Zcash is a cryptocurrency. It can be said similar to Bitcoin although it has many additional features. Zcash is a fork of the Bitcoin blockchain with different security protocols and a hashing algorithm.
The coin can be mined on computers and devices. The best way to mine the currency is on dedicated systems named as application-specific integrated circuits.
Who Is The Inventor Of Zcash?
The founder and the Chief Executive Officer (CEO) of the company is Zooko Wilcox-O’Hearn, an information security expert and cryptography analyst. The Zcash protocol was developed by him in collaboration with the research team and scientists from Massachusetts Institute of Technology (MIT), John Hopkins University, Technion, and Tel Aviv University.
The researchers Eli Ben-Sasson, Christina Garman, Alessandro Chiesa, Ian Miers, Madars Virza, Matthew Green, and Eran Tromer had a strong premonition that there were security flaws in the tracking of the Bitcoin blockchain transactions. They proposed an advanced currency. In 2015 these scientists created an Electric Coin Company (ECC), Zerocoin.
3 million US Dollars were raised by the ECC as an initial fund to develop the Zcash protocol.
Later in 2017, The Zcash Foundation was launched which had an initial endowment of 273,000 ZEC. The endowment was released from the “Founders Reward.”
What Exactly Is Zcash, ZEC?
Zcash is a fungible cryptocurrency. It can be used as a privacy coin to make digital payments that can be kept anonymous. The privacy of the transactions is ensured by employing a cryptographic tool. The security protocol used by Zcash to ensure the information of the parties involved in a transaction is not revealed is zk-SNARK.
In the majority of other cryptocurrencies, the transaction details are transparent. zk-SNARK makes possible full transactions. This is the kind of transaction in which the details of the sender, the recipient, and the amount are encrypted.
It is not possible to easily penetrate into the Zcash payments nor it can be tracked. This is due to the fact that all the fungible tokens are exactly the same versions and it does not contain the transaction history.
The smallest unit of ZEC is called the zatoshi which equates o 0.00000001 ZEC or one hundred millionth of a ZEC. As of 2021 August there is approximately 12.5 million Zcash in circulation.
Zcash History
Zcash Through The Years
In May 2013, a team conducting research at John Hopkins University proposed the idea of a privacy protocol that was intended to be built as an extension of the Bitcoin network. It was named as Zerocoin.
Three years later in January 2016, the announcement of the launch of a privacy coin inspired by Bitcoin, named as the Zcash company, and the Zcash project was made by Zooko Wilcox.
Upon the launch of Zcash, a sudden market interest was seen and the demand for the coin had spiked by more than 4,000 US Dollars in value. After a few weeks time, the price went below 100 US Dollars.
Later in the October of the same year, Zcash was launched. In the March of the following year 2017, the launch of the Zcash Foundation happened with the goal to guide the evolution of the Zcash network.
In the next year, in October 2018 Zcash activated an upgrade to improve the efficiency of the cryptography of the platform. The upgrade was named as the Sapling Upgrade.
The Sapling Upgrade is one of the two core protocol upgrades. The other one is the Overwinter Upgrade. Both were released as a part of the upgraded series called the “Sprout Series”.
In December 2019 Zcash released a third network upgrade by the name Blossom. In 2020 the fourth and fifth network upgrades were released and they were called Heartwood and Canopy, respectively.
Features Of Zcash:
1. Zcash Transaction Types
There are four major Zcash transaction types. They are:
- Private Transaction
- Shielding Transaction
- Deshielding Transaction
- Public Transaction
2. Zcash Addresses
Zcash addresses are of 2 types. They are:
- Private addresses – that start with a ‘z’
- Transparent addresses – that start with a ‘t’
3. Zcash Viewing Keys
A Zcash view key allows read-only access to someone with the Z-address user has shared the transaction details to. This kind of selective disclosure is allowed in cases of tax regulations, auditing, and anti-money laundering.
4.Zcash Funding Structure
The coins are minted and split in an 80:20 ratio when a new block is mined and added to the end of the blockchain. As per this ratio, 80% of the block reward is given to the miners and the rest 20% of the block reward is given to the founders.
The founders reward is distributed by dividing them into 3 parts. 8% of the founders reward is distributed to Major Grants Fund, 7% to ECC, and 5% to Zcash Foundation.
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Other Features
- Low fee transactions
- Message encryption
- Transaction expiration. Default expiry is set at 50 minutes which is 40 blocks. This is to reduce mempool bloat.
- Multi-signature transactions; available only on public transactions.
What Can You Use Zcash For?
Zcash has the influence of Bitcoin in it. Zcash has a design that enables buyers to use it for daily purchases. Owing to the privacy features that are embedded in the cryptocurrency it could also be utilized to receive and send transactions by keeping an anonymous profile.
Zcash V/S Bitcoin
1. The platform of Bitcoin offers transparent transactions and maintains anonymity. Although any person who wants to can trace the details of the parties involved in the transaction.
Zcash differs in this aspect as it has the veil of encryption over the transactions which means that the details of parties can not be traced.
2. The hashing algorithm used by Bitcoin is SHA-256 whereas the hashing algorithm used by Zcash is Equihash, which is a proof-of-work mining algorithm which is based on the Generalized Birthday Problem concept.
The peculiar feature of Equihash is that it is not compatible with the software and hardware designed for Bitcoin mining. Equihash has increased hashing times and larger blocks which increases the hash rate of the network. The processing power of the miner network is termed as the hash rate of a cryptocurrency.
3. Bitcoin has a block time of 10 minutes while Zcash has a block time of 75 seconds.
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