Key highlights:

  • ZEC is a unique cryptocurrency that can offer users privacy features while being able to comply with regulations
  • The project is supervised both by a decentralized non-profit, the ZCash Foundation, and a private entity the Electric Coin Company
  • ZEC’s privacy features are enabled by technology called zk-SNARKs

Zcash explained

Initially proposed in a publication entitled “Zerocash” back in 2014, ZEC is a decentralized public peer-to-peer cryptocurrency that offers features similar to Bitcoin with a twist of unique privacy and security features found only in a handful of public digital currencies.

More specifically, ZEC was the first cryptocurrency to leverage ‘zk-SNARKS’, a zero-knowledge protocol that was considered among the top 10 breakthrough technologies of 2018 according to MIT’s Technology Review.

In a nutshell, a Zero Knowledge-SNARKS consensus architecture allows for transactions on ZCash blockchain to be validated securely, yet without necessarily revealing essential personal data such as the addresses involved in the transaction, or the amount that has been transacted.

The origins of Zcash

While ZCash was originally conceived during 2014, it was officially launched in the broader crypto market in late 2016, backed by a private legal entity known as the Electric Coin Company (ECC), led by Zooko Wilcox.

Nevertheless, in the summer of 2017 the ZCash Foundation non-profit was founded in order to spread the usage of the tech behind ZCash’s distributed ledger, and it is responsible for the development and maintenance of the project alongside ECC.

With user privacy as their main feature, the ZCash Foundation introduced a series of technical modifications to the original Bitcoin source code in an attempt to provide Bitcoin users with the ability to decide whether they’d like their personal data being exposed to the general public and to what extent.

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Key Zcash features:

  • Proof-of-work cryptocurrency
  • Launched in 2016
  • Can either be used privately or transparently

Zcash features and use cases

Aside from its innovative privacy feature, ZEC is a pretty straightforward crypto asset that’s primarily designed for peer-to-peer value transfers. For this purpose, it provides many of the same benefits as Bitcoin, Litecoin, and other similar cryptocurrencies – the network operates 24/7, and money can be sent globally in a completely trustless manner. On this link, you can find a community-curated list of merchants and service providers that accept Zcash as payment.

Of course, investors are also simply buying ZEC to speculate on its price action, just like we see with most other cryptocurrencies.

How is ZEC created?

New ZEC coins are introduced into the circulating supply through mining – Zcash is a cryptocurrency based on proof-of-work. Tokenomics-wise, ZCash creators decided to ‘go with the flow’ and keep the same 21 million total supply cap introduced by Bitcoin. However, only about 8.5 million ZEC are currently circulating in the public market.

That makes ZCash a generally scarce digital asset, especially when analogizing the fact it occupies the 26th position in the global crypto rankings based on market cap.
Other characteristics inherited from Bitcoin include the block reward halvings. The next Zcash halving is expected to happen sometime in late 2020.

Additionally, a typical transaction would take anything between seconds up to a couple of minutes to be confirmed and promoted via the ZCash privacy payments network.

Zcash features a memory-intensive Proof of Work (PoW) algorithm and not an energy-intensive one as appears in Bitcoin’s case. However, ASICs are still the most efficient way to mine ZEC.

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Where can you buy and store Zcash?

Buying Zcash is not too difficult, as it is supported by many cryptocurrency exchanges. If you already own some other cryptocurrencies, you can easily buy Zcash on Binance. However, if you want to make your ZEC purchase with fiat currency, your best bets are probably Coinbase and Gemini

You can store your ZEC coins in a number of cryptocurrency wallets. Here’s a few of the best options available on the market today:

For additional security, you can use a hardware cryptocurrency wallet like the Nano Ledger S.

Zcash competitors

We can consider other cryptocurrencies that have privacy-enhancing capabilities as competitors to Zcash – these cryptocurrencies are often referred to as privacy coins. Here’s a few of the best-known examples:

Verdict

ZCash is one of the most interesting public digital currency projects out there, and it is undeniably one of the most viable privacy coins. Other privacy coins might have trouble with overcoming regulatory barriers such as the newly introduced fifth anti-money laundering directive promoted by the EU.

ZCash can be used both among users who seek some extra privacy, yet want a project with integrity and liability, and typical crypto users who simply find ZCash a cheaper, or faster alternative to 1st generation blockchain platforms.





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