge proof technology, allowing nodes to confirm transactions without unveiling any sensitive data. While most cryptocurrencies like Bitcoin offer pseudonymity through public addresses that can be traced using data analytics and blockchain forensics, Zcash takes privacy a step further. By default, Zcash transactions do not display sender and receiver addresses or the transaction amount, offering true anonymity. However, users can opt to disclose this information for auditing or regulatory needs. Introduced on October 28, 2016, Zcash is fundamentally rooted in Bitcoin's original codebase.
Who Are the Founders of Zcash?
Zcash was founded in 2016 by cypherpunk, computer security expert, and entrepreneur Zooko Wilcox-O'Hearn. He is also the founder of the for-profit Electronic Coin Company (ECC), which manages the development of Zcash.
Wilcox-O’Hearn has spent more than 25 years in the industry of cryptography and information security and has contributed to a number of projects, including the now-defunct electronic money firm DigiCash, peer-to-peer data storing software Mojo Nation, and the Tahoe Least-Authority File Store filesystem.
He also founded Least Authority Enterprises, a technology company focused on improving digital security and preserving the fundamental right to privacy, and co-invented the BLAKE3 cryptographic hash function.
What Makes Zcash Unique?
Zcash’s main advantage lies in its optional anonymity, which allows for a level of privacy unattainable with regular, pseudonymous cryptocurrencies like Bitcoin or Ethereum.
ZEC transactions can be sent in two ways: transparent and shielded. Transparent transactions work in about the same way as in Bitcoin, whose codebase Zcash was originally based on: they are sent between public addresses and are recorded on an immutable public ledger (the blockchain). All essential information about these transactions is available online for anyone to see, including the sending and receiving addresses and the amount sent.
These public transactions do not reveal user identities in an overt manner: the only identifiers an outside observer can access from the blockchain are public addresses. However, through the efforts of data scientists and law enforcement over recent years, the methods of blockchain analysis have been developed to the point where an interested party can fairly reliably connect a public address on a blockchain to the real-world identity of its owner, essentially making private transactions impossible.
Shielded ZEC transactions, on the other hand, leverage the technology of zero-knowledge succinct non-interactive arguments of knowledge, or zk-SNARKs, in order to enable completely anonymous transactions to be sent over a public immutable blockchain. The fact that the transaction has happened is recorded on the ledger, but the sending and receiving addresses and the amount sent is not revealed to the public.
This allows Zcash to offer its users the right to privacy while still enjoying the advantages of a decentralized, permissionless digital currency.
How Many Zcash (ZEC) Coins Are There in Circulation?
Overall, Zcash tokenomics is similar to that of Bitcoin: it is a scarce mineable token with a total supply limit of 21 million coins.
New ZECs are created in the form of “block subsidies”: whenever a new block is mined and added to the end of the blockchain, a certain amount of coins is minted and split into “miner subsidy” and “founders’ reward” at a ratio of 80 to 20 percent respectively. The block subsidy is halved at regular intervals to slow down the issuance rate as the total supply of ZEC approaches its limit of 21 million.
The miner subsidy goes to the miner who has mined the latest block and the founders’ reward is distributed between Electronic Coin Company (ECC) founders, Zcash Foundation, and ECC itself, as well as its employees. On Nov. 18, 2020, the block subsidy was halved from 6.25 ZEC to 3.125 ZEC, which was triggered at block 1,046,400. This was introduced under the Zcash Canopy upgrade, which also removed the Founders Reward. Instead, the remaining 20% will be divided among the Major Grants Fund, ECC, and Zcash Foundation, at 8%, 7%, and 5% respectively. The next, and fifth, Zcash network upgrade — Zcash NU5 — is estimated to go live on the testnet on Sept. 30, 2021.
Since launch, there has been substantial interest in the ZEC to AUD and ZEC to EUR price pairs.
How Is the Zcash Network Secured?
Zcash network is secured by the proof-of-work SHA-256 hash function which belongs to the SHA-2 set of algorithms — same as Bitcoin.
Where Can You Buy Zcash (ZEC)?
Zcash is a high-ranking cryptocurrency. It is possible to buy Zcash on a number of major exchanges, some of which are:
Related Pages:
Read about Monero, another anonymous cryptocurrency that uses ring signatures and stealth addresses to improve user privacy.
Check out more crypto educational information on CMC Alexandria.
Find topical crypto stories on CMC’s blog.
Tokenomics and Distribution Model of Zcash
Zcash (ZEC) is a decentralized cryptocurrency that focuses on privacy and anonymity, using the zk-SNARK zero-knowledge proof technology to verify transactions without revealing sensitive information. The tokenomics of Zcash are similar to those of Bitcoin, with a fixed supply of 21 million ZEC units and a block reward of 3.125 ZEC generated every 75 seconds. Every four years, the block reward is halved until all 21 million ZEC have entered into circulation, mimicking Bitcoin's inflation rate.
Zcash transactions are relayed via a public blockchain but do not reveal sending and receiving addresses or the amount being sent by default. However, there is an option to reveal this data for auditing or regulatory compliance. 20% of the block reward is distributed to a Community Development Fund.
Z
By continuing, you will be leaving the Arc Labs AG (“Arc”) website and join a website made available by a third party using Arc open-source software—independent from and unaffiliated with Arc.
Arc does not deploy or run decentralized exchange software for public use, nor does it operate or control any such infrastructure. Arc is not responsible for any action taken or content on the third-party website.
Services and products available through this link are not available to persons who are residents of, are located or incorporated in, or have a registered agent in the U.S., Canada or a restricted territory. More details can be found in our Terms of Use.
By continuing, you will be leaving the Arc Labs AG (“Arc”) website and join a website made available by a third party using Arc open-source software—independent from and unaffiliated with Arc.
Arc does not deploy or run decentralized exchange software for public use, nor does it operate or control any such infrastructure. Arc is not responsible for any action taken or content on the third-party website.
Services and products available through this link are not available to persons who are residents of, are located or incorporated in, or have a registered agent in the U.S., Canada or a restricted territory. More details can be found in our Terms of Use.
By continuing interacting with this web page’s content, you acknowledge that the ARC and stARC tokens are utility elements within the ARC ecosystem, and cannot be considered as investment contracts, securities, or any form of financial instrument under U.S. law.
