In this article we will analyze and explain what is Zcash, why it was created, and which are the differences with other cryptocurrencies. At the moment, Zcash is one of the most interesting virtual currencies in the market and has attracted several investors.
What is Zcash?
Zcash is one of the most famous privacy-coins in the crypto market. The main characteristic is that it uses a technology known as zk-snarks that protect the privacy of the sender and recipient. Zcash has been launched in 2016 by Zooko Wilcox, founder and CEO of The Zcash Company.
Zcash offers the possibility to work as a private cryptocurrency – that means not showing the information of the transaction, recipient and sender – or in a similar way Bitcoin does – registering all the information in the blockchain.
What are Zcash zk-SNARKs?
Zcash is the first widespread application that uses zk-SNARKs, a novel form of zero-knowledge cryptography. Zk-SNARK stands for ‘Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.’
“Zero-knowledge proofs allow one party (the prover) to prove to another (the verifier) that a statement is true, without revealing any information beyond the validity of the statement itself. For example, given the hash of a random number, the prover could convince the verifier that there indeed exists a number with this hash value, without revealing what it is.”
This is one of the main characteristics of Zcash, because it allows users to send and receive payments without disclosing the information in the transaction. Blockchain is a decentralized ledger that registers all transactions that take place in the network, and that allows participants to check whether the funds are legitimate or not.
In Bitcoin’s blockchain, that is visible to everyone. Everyone is able to track all the transaction of a specific address, meaning that the information is exposed. But Zcash, implementing the zk-Snarks, is able to show that a transaction is valid, without giving clues about what is inside that transaction, who is the sender, neither the receiver.
This is one of the most interesting aspects of the virtual currency, and something that the community is debating since long time. In a blog post uploaded by Zooko Wilcox and Jack Grigg, they explain why Zcash uses the Equihash as Proof-of-Work algorithm.
They both explain that they have decided to use this mining algorithm because it is ‘unlikely’ that anyone will be able to build a cost-effective custom hardware (ASICs) for mining in the future. Additionally, they explain that it is very ‘unlikely’ that there will be any major optimization of Equihash – which could give some miners who know the optimization an advantage.
But the team is open to change the mining algorithm for something different. Which is very productive for a community to have the freedom to discuss these issues.
“We can’t know for certain that Equihash is safe against these issues, and the community may collectively decide to change Proof-of-Work again, if we find some flaw in Equihash or if we find another Proof-of-Work algorithm which offers higher assurance.”
The team has decided to use an ASIC-resistant mining algorithm because it allows widespread distributions of coins. And Zooko explained it very well:
“One thing I’ve learned along the way is that GPU mining is absolutely essential to Zcashers in Venezuela. If Venezuelans try to import ASIC miners (i.e. for Bitcoin, currently), then they risk having the miners stolen or extorted by the army which controls all imports. GPUs are not (yet?) nabbed on import like that, and anyway there are a lot more GPUs already floating around inside Venezuela.”
But it is important to mark that Zooko himself says that he did not change opinion during the last years, but that he knows that widespread-distribution-of-coins cannot last forever.
ASIC miners keep expanding and Bitmain launched the ANtminer Z9 mini, an ASIC miner that is able of mining any virtual currency that runs with the Equihash proof-of-work algorithm. That important event moved the Zcash community, how to solve this problem?
The discussion started and there are already some proposals floating around the topic.
I was waiting to see Ethereum go Proof-of-Stake first to see what goes wrong.
— zooko (@zooko) May 14, 2018
Where Can I Buy Zcash?
This cryptocurrency can be bought in many different virtual currency exchanges. Indeed, there are more than 80 different virtual currency exchanges all over the world that allow users to buy Zcash. Additionally, it can be traded against many different currencies including the US Dollar, the Euro, The British Pound, Bitcoin, Litecoin, and Ether.
One of the most important milestones for Zcash was that one of the regulated exchanges in the United States, Gemini, started to list Zcash. This is a very bullish experience for this virtual currency that is one of the privacy coins in the market. If one of the regulated exchanges in the United States has given green light to Zcash, it means that there is something in the privacy coins that is accepted by the regulatory authorities.
This listing gives Zcash and the virtual currency market legitimacy. Moreover, it leaves one message: Privacy Coins can be compliant with the regulatory framework.
As mentioned above, Zcash has been founded by Zooko Wilcox. He has more than 20 years of experience in cryptography, and security-related topics. According to some of the people that surrounds him, he is an idealist that is not motivated by material gains. – About it we can mention the fact that Zcash team did not filter information about the listing in Gemini, neither traded before in the market.
Zcash has excellent developers and security experts from different parts of the world. We can mention Eli Ben-Sasson, professor at the Computer Science Department at Technion, Israel, Alessandro Chiesa, faculty member in Computer Science at UC Berkeley, Christina Garman, Matthew Green, Ian Miers, Madars Virza, and Eran Tomer.
The cryptocurrency team is being advised by important figures in the crypto-world, including Gavin Andresen, Vitalik Buterin, Arthur Breitman; Joseph Bonneau, Gordon Mohr, and Brian Warner.
Zcash in the Crypto Market
Zcash is the 21st most important cryptocurrency by market capitalization with $1.39 billion dollars. Each Zcash coin can be bought for $354 dollars according to CoinMarketCap. Back in January, Zcash has been traded for over $875 dollars when it reached its all time high.
While the market capitalization and price have been growing over time, compared to Bitcoin its price has been slightly decreasing over time.
Zcash is one of the most important cryptocurrencies in the market. It allows individuals and enterprises to securely send and receive payments – and messages – through Zcash’s blockchain. The privacy features that it has are the most important points to mention about this great cryptocurrency.
The team behind it is professional, experienced and humbles enough to learn and improve every single day.
Even when there are many competitors out there, Zcash proves that it is ready to compete and innovate at all times.
If you want to know more about other cryptocurrencies check our guides here:
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