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Zcash is a decentralized cryptocurrency focused on privacy and anonymity. It uses the zk-SNARK zero-knowledge proof technology that allows nodes on the network to verify transactions without revealing any sensitive information about those transactions.
Contrary to a common misunderstanding, the majority of cryptocurrencies on the market, including Bitcoin (BTC), are not anonymous, but rather pseudonymous; while they do not explicitly reveal the identities of their users, each user has their own public address or addresses which can be traced back to them via the methods of data science and blockchain forensics.
Zcash Cryptocurrency transactions, on the other hand, still have to be relayed via a public blockchain, but unlike pseudonymous cryptocurrencies, ZEC transactions by default do not reveal the sending and receiving addresses or the amount being sent. There is an option, however, to reveal this data for the purposes of auditing or regulatory compliance.
Zcash Key Points
How It Works
Zcash is a privacy-protecting, digital currency built on strong science. With Zcash, people can transact efficiently and safely with low fees. Shielded Zcash ensures transactions remain confidential while allowing people to selectively share address and transaction information for auditing or regulatory compliance.
Zcash addresses are either private (z-addresses) or transparent (t-addresses). Private z-addresses start with a “z,” and transparent t-addresses start with a “t.” Between these two types of addresses, there are four transaction types.
A Z-to-Z transaction appears on the public blockchain, so it is known to have occured and that the fees were paid. But the addresses, transaction amount and the memo field are all encrypted and not publicly visible. This type of encryption is only possible through the use of zero-knowledge proofs. Read more: What are zk-SNARKs?
The owner of an address may choose to disclose z-address and transaction details with trusted third parties — think auditory and compliance needs — through the use of view keys and payment disclosure.
A T-to-T transaction works just like Bitcoin: The sender, receiver and transaction value are publicly visible. While many wallets and exchanges exclusively use t-addresseses today, many are moving to shielded addresses to better protect user privacy.
The two Zcash Cryptocurrency address types are interoperable. Funds can be transferred between z-addresses and t-addresses. However, it is important that users understand the privacy implications of shielding or de-shielding information through these transactions.
Zcash supports fast transactions with a low fee of .0001 Zcash. Zcash is supported on a large number of top wallets and exchanges.
Address and transaction privacy
The offers two types of addresses: shielded and transparent. Shielded addresses are not visible and transactions between shielded addresses do not reveal either address, the transaction amount or the contents of the encrypted memo field. Transparent addresses and transactions between them are publicly viewable on the Zcash blockchain, in the same way that Bitcoin addresses are viewable.
Either the sender or receiver of a transaction may disclose transaction-specific details to 3rd parties as may be needed for visibility, compliance or auditing. The receiver may disclose a transaction value and memo but does not have access to the sender’s address. This is currently an experimental feature.
Zcash Cryptocurrency supports transaction expiration to minimize the impact of a non-mined transaction. By default, a transaction will expire and funds unencumbered if the transaction is not mined after 50 minutes (20 blocks).
Privacy within your control
Shielded Zcash transactions are completely private. Like Bitcoin, Zcash transaction data is posted to a public blockchain; but unlike Bitcoin, Zcash ensures your personal and transaction data remain completely confidential. Zero-knowledge proofs allow transactions to be verified without revealing the sender, receiver or transaction amount.
Selective disclosure features within Zcash allow a user to share some transaction details, for purposes of compliance or audit. Zcash also allows for transparent transactions, to accommodate for wallets and exchanges that don’t support private transactions.
Built on rigorous science
Zcash Cryptocurrency was developed and launched by top cryptographers in 2016. The underlying protocol is based on the research of scientists from MIT, Technion, Johns Hopkins, Tel Aviv University and UC Berkeley.
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. As of October 2020, the block subsidy is equal to 6.25 ZEC.
How Is the Zcash Network Secured?
Where Can You Buy Zcash [ZEC]?
Zcash is a high-ranking cryptocurrency available on a number of major exchanges, some of which are: