What is ZCash (ZEC)? The Privacy Crypto Explained
Take a closer look at ZCash, the privacy cryptocurrency that aims to provide an anonymous payment system.
When Nakamoto first introduced Bitcoin in 2009 and mined the first genesis block, it opened up the doors to the future of cryptocurrency. Since then, many other crypto assets have joined the fray each with their own unique features.
The introduction of Bitcoin itself has inspired others like it albeit with distinct differences. One of these is ZCash, a fork from Bitcon’s code that aims to provide to provide users with an alternative cryptocurrency that has privacy protecting features to prevent outside parties from tracking transactions and addresses on the blockchain.
New to crypto? Start with the basics.
What is ZCash (ZEC)?
ZCash is a privacy cryptocurrency that was forked from Bitcoin. It shares some similarities to Bitcoin, but with a few extra improvements.
According to their official whitepaper, ZCash was developed by a group of cryptographers and academics in 2016.
ZCash was initially launched under the name Zerocoin, but after being changed to Zerocash, it eventually became ZCash.
The purpose of Zcash was to provide an anonymous payment system using zero-knowledge proofs because some people want to be able to transact privately on a public blockchain without revealing their personal information.
Further reading: What Does Forking Cryptocurrency Mean?
How Does ZCash Work?
Basically, Zcash works like other cryptocurrencies with a few privacy features hiding your transactions. Like Bitcoin, Zcash records all of its transactions on the blockchain and miners add new blocks to the blockchain.
The main difference between Zcash and Bitcoin is that Bitcoin is based on SHA-256 while Zcash is based on the Equihash algorithm.
Zcash’s mining network uses the Equihash algorithm because it is extremely compute-intensive and cannot be run using GPUs or specialized mining hardware.
ZCash also uses zero-knowledge proofs known as zk-SNARKs for its privacy feature. This means that users can send each other encrypted transactions that are completely anonymous.
Related: What is Bitcoin Mining?
Zcash is scarce and mineable. By this time, the total circulating supply of ZCash is 14,559,487.50 ZEC out of a maximum supply of 21 million ZEC.
The mining algorithm that is used by ZCash is a proof-of-work (POW). Meaning that every miner has to compete to create a new block.
For the first four year, every reward that has been revealed. 80% of it is given to the miners and 20% allocated to the Electric Coin Company, ZCash Foundation, key employees, and stakeholder.
What Makes ZCash Unique?
You may often hear that most cryptocurrencies are secure and private. But, ZCash has a unique privacy feature.
A cryptocurrency like Bitcoin allows anyone to see all transactions on its blockchain. This means that transactions are recorded on the ledger without revealing information about who sent or received the money.
Zcash has two types of addresses: transparent and shielded. The transparent addresses are similar to Bitcoin’s public addresses and can be used by anyone on the network to send or receive payments.
However, shielded addresses are intended for use between two parties where both parties want to keep their transaction private from other users on the network.
The transactions made with shielded addresses are also known as z-addresses or z-coins, which are much more difficult to trace than other types of transactions.
Before using ZCash addresses, you have to understand how It works with different types of transactions.
The picture below shows that there will be 4 transaction types regarding their privacy feature.
The first scenario (private) will explain like this. If you and your friend want to make transactions without anyone knowing both of your identities. Then, you need to use a ZCash shielded address where the sender, receiver and amount are kept private.
Third scenario – Shielding, where you use the transparent address, and your friend using the shielded address. It helps improve the security of your transactions, because the output will be in private.
Fourth scenario – Public. Both of you use transparent addresses which makes your transaction visible. In a nutshell, it works just like Bitcoin or other cryptocurrencies.
Please keep in mind in order to enable the shielded addresses. You need to have a wallet that supports ZCash shielded addresses.
Referring to their website, there are some wallets that support shielded addresses and transactions.
Nighthawk is a ZCash mobile wallet with support for Z-addresses, including sending & receiving shielded transactions, and memo support.
Additionally, It also supports transparent addresses (t-addresses), which are useful for making payments to merchants and exchanges that don’t accept shielded addresses.
Zecwallet Lite is a fully featured shielded wallet for Zcash. The wallet supports sending and receiving shielded transactions by using the z-addresses. It also has a built-in miner in order to mine ZEC directly from your phone or tablet.
It’s available on mobile and desktop. This will help you to access your coins from anywhere in the world.
How to buy ZCash (ZEC)?
Now that you have an idea of what ZCash is, its underlying technology, and applications, can you get your hands on some ZEC? The answer is — Yes!
Here at Easy Crypto, we make it easy for anyone to get started with cryptocurrencies. We are non-custodial exchange, meaning we send your crypto orders directly to your wallet, where you hold true ownership of your assets.
Invest in ZCash: Buy ZEC with Easy Crypto.
ZCash (ZEC) is just one of hundreds of cryptocurrencies that we offer here at Easy Crypto. Our collection of supported crypto assets include:
- NFT Tokens
- Metaverse Tokens
- DEX (Decentralised Exchanges)
- DeFi (Decentralised Finance)
- And many more.
View the latest rates for ZEC: Check the rates.
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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.
Last updated July 2, 2023