What is Zcash?
As the official Zcash website states:
Zcash is a privacy-protecting, digital currency built on strong science.
As the necessity for solitude enhanced as big data became easily accessible, cryptocurrency users started searching other digital monies that may fill the privacy gap which Bitcoin might not.
Digital monies like Dash and Monero provide complex anonymization techniques that obscure trades in addition to the parties involved with these trades.
Another digital currency, ZCash, seems to provide a far larger level of fungibility by allowing its users to remain completely anonymous.
The Zerocoin protocol has been improved and transformed into the Zerocash platform, which was then developed into the Zcash cryptocurrency in 2016.
According to the Zcash whitepaper:
Zerocoin: a decentralized mix. Miers et al. [MGGR13] proposed Zerocoin, which extends Bitcoin to provide strong anonymity guarantees. Like many e-cash protocols (e.g., [CHL05]), Zerocoin employs zero-knowledge proofs to prevent transaction graph analyses. Unlike earlier practical e-cash protocols, however, Zerocoin does not rely on digital signatures to validate coins, nor does it require a central bank to prevent double spending. Instead, Zerocoin authenticates coins by proving, in zero-knowledge, that they belong to a public list of valid coins (which can be maintained on the blockchain). Yet rather than a full-fledged anonymous currency, Zerocoin is a decentralized mix, where users may periodically “wash” their bitcoins via the Zerocoin protocol.
Development of protocol enhancements and also the reference implementation is directed from the Zerocoin Electric Coin Company, known as Zcash Company.
The founder and CEO of Zcash Company is Zooko Wilcox-O’Hearn. The cryptographer Matthew D. Green in Johns Hopkins University can be a part of the founding group. Roger Ver was among Zcash Company’s initial shareholders.
Zcash Technical details
|Initial release||28 October 2016|
How was Zcash founded?
Zooko Wilcox-O’Hearn set the basis of Zcash in October 2016 in a bid to tackle an open monetary system together with all the privacy feature that net users desired.
Bitcoin is a pioneer in the open monetary system, also ZCash attempts to keep the exact same structure but with solitude and fungibility included. Fungibility is the simplicity at which a commodity could be substituted for a second, which can be important in the crypto world since it ensures that a single consumer’s coin is like another.
It follows that while all transactions are listed on a blockchain, the transactions are encrypted and may only be seen by users which were granted access to them.
Most electronic currencies which provide anonymity like Monero, rely on personal keys that are constructed with alphanumeric characters. Users from the crypto world are also provided with a unique public address that functions exactly like an IP address.
The general public address must receive funds from a different user, meaning the sender needs to receive the speech so as to ease the transfer.
But with sufficient trades made over time, public addresses could be connected to those trades, which makes it simpler for inquirers to spot the public address holder. Additionally, this is where the amount of fungibility comes to play.
Why is Zcash different than Bitcoin?
If a vendor of a product can monitor a purchaser’s previous transactions dependent on the public address given to the seller from the purchaser, the seller might feel inclined to refuse payment from your purchaser when the disclosed purchase history of their purchaser doesn’t align with the seller’s faith or ethical stance.
ZCash uses a cryptographic instrument named Zero-Knowledge Proof that allows two users to participate in trades without either party showing their address.
Zero-Knowledge Proof makes ZCash transactions untraceable on its own blockchain by obfuscating the addresses of both parties, in addition to the amount required in every transaction.
Since the addresses listed on the blockchain are behaving like protection and aren’t the true user’s payment speech, it is near impossible to follow the route of any funds to its sender or recipient. That is similar to Bitcoin and several different blockchains which reveal the sum moved from one’s real public address to another.
Zero-Knowledge Proof gives a high degree of fungibility given that a party involved in a trade isn’t privy to another party’s individuality and consequently, payment history and thus can’t deny his coin repayment.
ZCash along with other exceptionally anonymized cryptocurrencies like Monero are usually criticized for possibly giving a safe harbour for untraceable transactions linked to illegal activity.
Why do we need a higher degree of privacy using cryptocurrency?
The usage of ZCash isn’t only for cybercriminals who take part in prohibited trades in the darknet. There are a lot of valid reasons why an individual could opt for anonymous cryptocurrencies like ZCash.
- Someone having a chronic medical condition who’d like to buy his tablets online anonymously;
- An organization who’d like to protect its trade secrets or supply chain information from rivals;
- Someone who’d enjoy legal solutions for a personal matter for example insolvency;
- people looking for anonymity for privacy reasons.
ZCash executed its first hard fork in June 2018, which had long been planned for the day that block 347500 had been successfully mined, and has scheduled a much larger hard fork for October of the same year.
In June 2018 took place the first hard fork of ZCash, which had been adjusted to match the mining of the 347500 blocks. In October 2018, a second and larger fork was scheduled.