Zcash: The Privacy Fast Cryptocurrency 

Are you trying to find a way to keep your crypto transactions anonymous? Zcash is the way to go then. In this digital world everyone wants to stay anonymous because of the threats that loom large on us and Zcash helps those people do just that. 

The primary focus of Zcash crypto is on privacy and allowing the users to keep their transactions confidential. Zcash uses a system of cryptographic algorithms to hide the transaction details so no one can see how much crypto was transferred and to which address. This way your identity and transactions are kept a secret. 

According to CoinMarketCap, Zcash token is among the top 120 crypto tokens if we consider the market cap. But if we talk about the 24-hour trading volume, as of July 30, it is ranking in the top 75 tokens.

With that said if you’re looking for a cryptocurrency whose priority is to keep everything confidential then Zcash token is the right choice. More details on it ahead.

What is Zcash? 

When Bitcoin became a success it opened up the door for many other crypto tokens that could provide a unique solution and rule their sector. Zcash token is also one of them. It is basically the opposite of Bitcoin. Why’s that? Because the transactions on the Bitcoin network are available for everyone to see. However with Zcash it’s quite the opposite as it keeps the transactions anonymous. 

In simple terms, Zcash crypto is a decentralized and open-source digital currency which is designed to provide privacy and anonymity to its users. As mentioned before this token uses a cryptographic protocol known as zero-knowledge proofs, specifically zk-SNARKs. With the help of this technology the transactions are fully encrypted while still being verified as valid.

The transactions on the Zcash network are either “Transparent” like the Bitcoin one or “Shielded” in which the information such as sender, receiver, and the transaction amount. This dual approach provides the users with the flexibility to choose between the two. Zcash token has been a revolutionary idea in the crypto privacy space. 

Zcash Utility Token – ZEC 

The main utility token that the Zcash ecosystem uses for all the processes is through the $ZEC token. This ZEC token plays a significant role in providing both functional and economic incentives. These tokens need to be in possession of the person looking to keep their transactions private. 

The main features of Zcash ZEC token are:

Transaction Privacy 

One of the main features of Zcash ZEC crypto is its ability to enable users to make anonymous transactions. By using this token you can either send crypto through t-addresses (transparent addresses) for the world to see where the money went. On the other hand, you can also send transactions through z-addresses (shielded addresses) to keep them private.

Mining and Rewards 

The Zcash ZEC token is used as an incentive for miners who help maintain the Zcash network. The ZEC tokens given to these miners are newly created by them for validating transactions and adding new tokens into the circulating supply. The reward for mining ZEC is similar to Bitcoin which decreases over time as the value of the token increases.

Uses and Applications 

As you already know that ZEC is used as a transactional currency in the Zcash ecosystem. However, it is also used for remittances, online purchases, and as a store of value. This token is particularly attractive for users who prioritize confidentiality. Additionally, ZEC token is also available on multiple exchanges where you can buy, sell and trade it like other digital assets. 

Zcash Tokenomics 

The total supply of Zcash ZEC tokens is similar to Bitcoin. It is set at 21 million ZEC tokens. After almost every 75 seconds a new block is created on the ZEC crypto network with an average block reward of 3.13 ZEC tokens which is added to the total circulating supply. 

As of July 30, 2024, over 2.5 million blocks have been created. And as for the total ZEC tokens in supply currently, that is over 16 million. Mining ZEC tokens is currently a bit easier than mining Bitcoin or Ethereum and is a profitable endeavor. You can find the updated statistics here.

Zcash also undergoes Halving known as Zcash Halving. This is similar to Bitcoin and will continue to happen every 4 years until the total circulating supply reaches the set limit of 21 million ZEC tokens. According to NiceHash, the next Zcash Halving event is on 16 November 2025. Lastly, 10% of the ZEC tokens are set aside for a development fund until the total supply reaches 21 million.

For those interested in exploring more about other blockchain technologies and tokens, check out our comprehensive guides on:

• Exploring Solana: A Complete Guide to the High-Performance Blockchain
• Earn Crypto Browsing with Basic Attention Token (BAT)
• Stellar Coin: Connecting Economies with Ease
• Chainlink: Decentralized Oracle Network Explained
• MANA Coin: The Currency Powering Decentraland’s Metaverse
• NEAR Protocol: Scalability Through Sharding
  
  

How Zcash Works? 

Now you have a general understanding of what Zcash is, its native cryptocurrency and the use cases. However there’s still a lot to learn. So, let’s take a look at how the Zcash network works.

Types of Addresses 

So the Zcash network uses two main addresses which we have talked about before as well. First one is the t-addresses which are available to the public to see and the other one is z-addresses which are kept private. This way the network can accommodate any kind of transactions in an easy way.

zk-SNARKs – A Cryptographic Algorithm 

The core technology behind the whole Zcash network is zk-SNARKs (zero-knowledge proofs). It’s a cryptographic technique that shows that a particular transaction is correct without revealing any sensitive details. 

If we put this into the context of the Zcash network, it means that the miners are able to validate a transaction via this technology without knowing any details about the sender or the receiver. This way transactions remain authentic while keeping the transaction private. Zero-knowledge proofs are the basic element that keeps transactions anonymous and far from the prying eyes of other people and companies.

Combining Transactions 

Apart from sending crypto from one z-address to another, the network also accommodates transactions between a t-address and a z-address. This way you can keep the receiver anonymous while keeping your address public. Only the necessary details are revealed in such transactions according to the sender or the receiver whichever wants to remain anonymous.

Zcash Mining – How it Works? 

In simple terms Zcash mining is the process of validating transactions and adding them to the Zcash blockchain. Miners use their computational power to solve complex cryptographic puzzles. In return for their efforts, miners are rewarded with newly minted Zcash tokens. This way the Zcash network remains stable and new ZEC tokens are added to the supply.

How Zcash Mining Works? 

The way this usually works is the miners use a proof-of-work (PoW) algorithm called Equihash to solve cryptographic puzzles. The first miner to solve the puzzle gets rewards in the form of ZEC tokens and transaction fees. 

In the beginning as mining was easier the miners could just use their home setup to generate new blocks. However it’s become rather difficult now due to network difficulty which is why specialized ASIC mining setup is required to mine ZEC tokens. 

History of Zcash Network 

It all began when crypto users started to demand a network that would keep all their transactions anonymous. 

So in 2013 a group of cryptographers took it upon themselves to build a solution. Many researchers from MIT, Johns Hopkins University and other institutions came together and created the Zerocoin which became Zerocash in 2014.

After a couple years (In 2016) the Zcash network was founded by a team led by Zooko Wilcox-O’Hearn. This launch was notable because of the zk-SNARKs technology that we have already discussed. The network got $3 Million in funding during its ICO.

In the initial days Zcash was accepted with enthusiasm as it solved a problem hundreds of thousands of traders were facing. As we already know the thing that made it so popular was the way it could hide details of transactions while making sure it’s authentic.

Since the launch of Zcash ZEC crypto there have been many major upgrades in the system. One of the major updates was the Overwinter update that occurred in 2018. This update was introduced to improve transaction performance and network stability.

After that in 2020, Zcash Foundation collaborated with ECC (Electric Coin Company) to introduce the Canopy upgrade. This upgrade was done to add a new funding model to the system to make it more sustainable. This upgrade also helped the Zcash network as it included a development fund to support ongoing research, development, and community projects. 

To this day the project is making new developments to make Zcash ZEC crypto more reliable and efficient. In Fact according to a survey by Exploding Topic, 85% of global adults want to protect their online identity. This shows the need for projects like Zcash.

Additional Features of Zcash 

Besides the types of addresses and zk-SNARKs technology there are no features that make Zcash ZEC token one of the best privacy-focused networks. Next up are those additional features so keep reading. 

Scalable Privacy 

In the beginning a lot of computational power was needed to authenticate shielded transactions. But thanks to the Sampling upgrade this problem was resolved forever. The main focus of this upgrade was to give Zcash network the capacity to handle increased usage without compromising on privacy or performance.

Viewing Keys 

Think of viewing keys as the keys to a door. Only the people with the keys can open the door and see what’s inside and people who don’t have the key or permission, cannot see what’s inside. The concept of viewing keys is also similar to the Zcash ecosystem. 

These keys allow users to share transaction details with trusted third parties without compromising the overall privacy of their z-address. This is especially useful in case of an audit where you need to provide the necessary details to show that your transactions were legitimate.

Interoperability 

As we know Zcash is an open-source network which means anyone can integrate it into their decentralized applications to provide users with a way to make transactions anonymously. ZEC can be integrated with other blockchains and DeFi ecosystems where they can leverage it to provide anonymity to their users.

Decentralized Governance 

The Zcash ZEC crypto uses a decentralized governance model so ask the community before making any major upgrades. This way the community remains part of the overall network decisions. They also have a Zcash Improvement Protocol in place which allows the community members to propose changes. After this there’s a voting to see how many people agree or not.

Compliance-Friendly Features 

The whole point of using the Zcash network is to remain anonymous. However, they have certain features that allow users to comply with some regulations. The network offers Viewing keys and selective disclosure options. This way the users can provide the necessary information to regulators or auditors if necessary. 

Transaction Privacy Enhancements 

There’s still a long way to go for Zcash. They have planned a few upgrades in the future particularly to enhance transaction privacy and usability. For instance, Halo 2 upgrade is expected to improve the scalability and efficiency of zero-knowledge proofs. This will make shielded transactions even more secure.

Zcash vs Monero vs Bitcoin 

As Monero is a direct competitor of Zcash, it’s only fair to make a comparison between the two. So here’s the comparison some of you might have been waiting for. 

Advantages of Zcash 

So now we’ve gone through all the basic information about Zcash ZEC crypto that is there to know. It means that it’s time to look at its advantages which include:

Wide Adoption 

ZEC is being used widely in various sectors, such as finance, commerce, and nonprofit organizations. It’s also an attractive option for people seeking privacy and security. The wide adoption of ZEC crypto shows how reliable and effective it has been as a privacy-focused cryptocurrency. 

Enhanced Privacy 

Zcash is well-known for the strong suite of privacy features that it offers. These ensure that the user has complete control over their personal and financial information. Because of the option to choose between transparent or shielded transactions the users have the flexibility to either use privacy or not. 

However a study revealed that 99% of Zcash users fail to use the privacy features to keep their transactions safe and as far away as possible from the public.

Selective Disclosure 

Zcash has thought of the project thoroughly. They’ve also added a way by which the users can disclose information to selective individuals. This is particularly useful in scenarios of regulatory compliance. As a user you can choose which people to show the transaction details and from which to hide from by providing viewing keys. 

Security and Immutability 

The next advantage of using Zcash is its security. As the network uses blockchain technology you can rest assured that your transactions are safe from tampering or unauthorized access. All this provides a high level of security and reliability. 

Disadvantages of Zcash 

We already know that there’s nothing in this world that doesn’t come with some disadvantages. It’s the same cor Zcash ZEC token as well. So here are some of the disadvantages of the Zcash network. 

High Inflation 

In the last few months Zcash has been a victim of high inflation rates as compared to other projects. High inflation can devalue an asset over time which is why long-term investors hesitate to put their put into such a token. If this problem isn’t solved, investors could start taking out their money before their assets devalue. 

Not Unique to zk-SNARKs 

You might think that the zk-SNARKs technology is only available to the Zcash network but that’s not true. There are many other cryptocurrencies now that use this privacy mechanism to keep their users anonymous. If in future there are more projects with such capability, the uniqueness of Zcash’s privacy features could take a hit. 

Alternative Privacy Solutions 

In 2016 when Zcash was founded there were no competitors. However now that many people have understood the value and demand for privacy, there’s been an increased interest in such projects. 

For one there’s Monero which is a direct competitor of Zcash and provides privacy by default. After that there are some Ethereum-based solutions like zk.money and Aztec which are now competing with Zcash as well. 

Wallets Compatible with ZEC Tokens 

According to the Zcash ecosystem, the wallets most compatible with Zcash include the following: 

Conclusion – Future of Zcash ZEC Token 

Zcash has come as a savior for people who love to remain anonymous. This project addresses the limitations of tokens like Bitcoin with extra security and privacy. It provides the users with a way to maintain their right to privacy. Because of this unique proposition Zcash ZEC has been a significant player in the crypto space. 

If we look at the future of Zcash token we’d see that it’s poised with exciting developments. The founder of Zcash has suggested a transition from Proof-of-Work (PoW) algorithm to Proof-of-Stake (PoS) method. By using PoS the node providers provide ZEC tokens as collateral which could be forfeited if they don’t act in the best of the network’s interests.  

If this method is implemented, it will enhance the network’s privacy, security and reliability. But only time will tell if they make this transition or not as it will make it riskier for shielded wallets. Let’s see what Zcash does in the future now. 

Frequently Asked Questions 

What is Zcash used for? 

Zcash is mainly used for private transactions. It offers a platform to users who want to keep their financial details confidential while performing a transaction. This makes Zcash an ideal choice for those who value their financial privacy and want their transactions to remain discreet.

Is Zcash Legal to Use? 

Yes Zcash is legal in most countries as it provides the option to disclose private information by using viewing keys. However there are a few regions where cryptocurrency is banned outright. So using Zcash in such regions could cause trouble for you. Check your local regulations for more info.

How Does Zcash Ensure Transaction Privacy? 

Zcash uses a technology called zk-SNARKs (zero-knowledge proofs). This technology ensures that transaction details are hidden from the public while still being verified as valid. The private addresses are sent ahead as z-addresses, also known as Shielded addresses.

Can I Choose Between Private and Transparent Transactions with Zcash? 

Yes, Zcash allows you to choose between transparent (public) transactions and shielded (private) transactions. Unlike Monero which is private by default, Zcash provides the users with the option of either hiding the transaction details or not. 

Is Zcash Mining Profitable? 

Zcash mining can be profitable if you use specialized hardware like ASIC miners. You can also join mining pools to increase your chances of earning rewards by combining computational power with other pool members.