What Is Zcash?
Zcash is a cryptocurrency type that runs on blockchain technology and is free from any centralized authority. In addition, it used advanced cryptography for added security and privacy. This cryptocurrency offers confidential Transactions where users can choose their privacy level and decide whether they want their transactions to be private or public.
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Zcash crypto differs from other cryptocurrencies because it offers users enhanced confidentiality. Most crypto transactions are recorded on a public blockchain, making them transparent and traceable. However, these crypto users can decide to make their Zcash wallet addresses and transactions public by opting for transparent transactions.
Table of contents
- What Is Zcash?
- Zcash Explained
- History
- How To Buy?
- How To Mine?
- Zcash Vs. Bitcoin
- Zcash Vs. Monero Vs. Bitcoin vs. Dash
- Frequently Asked Questions (FAQs)
- Recommended Articles
Key Takeaways
- Zcash is a cryptocurrency that runs on decentralized blockchain technology. It differs from other cryptos because it offers users private, secure, and confidential transactions.
- This coin uses advanced cryptography to enhance security. Users are provided with shielded addresses where all transactions will be hidden from the public eye. Transactions made to a private address will not have any record of where the amount went.
- However, these crypto users also have the option to use a transparent address from where all the transactions will be publicly recorded. Transactions requiring auditing and compliance can be made using a public address.
Zcash (ZEC) Explained
Zcash is a cryptocurrency famous for using advanced cryptography, which provides augmented privacy. It runs on decentralized blockchain technology, but unlike other cryptos, this coin users can decide whether they want their transactions to be publicly recorded. In addition, this coin allows users to choose between a transparent and a shielded address. Transactions to and from a shielded address remain confidential, while transactions made through a transparent address are publicly accessible and traceable.
A private address in this crypto is known as a z-address, while a public address is known as a t-address. The transaction types made through this coin are as follows:
- Private: Here, the sender and receiver use z-addresses. As a result, both the addresses and the transaction amount remain private.
- Deshielding: Here, the sender uses a z-address, and the receiver uses a t-address. Therefore, the sender’s address is private, and the receiver’s address and the amount they received are public.
- Shielding: Here, the sender uses a t-address, and the receiver uses a z-address. Thus, the sender’s address and the amount they’re sending are public, while the receiver’s address is private.
- Public: The sender and receiver use t-addresses here, so their addresses and the amount are public.
History
In 2013, Matthew Green, a professor from Johns Hopkins University, came up with the concept of Zero Cash along with some of his graduate students. Zero Cash was later renamed Zcash. Initially, it was supposed to be a privacy extension to Bitcoin, but its core developers disagreed. So, the developers started the Zcash Company and appointed Zooko Wilcox-O’Hearn as the CEO. It was launched on October 28, 2016, and was later rebranded as the Electric Coin Company.
How To Buy ZEC?
Users can buy these coins on several online markets, also known as exchanges. A user must consider several factors while choosing Zcash exchanges, which include security, fee structure, reputation, and volume. Several Zcash exchanges like Coinbase, Gemini, Binance, and Kraken exist. However, Gemini is the most reputable exchange, providing several privacy options that other exchanges don’t. Furthermore, it is secure and easy to use.
How To Mine?
Individuals can perform Zcash mining in the following way:
- Users can initiate the Zcash mining process with the profitability calculation. They must calculate the operating expenses, capital expenditure, and revenue. The revenue can be calculated using a publicly available cryptocurrency mining calculator. The miner’s mining pool fees and electricity cost account for the operating expenses. A miner can maximize profit by using low-cost power sources and efficient equipment.
- In the next step, the users need to purchase the mining hardware. Earlier, these coins would be mined with CPU and GPU machines. However, with time and the advancement of technology, more efficient mining hardware is available in the market.
- The miners must then host the Application-Specific Integrated Circuit or ASIC machines. Users can either host them at home or on a mining hosting site.
- Then the miners can join a hosting pool. A mining pool is more convenient than solo mining as it offers a steady income stream.
- Finally, the miners must set up a Zcash wallet and an address to receive the payout.
Zcash vs Bitcoin
The differences are as follows:
- Zcash: This crypto allows its users to make private transactions. It provides financial confidentiality with shielded addresses. This coin has optional disclosure features, enabling users to share transaction data for auditing and compliance purposes. Furthermore, it allows transparent transactions that are entirely interoperable with the shielded addresses.
- Bitcoin: This crypto is built on blockchain technology, and all the transactions made through this coin are transparent and open to the public eye. All users can trace the transactions made with this crypto. However, it is a famous and widely accepted cryptocurrency as it has a decade of experience on its side. Additionally, users have made many successful transactions in the market with this coin.
Zcash vs Monero vs Bitcoin vs Dash
The differences are as follows:
- Zcash: This crypto provides augmented privacy with its underlying protocol, which implies reduced traceability. If the users choose an anonymizing browser, this crypto seems the most anonymous alternative. However, some users may not prefer this coin since it has little experience.
- Monero: This coin has garnered a bad reputation and allegations that the transactions made with this coin are trackable. However, users have transacted with this coin for a comparatively long time. It has proven to be successful in several marketplaces, including illegal ones.
- Bitcoin: All transactions made with this crypto are transparent and open to the public. Anyone on the crypto network can trace this coin’s transaction details. However, this coin has been prevalent in the market for a decade and has received wide acceptance from the public.
- Dash: This crypto coin is more widely accepted and accessible than other cryptocurrencies. However, it only provides increased confidentiality and anonymity through its private send feature. Therefore, this coin could be the best alternative for users who want easy-to-spend crypto and need occasional anonymity.
Frequently Asked Questions (FAQs)
This crypto has a maximum limit to its supply as it is a scarce mineable token. New coins are created as block subsidies where when new coins get mined and added to the end of the blockchain, a specific number of coins is minted and divided into founders’ reward and miner subsidy. Its aggregate supply limit is 21 million coins. Currently, over 16 million coins are circulating in the market.
This crypto type offers two addresses, namely, shielded address and transparent address. When a user makes a transaction on a transparent address, it becomes public and traceable. However, if the user chooses a shielded address, the transactions become private and untraceable as the data gets encrypted. If a transparent address sends coins to a shielded address, the public won’t know where they went. If a shielded address sends a transaction to another shielded address, the entire transaction becomes private and hidden from the public eye.
Staking is a method that allows crypto users to earn rewards if they hold their coins in a wallet and become a participant in the crypto network’s consensus algorithm. For example, Zcash crypto can be staked by buying or transferring these crypto coins.
Recommended Articles
This article has been a guide to what is Zcash (ZEC). Here, we explain its history, how to buy it, how to mine it, and compare it with Bitcoin, Monero, and Dash. You may also find some useful articles here –
- Virtual Currency
- Cryptocurrency Exchange
- Libra Cryptocurrency
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