Zcash: a coin for private transactions
Zcash is a blockchain project and cryptocurrency concerned with the issue of privacy. By utilizing a protocol that enables zero-knowledge proofs (ZKPs) transactions, private payments are possible on a public blockchain. The project stems from a Bitcoin background, although it has acquired a unique identity as a privacy coin during years of development.
The compact history of ZCash
The development of Zcash started back in 2013 when Johns Hopkins professor Matthew Green and some of his graduate students began developing it. It was completed a little later by the for-profit Zcash Company, led by Zooko Wilcox. The company managed to raise over 3 million dollars to develop the product. The genesis block, which is the first block of a blockchain, was mined in 2016. The privacy coin reached its current all-time high of almost $6.000 that same year. Initially, the project was known as Zerocoin, later Zerocash, and now ZCash.
Zcash software trivia
Zcash protocol’s software basis is strongly linked with Bitcoin, as the protocol forked from the Bitcoin blockchain back in 2016. Hence, there are a lot of similarities, such as both protocols having a 21 million unit total coin supply. As you might have already learned, Zcash enables higher security in its transactions. This is enabled by “shielding.” These shielded Zcash transactions are fully encrypted but can still be verified and validated, while much less information is available for external parties. In the case of shielded Zcash addresses or z-addresses, the data sent to these addresses are invisible, as well as the number of funds held by these z-addresses. Zcash also includes transparent t-addresses that process trackable transactions with less security.
One of the critical problems in the development of this project is to offer both private transactions and, at the same time, fight crime attracted by such increased privacy. As stated in 2017 by Wilcox, "I think we can successfully make Zcash too traceable for criminals like WannaCry, but still completely private & fungible. …"
Zcash is a proof-of-work (PoW) blockchain, which means that the blockchain token can be mined as the process of mining adds transactions to the blockchain. However, PoW protocols include their fair share of problems, being primarily criticized due to their low energy efficiency. As a result, there has been talking of a transition to more sustainable Proof of Stake (PoS) protocol.
ZEC, the token
The native cryptocurrency of the Zcash ecosystem is ZEC. The coin has a limited 21 million unit total coin supply, and it can be purchased on most crypto exchanges. Furthermore, because Zcash is a PoW blockchain, new coins are produced by mining. Because ZEC is privacy-centered, some exchanges have delisted the altcoin. As transactions are impossible to track, exchanges fear not being able to stay compliant with the applicable laws and regulations surrounding cryptocurrencies.
The future of Zcash
Like all crypto, Zcash is a constantly evolving project under development. When shortcomings are noted, they’re tackled with updates such as Halo and Halo 2. ZEC is one of the most prominent privacy coins. The future of Zcash is, however, quite unsure. On the one hand, with current events in the world, such as the war in Ukraine, privacy crypto’s see increased demand. On the other hand, governments are actively looking to regulate crypto transactions to make them more identifiable. This could affect the future of cryptocurrencies like Zcash.