Zcash

Zcash (ZEC) is a decentralized digital currency that prioritizes user privacy and anonymity. The network employs zk-SNARK zero-knowledge proof technology, enabling nodes to validate transactions without exposing any sensitive details regarding them.

It is a common misconception that most cryptocurrencies, such as Bitcoin (BTC), offer true anonymity; in reality, they are pseudonymous. Although these systems do not directly disclose user identities, every participant possesses public addresses that can be linked back to them through blockchain forensics and data science techniques.

In contrast, while Zcash transactions are still broadcast on a public blockchain, they differ from pseudonymous assets by defaulting to hidden sender and receiver addresses as well as concealed transfer amounts. Users do have the option to disclose this information if needed for auditing or regulatory compliance.

The project launched on October 28, 2016, having been initially built upon Bitcoin’s codebase.

Zooko Wilcox-O'Hearn, a cypherpunk, computer security specialist, and entrepreneur, established Zcash in 2016. He also created the for-profit Electronic Coin Company (ECC), which oversees Zcash development.

With over 25 years of experience in cryptography and information security, Wilcox-O’Hearn has worked on various initiatives such as the defunct DigiCash electronic money firm, the Mojo Nation peer-to-peer data storage software, and the Tahoe Least-Authority File Store filesystem.

Additionally, he started Least Authority Enterprises, a tech firm dedicated to enhancing digital security and protecting privacy rights, and co-developed the BLAKE3 cryptographic hash function.

Zcash distinguishes itself through optional anonymity, providing a degree of privacy that pseudonymous networks like Bitcoin or Ethereum cannot match.

Users can send ZEC via two methods: transparent and shielded. Transparent transfers function similarly to Bitcoin, the codebase from which Zcash was originally derived. These occur between public addresses and are logged on an immutable public ledger, making all key details—such as sender and receiver addresses and the transferred amount—visible to anyone online.

While these public transactions do not explicitly disclose user identities, leaving only public addresses as visible identifiers, advances in blockchain analysis by data scientists and law enforcement in recent years have made it fairly reliable to link a public address to its real-world owner. This development essentially renders private transactions impossible on purely transparent chains.

In contrast, shielded ZEC transactions utilize zero-knowledge succinct non-interactive arguments of knowledge, known as zk-SNARKs, to facilitate fully anonymous transfers on a public immutable blockchain. Although the ledger records that a transaction occurred, it keeps the sending and receiving addresses and the amount sent hidden from public view.

This design enables Zcash to grant users privacy rights while maintaining the benefits of a decentralized, permissionless digital currency.

Zcash (ZEC) shares a similar tokenomic structure with Bitcoin, functioning as a scarce, mineable asset capped at a total supply of 21 million coins.

New ZEC enters circulation through “block subsidies.” Each time a miner adds a new block to the blockchain, fresh coins are minted and allocated between a “miner subsidy” and a “founders’ reward” in an 80/20 split. To decelerate issuance as the supply nears the 21 million limit, this block subsidy undergoes periodic halving.

The miner subsidy is awarded to the individual who mines the block, while the founders’ reward supports the Electronic Coin Company (ECC), its employees, the Zcash Foundation, and ECC founders. On Nov. 18, 2020, triggered by block 1,046,400 under the Zcash Canopy upgrade, the block subsidy was halved from 6.25 ZEC to 3.125 ZEC. This upgrade also eliminated the Founders Reward; the remaining 20% is now distributed to the Major Grants Fund (8%), ECC (7%), and the Zcash Foundation (5%). The fifth network upgrade, Zcash NU5, is estimated to launch on the testnet on Sept. 30, 2021.

Since its inception, there has been significant interest in trading ZEC against AUD and EUR.

The Zcash network relies on the SHA-256 proof-of-work hash function for its security. This algorithm is part of the SHA-2 family and is the same one used by Bitcoin.

Zcash holds a prominent position among cryptocurrencies. You can purchase ZEC on several leading exchanges, including:

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