Understanding Zcash: Digital Currency for Payments

by George Philip
Published: Last Updated on 0 comment

What is Zcash?

Zcash uses a zero knowledge proof (zero knowledge proof) construct called ZK-SNARKs.  This allows users to exchange information without revealing their identity.  While the Bitcoin blockchain contains a record of participation in transactions, their number, Zcash only shows the fact of the transaction, without disclosing information about those who participated in it or its amount.

Zcash is the result of an ongoing effort to create more secret cryptographic protocols. Zuko Wilcox founded and was the CEO of Zcash and the Zerocoin Electric Coin Company, which created a protocol called Zerocoin between 2013 and 2014.

  Key points:

  •  ZCash is a blockchain decentralized cryptocurrency that seeks to provide anonymity for its users and their transactions.
  • ZCash enhances user privacy by using zero knowledge proof (zk-SNARK) to verify transactions without disclosing information that could compromise user privacy.
  • ZCash is built on the Bitcoin platform and is largely identical to Bitcoin.
  • As of 2021, ZEC (the currency symbol for ZCash) is ranked 26th on CoinMarketCap’s ranking cryptocurrencies.  As of April 2021, the total market capitalization of ZCash is $ 403 million.

How is the Zcash project developing?

Zcash cryptocurrency is in high demand in the market and is supported by most of the leading trading platforms. With Zcash’s ability to combine privacy with functionality, ZEC continues to gain a following.  For the convenience of using cryptocurrency in the future, the Zcash community (ZEC) plans to develop solutions to improve network performance.

 First of all, the project management intends to provide the ability to conduct an unlimited number of transactions, implement the Proof-of-Stake consensus algorithm, and also implement a number of private projects. These events can have a positive impact on the valuation of the cryptocurrency.

 In addition, in 2020, the first halving of the miners’ reward (halving) for the mined block (up to 6.25 ZEC) will be implemented in the Zcash blockchain.  Based on practice, this event has a positive effect on the value of the coin.

The main difference between Zcash to Bitcoin lies in the support of the “zerocash” protocol, which provides complete anonymity and confidentiality of the transaction metadata within which funds are transferred, while maintaining a common decentralized structure and a publicly available blockchain.  If in Bitcoin all transactions can be associated with the wallet identifier and track the path of money, then Zcash guarantees the impossibility of tracking the sender, recipient and the transfer amount for any transaction, i.e.  from the outside it is impossible to track who, when and how spent the funds.

 Transactions are independent of interaction with other components, and full nodes in the Zcash network only require a small persistent block of state to be stored.  The contents of a transaction can only be viewed by someone with the corresponding view key.  Thus, control over who can view the contents of the transaction rests in the hands of the user.  Storing transactions in encrypted form required the use of a fundamentally new cryptographic method of confirming payments, called zk-SNARK, developed by the Zcash project participants over the past several years and based on the use of zero knowledge proof.

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