Zcash is a cryptocurrency that pays special attention to users’ privacy. In fact, it’s the main way this crypto is marketed — a privacy-protecting digital currency. Just like BTC or ETH, it is based on cryptography, but it features a slightly different underlying technology, which further improves the privacy level of all users.
Because of its privacy, many opt to convert BTC to ZEC. In the section below, we’ll explain what Zcash is and how it works to help you decide whether you should do the same. Read on.
The Nature of Privacy Coins
Even though cryptocurrencies are overall marketed as anonymous, that’s not actually true. There’s actually an effortless way to connect wallet addresses to people and connect the dots, which is why Zcash was created in the first place. With Zcash, only the participants taking part in a transaction will know the amount and the parties involved. However, anyone not taking part in the transaction (an outside observer) will have no access to such information.
That’s a great way to improve the security of all users. Unfortunately, privacy coins also laid the foundation for many illicit activities, as they are a perfect option for money laundering and criminal transactions.
The Zcash ecosystem is slightly different from the majority of other similar protocols, and the main difference is the introduction of two different addresses: the T- and Z-addresses. Moreover, it includes several features, such as zero-knowledge proof and multi-signature transactions.
T- and Z-Addresses
One of the ways ZEC achieves maximum security and privacy is by introducing a fully private address that’s based on the zero-knowledge proving system. This system basically shields a transaction and balances privacy. On the other hand, there’s the T-address, which is essentially like any other crypto wallet address, such as the one used for trading Bitcoin.
We won’t go into detail about how these addresses are coded, and all you have to know is that they add a layer of privacy compared to other cryptocurrencies.
Zcash uses the so-called zk-SNARKs, which are an innovative form of zero-knowledge cryptography. This is an acronym that stands for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. Of course, you are probably confused just as we are, as it’s a highly technical thing. However, you essentially just need to know what it does on the surface.
Technically, zero-knowledge proof allows one side (the prover) to prove to the other side (the verifier) that a statement is true. However, they don’t reveal any info except for the validity statement.
ZEC supports transactions that can only be verified by two or more parties before the transaction is executed. However, these types of transactions — called multi-signature transactions — are transparent in nature, meaning they cannot be private. Therefore, only transparent addresses can rely on these features, whereas shielded addresses must use the standard private consensus mechanism.
Halo Arc Update
The team behind Zcash is actively working on upgrading the network and further improving its security and privacy, and one of the main features of the Halo Arc update is to enable shielded-by-default transactions.
ZEC Price History
If you travel back to the very beginning of Zcash, you’ll notice that it started with a really high price, and then it immediately plummeted. However, that first price, which is the all-time high ($5,941) was a bit unrealistic.
ZEC’s price reached its realistic highest price on January 7, 2018, when the price was around $880. The coin’s price varied after that between $20 and $320.
ZEC Price Prediction
ZEC will probably never reach its first value, but it’s safe to assume that another wave of heavy investing could help the coin go over $880.
The Problems of Zcash Network
Here are some of the ongoing issues for ZEC:
- Zcash might not be ideal for long-term holders as the network is created in such a way that the assets devalue over time due to relatively high inflation.
- The zk-SNARK technology isn’t unique to ZEC anymore, as others started implementing it, including Ethereum.
- The entire Zcash project is operated by Electric Coin Company, making it relatively centralized and not that different from fiat companies.
Will Zcash Bring Revolutionary Changes to the Crypto Industry?
The team behind Zcash has proven over and over again that they are capable of innovating revolutionary features that will improve their coin. The downside of this is that most of these technologies are often quickly adopted by many other coins. Therefore, Zcash is bound to bring revolutionary changes, but the real question is — will these changes benefit ZEC and keep it relevant? If you believe ZEC is worth obtaining, visit https://godex.io/ to buy it.