What is ZCash? All You Need to Know
ZCash is a decentralized digital currency that emphasizes on transaction privacy. In this day and age when altcoins are fiercely battling each other in hope to top off Bitcoin, ZCash is definitely one of the most promising candidates. ZCash aims to increase transaction privacy, which is a current issue of the Bitcoin protocol. Whereas Bitcoin transactions are not linked to real names and addresses, they can be traced back to the location and the person they originate from. This is not the case with ZCash, as the developers implemented a unique feature called zero-knowledge cryptography. Grace to this, transactions can be approved and added to the blockchain in their encrypted format, so that no one can trace back to where the money came from.
What is ZCash?
ZCash is a fairly recent currency. Although the project started off in 2014, under the name Zerocoin, the branded ZCash project was launched in 2016. ZCash has a fairly impressive list of names behind it, including big corporations and famous Bitcoin developers. The protocol is based on a Bitcoin hard fork, namely Bitcoin Core, so you can think of ZCash as a distant relative of Bitcoin. ZCash also has a limited supply of 21 million units, and about 1/10 of that number is currently in circulation. Much like all the other big altcoins, ZCash’s purpose is of creating solutions and alternatives to Bitcoin’s problems. Their main contribution is the implementing of zero knowledge cryptography, which allows people to send fully anonymous transactions.
What is unique about ZCash?
Let’s take a look at this whole zero-knowledge cryptography protocol. When a ZCash transaction is made, it is encrypted based on a certain algorithm. Normally, miners would have to decrypt the information in order to confirm it and add it to the blockchain. However, the team behind ZCash has developed an innovative cryptographic method known as zk-SNARK, which can validate transactions without disclosing the information on the blockchain. In other words, zk-SNARK confirms that the transaction can take place, meaning the sender has enough ZEC to fund it, but without it linking back to previous transactions. This is a function called fungibility, in which every existing coin has to be linked to a previous array of transactions so as to confirm its origin and existence. Bitcoin uses fungibility to demonstrate the ownership of the coins, but ZCash doesn’t – ZEC is completely unlinked from its history, and no one in the network can trace back to how the sender got their hands on the coin.
ZCash offers both private and public sending options. If you opt for public sending, from a transparent address to another transparent address, everybody in the network will know where the money came from, and who received it. Naturally, the public transactions are much faster than private ones. However, if you need the privacy more than immediate confirmation, you can opt for private sending.
How to obtain ZCash?
So much for ZCash’s history and features – it’s time to find out how you can get your hands on some ZEC. ZCash can be obtained via mining or buying from an exchange. As far as mining is concerned, ZCash is based on an algorithm called Equihash, which is another advantage compared to Bitcoin. Equihash relies on high RAM requirements, which makes it ASIC-resistant – meaning the ZCash mining niche will not be controlled by ASIC computer manufacturers anytime soon. Instead, you can mine ZCash using regular CPUs and GPUs, but you might have to invest in a generous amount of RAM. If you’re not that fond of the idea of mining ZCash from home, you can also get an Equihash cloud mining contract. Companies like Hashflare have very reasonable prices and will let you mine ZEC without the side effects of having a miner rig in your house.
Another option is buying the coins from an exchange. Naturally, ZCash is not as widely supported as Bitcoin or Ethereum, so it will be harder to find an exchange that lets you purchase ZEC with fiat money. It’s easier to purchase Bitcoin first and convert them to ZEC, as most exchanges allow you to do that. However, there are also a few exchanges that let you purchase ZCash directly – including Poloniex and Bittrex.
As far as storage goes, ZCash is supported by software, paper, and even hardware wallets. Yes, even hardware wallets like Ledger and Trezor have special ZCash apps that allow you to store your ZEC on them. This is definitely an advantage compared to most altcoins, that can be hard to store safely.
In conclusion, ZCash is a promising altcoin that aims to solve some of the problems in the current Bitcoin protocol. With the implementation of zero knowledge cryptography, ZCash ensures that their transactions are completely anonymous, and the coins are unlinked from their past history. Lastly, ZCash can be mined and purchased rather easily and is even compatible with popular hardware wallets. This makes it one of the most accessible coins to add to your cryptocurrency portfolio in the year to come.