What is Zcash?
Based on Bitcoin’s codebase, Zcash is a decentralized P2P crypto network that focuses on privacy and user anonymity. Although the network was created from a fork of Bitcoin’s codebase, Zcash has its blockchain and cryptocurrency. The network has adopted zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge), allowing nodes in the network to validate transactions without revealing any sensitive information about these transactions.
One common misunderstanding is that most cryptocurrencies, including Bitcoin (BTC), are truly anonymous. What this means is that although they do not directly reveal users’ identities, each user has a public address or an address that can be traced through data science and blockchain forensics. On the other hand, although Zcoin transactions are still relayed through public blockchains, unlike other cryptocurrencies, in a Zcoin transaction, by default, the sending and receiving addresses or the transaction amount is hidden from the public. Moreover, users can also choose to make such data public. Zcash was first released on October 28, 2016.
Who Created Zcash
In May 2014, the Zerocash whitepaper was released through joint efforts of researchers from universities around the world. Later, on October 28, 2016, the Zcash network was officially launched by a company named Electric Coin Company (ECC). Initially, the network was based on Bitcoin’s codebase.
How Zcash works
Apart from its privacy features, Zcash operates similarly to other cryptocurrencies. Both shielded and unshielded Zcash transactions are verified by nodes and recorded on the blockchain. Blocks are added by an open network of computers using an algorithm called Equihash, which calculates the amount of RAM a miner devotes to securing the blockchain. This design was meant to mitigate the impact of specialized mining equipment, allowing smaller computers to better compete for rewards. Another uncommon attribute of Zcash is how the cryptocurrency is distributed. For the first four years of the blockchain’s operation, 80% of its block reward was programmed to go to miners, with 20% allocated to the Electric Coin Company, the Zcash Foundation as well as some of their key employees and stakeholders. Furthermore, Zcash addresses are either private (z-addresses) or transparent (t-addresses). Between these two types of addresses, there are four transaction types. A Z-to-Z transaction appears on the public blockchain, so it is known to have occurred and that the fees were paid. But the addresses, transaction amount, and the memo field are all encrypted and not publicly visible. This type of encryption is only possible through the use of zero-knowledge proofs. A T-to-T transaction works just like Bitcoin: The sender, receiver, and transaction value are publicly visible. The two Zcash address types are interoperable, and funds can be transferred between z-addresses and t-addresses.
How to get Zcash
You can get Zcash via mining, or purchase Zcash on an exchange. Like Bitcoin, Zcash uses proof-of-work (PoW) and has a maximum supply of 21 million ZEC. Like most cryptocurrencies, Zcash relies on miners to add transactions to the blockchain. The first miner who managed to complete the correct computation of a block will receive the standard block reward from the network, as well as the service fees involved in the transactions they recorded into that block. As an advanced cryptocurrency, Zcash is available on many mainstream exchanges, including Binance, Huobi Global, BKEX, OKEx, etc.