Zcash is the third most valuable anonymous cryptocurrency on the market, designed to ensure transaction confidentiality and hide senders’ and receivers' addresses. Yet, unlike Monero, anonymity isn't a requirement, but an option.
Most cryptocurrency users prefer to keep their personal information private during transactions as anonymity prevents interference from third parties and upholds the principle that "silence is the sound of money talking".
The demand for anonymity has led to the development of new types of cryptocurrencies operating on public blockchain networksHowever, they restrict access to information about transaction participants. One such platform that provides full asset owner data protection is Zcash. This platform, alongside Monero and Dash, is among the most sought-after anonymous assets on the market.
The origins of Zcash: A brief history of the cryptocurrency and its network
In 2016, Zcash made its debut on the cryptocurrency market with the ticker ZEC. It was created by a professional team of developers from the United States and Israel. After Zcash was listed on various crypto exchanges, the coin's value rose to $4200. The exact reason for this sudden surge is unknown, though it's believed to be due to high mining difficulty and limited coin supply. This event caught crypto investors' attention. Zcash also attracted interest because the project secured significant investments from major companies such as Pantera Capital, London Trust, Maple Ventures, and other funds. This enabled the Zcash team to forgo an initial coin offering (ICO).
Zcash is a Bitcoin fork that was initially planned to introduce significant changes to the source code of the oldest cryptocurrency in order to enhance anonymity and security. However, this would have inevitably led to a massive hard fork, as a significant portion of participants might not have agreed with these innovations. Such a plan could also have negatively affected Bitcoin's market price. That is why the development team decided to create Zcash as a BTC replicate with changes to the code to provide a high level of transaction confidentiality.
The main Zcash project document includes an interesting rule, stating that 10% of all coins emitted over four years should be given to the founders (large investors and developers). This approach was not accepted by some Zcash community members. This led to the ZClassic fork being created just one week after the main currency release. This practice did not prove successful, as evidenced by the creation of several more Zcash forks. The most notable was Bitcoin Private, which attempted to combine Bitcoin and Zcash blockchain benefits but failed to gain popularity.
The Zcash development team is constantly working on implementing updates, changes and improvements to the network, aimed at enhancing security and scalability. One of the most significant events in Zcash history was the coin's listing on the Gemini cryptocurrency exchange. This resulted in a 35% price surge. While Gemini may not have the largest trading volumes than Binance, OKX, or Coinbase, its collaboration with the US government provides Zcash with a certain level of immunity against potential delistings from other exchanges. Unfortunately, other anonymous cryptocurrencies lack this kind of assurance.
Zcash protocol and address types
Zcash stands out among other cryptocurrencies due to its use of the Zerocash confirmation protocol. This allows transactions without disclosing information about the parties involved. In addition, Zcash has an embedded privacy protocol known as zk-SHARKS. The Zcash blockchain includes both standard addresses starting with "t" for public transactions, as well as anonymous addresses starting with "z" that do not reveal any information about the parties involved. An interesting feature is the ability for different types of wallets to interact, giving users the option to choose the level of privacy for their transactions.
Thus, the protocol includes two types of address:
- t-аddress — transparent;
- z-аddress — private.
There are four types of transaction:
- t –> t – public;
- t –> z – shielding;
- z –> t – deshielding;
- z –> z – private.
Mining
Similar to Bitcoin, Zcash utilizes the Proof-of-Work blockchain algorithm. The network's capacity to process transactions is roughly 300 per hour, with a block time of approximately two and a half minutes. Confirming transactions typically takes 10-15 minutes. The Equihash algorithm prevents the use of expensive ASIC miners, and a high-performance computer equipped with a modern GPU is adequate for ZEC mining. This makes mining Zcash available to anyone, in line with Satoshi Nakamoto's original intention.
As of now, more than 16.3 million ZEC out of a total of 21 million have been mined.
Investors
ZEC has found its way into institutional investors' wallets, including big names like Pantera Capital, Winklevoss Capital, and Placeholder Ventures. And with its anonymous transaction capabilities, ZEC has also attracted a legion of retail investors who prefer to keep their financial business on the down-low.
Zcash advantages:
- Confidentiality is ensured.
- Mining made easy.
- Widespread support from exchanges, trading platforms, and wallets.
In conclusion
Investing in Zcash can be a wise choice for those who value privacy and anonymity. With its solid position as one of the top three private coins in the digital asset market, and daily trading volumes rarely dropping below $30 million, ZEC has maintained steady popularity among retail investors. So, whether you're an experienced crypto investor or just starting out, adding Zcash to your investment portfolio could be a smart move. There's nothing better than knowing your transactions are secure and confidential!
