Zcash (ZEC): key features, prospects and development of anonymous cryptocurrency

What is Zcash? The history of the creation of cryptocurrency

Zcash is the first private token to use a new form of the zk-SNARK cryptographic scheme, which was created based on the open written code of Bitcoin on the ZPCash blockchain algorithm.

Well-known entrepreneur and crypto investor Steve Waterhouse has unveiled a clear example of comparing two cryptocurrencies. He said: “If Bitcoin is an Internet protocol like http, then for Zcash, the secure protocol will be https, with an advanced level of data encryption for absolute user security.”

Zcash was developed and released in 2016 by the Electric Coin Company, a commercial organisation led by enthusiast Zuko Wilcox. The young and ambitious guy watched the popularity of Bitcoin for a long time, but there were some moments that confused him. He turned his attention to the fact that all financial transactions with the fate of Bitcoin were in the public domain for any user, as a result, this was a considerable risk and lack of security, as such. Anyone who knew your bitcoin wallet address could see how much money it has and other additional data. Zuko understood that if confidential information fell into the hands of scammers, then this could end badly. Therefore, he developed the Zcash algorithm, which excludes the entry of data about your transactions to a third party. The developer copied the outgoing cipher of Bitcoin and improved it, making it faster and more reliable.

Zcash was developed and released in 2016 by the Electric Coin Company, a commercial organization led by enthusiast Zuko Wilcox. The young and ambitious guy watched the popularity of Bitcoin for a long time, but there were some moments that confused him. He turned his attention to the fact that all financial transactions involving Bitcoin were in the public domain for any user, as a result, this was a considerable risk and lack of security, as such. Anyone who knew your bitcoin wallet address could see how much money it has and other additional data. Zuko understood that if confidential information fell into the hands of scammers, then this could end badly. Therefore, he developed the Zcash algorithm, which excludes the entry of data about your transactions to a third party. The developer copied the outgoing cipher of Bitcoin and improved it, making it faster and more reliable. 

Zk-SNARK Technology for ZEC Cryptocurrency

Zk-SNARK stands for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. This is a short closed block with complete non-disclosure, which allows users to exchange information among themselves, while not disclosing their person.

The idea of non-disclosure was developed in 1980 by scientists from the Massachusetts Institute of Technology. He sets out the circumstances when it is possible to confirm a financial transaction without a password.

The Zcash cryptocurrency stands out from other cryptocurrencies in that it uses a non-disclosure cryptography scheme, the so-called zero knowledge (permission). As a result of complete confidentiality, the ability to track transactions and other exchange transactions, such as zcash to usd, is excluded. Thanks to this concept, users are protected from fraudulent activities.

ZEC cryptocurrency and its key features:

• Transactions with a low commission level – 0.0001 Zcash.
• Coded fields for additional notes.
• Fixed number of raw blocks (20 in total).
• Protected privacy of all transactions.
• 2.5 minutes to confirm blocks.
• ZEC's mission is to provide every customer with enhanced opportunities and economic freedom.
• Voluntary disclosure of information about the transaction thanks to special viewing keys.
• Blockchain support for Zcash transactions with multi signatures for t-address.
• 21 million emission coins, which are planned to be mined by 2032, according to some sources, by 2050.
• The Zcash protocol contains two addresses that can be forwarded to each other – t-address (transparent) and z-address (private). Depending on the forwarding of addresses, transactions in the Zcash network are divided into 4 categories: public, secure, unmasked and private.
• Decentralization and resistance to hacker attacks, the wallet for Zcash is securely protected. There is no central server that anyone could disable, there are no points of failure and there is no single body regulating the project that could shut down the platform.

The main positive and negative aspects of Zcash cryptocurrency

Benefits of ZEC:

1. Complete confidentiality of transactions is the main unique aspect of the payment system at ZeroCash.
2. High block download speed with minimal fees – 4 times faster than the Bitcoin network.
3. The unreality of calculating the address of an electronic wallet and the development of compromising information on each other, due to the non-disclosure of personal data.
4. The payment system is the most accessible and convenient, and it does not save the information of its customers.
5. Maximum security of the blockchain network thanks to decentralization and the zk-SNARK algorithm.
6. The use of scientific protocols that serve as a guarantee of the stable operation of the project.

ZEC Disadvantages:

1. Subsequently, the complete confidentiality of transactions appeared at the risk of illegal trade. Criminals trade on the dark web and purchase weapons and various illegal substances with Zcash.
2. As a result of the emergence of computing power for mining, there is an option to centralize the platform. The developers conducted a study and found that half of all ZEC mining farms belong to three addresses. There are suspicions that this is the head of Bitmain processors. If there is an attack on half of the farms, then one person can concentrate illegally obtained money in his hands.
3. The low price of crypto coins does not make them super popular among users. The average price of Zcash is no more than $162.8 per coin (at the time of writing). Despite the fact that investors are in no hurry to invest their funds, they appreciate the confidential technology of such transfers.
4. Due to the fact that the mining profitability indicator is quite low compared to other popular cryptocurrencies – only $ 5.41 per day (at the time of writing), this has reduced competition in the digital market and the opportunity to earn money for those users who use low-volume asics.
5. The low popularity of cryptocurrency can be triggered by the lack of a marketing company and, as a result, low brand awareness. The creators of Zcash are working more on the educational side among users. This is a disadvantage of the company, as many crypto enthusiasts and ordinary users may not be aware of the value of this platform.

Mining Zcash tokens

In order to create a new crypto-coin, users need to have a certain number of computing processors in their arsenal, this is mining. For the extraction of cryptocurrencies, powerful equipment and video cards are always used. Since the popularity of mining has increased dramatically, it turned out to be very difficult to mine cryptocurrency on your own, and people began to unite in mining farms or pools to save money and time. The probability of making a profit on farms is higher than alone. The mined profit is equally distributed among all participants in the pool. For cryptocurrency mining, special ASIC processors were developed, which were designed for Bitcoin-based cryptocoins.

As for Zcash mining, Proof-of-Work and Equihash algorithms are used here, they are fundamental for the integrity of the Zcash network block. The Equihash algorithm is more stable and fair, and it also guarantees decentralization on all fronts.

It is worth noting that at the end of 2020, a network update took place in the Zcash ecosystem, which was called Blossom. The implementation of such an update made it possible to reduce the time of creating one block to 75 seconds, and also made it possible to increase the network throughput. The block reward has also been reduced and now it is 6.25 ZEC, the processing fee has not changed.

In the future, Zcash developers want to add sharding technology, which will allow processing up to a million financial transactions per second. But there is a significant argument that can drastically change not only the entire blockchain ecosystem, but also end the use of open t-addresses. Thus, the chain will become mega-speed and completely anonymous.

How to buy ZEC cryptocurrency?

Before you buy Zcash cryptocurrency, you need to create your own virtual wallet, with its help you will receive a unique address where your crypto coins will be located.

To buy or sell ZEC, we advise you to choose only reliable and popular, among a large number of users, exchanges or crypto exchangers.

A cryptocurrency exchange is a site where you can buy or sell any cryptocurrency at the current market price. The most popular exchanges on which exchange transactions are made every minute are:

• Coinbase;
• Binance;
• Gemini and others.

You also have the opportunity to use the services of online exchangers, which is more convenient for many users. For example, on our website Coin24.com.ua you can exchange ZEC in cash, as well as non-cash money. You can familiarize yourself with this information in more detail by going to the main page of the site and selecting the necessary direction of exchange, or in the “Dynamics of the exchange rate” block, which is indicated on this page on the right (for the PC version) or below the main text of the article (for the mobile version).

Prospects and development of Zcash cryptocurrency

The developers of the Zcash project understand how important it is to actively develop and improve their technologies, so they are working hard on all aspects. For example, in 2018, the code in the algorithm was changed, thanks to which the generation and calculations were accelerated. After such updates, the cryptocurrency exchange rate rose to $ 110 amid a decline in the positions of other cryptocurrencies of the entire crypto asset market.

The Electric Coin Company organization in 2022 decided to make drastic changes to the ZEC project. It is planned to release its own open source wallet, which will allow developers to interact with Zcash owners directly, in addition, they will be able to quickly launch or test new wallet chips.

The developers plan to switch to a more environmentally friendly and energy-efficient PoS (Proof-of-Stake) consensus algorithm, which allows the team to integrate interoperability capabilities, that is, Zcash can be compatible with different blockchains. Developers now prioritize the development of interoperability with the Cosmos blockchain, on the basis of which BNB, LUNA, BAND, Exodus and others work.

Electric Coin Company wants to work on improving the user experience of ZEC holders and the commercial use of the coin in the near future. In addition, the team wants to enter the markets of North and Latin America.

As you can see, Zcash Foundation scientists are constantly looking for more effective solutions to problems and improvement of the main principle of work — zero disclosure. Such technical improvements help to increase the popularity and value of the cryptocoin on the market.

In general, the future of the cryptocurrency is quite promising, but it is too early to talk about the rapid growth of the price, due to the tightening of regulation of cryptocurrencies around the world.