Akarat Phasura/123RF

Zcash: Anonymous Money

  • 24 August 2017
  • Dylan Dedi

Zcash: Internet money. And bitcoin isn’t? What makes Zcash (ZEC) stand out? Like Bitcoin, ZEC has its own blockchain, which anyone can use to view transactions. Their main standout point, though, is its privacy for users of Zcash. Zcash holders can make anonymous transactions to each other while still using the blockchain’s public ledger to make immutable transactions. This can lead to a whole new level of blockchain applications to be built on ZEC’s blockchain. Zcash can be seen as the “cryptographic cryptocurrency.” Here are ten bullets to highlight and describe Zcash and its usability in our world.

1. Privacy

As mentioned in the introduction, Zcash’s main focus is its privacy settings. Bitcoin and Ethereum blockchains have had tokens created on them that hide transaction amount, or user identities, but never both.

Zcash Review
Source: z.cash

ZEC has a protocol called zk-SNARKS, a cryptographic zero knowledge proof that hides the transaction amount as well as the user, in a “shielded transaction.” This shielded transaction needs quite a bit of RAM (3gb) along with an entire copy of the blockchain downloaded to the user’s desktop. Unshielded transactions do not need this.

2. zk-SNARK

zk-SNARK stands for “zero-knowledge Succinct Non-Interactive Argument of Knowledge.” This means that the user who creates a shielded transaction can prove his/her transaction was theirs through a secret key while keeping the transaction anonymous to the public. The sender can prove to the verifier that this transaction (statement) is true without ever revealing to the verifier the amount. The verification is the truth of the statement itself (through secret key). This verification can happen almost instantly (milliseconds).

3. Zcash is a fork from the Bitcoin blockchain

Although ZEC has its own blockchain, it was created off of Bitcoin's blockchain. This means that Zcash used Bitcoin's blockchain as a foundation, and built upon it to make their own blockchain and token. Because Bitcoin is open source, it is easy to create your own blockchain off of theirs. Zcash has a list of changes they’ve made here.

4. Zcash is Proof of Work, but open to Proof of Stake

ZEC can currently be mined. They’ve changed Bitcoin’s algorithm to be able to mine every block in about 2.5 minutes, compared to 10 min on the Bitcoin blockchain. The block sizes are about 2mb and they use Proof of Work algorithm “Equihash” created by Alex Biryukov and Dmitry Khovratovich. Each block mined will create 12.5 ZEC, but this number will halve every 840,000 blocks mined.

5. Wikileaks accepts donations in Zcash

Although Wikileaks accepts donations in BTC and LTC, they have begun to accept Zcash as well. Wikileaks believes in ZEC’s anonymity stance and encourages those to donation, who do not wish to be known. Although polls preceded Ethereum to become Wikileak’s next form of donation (as well as Monero), Assange came to choose Zcash.

6. Zcash’s entire team is made up of Scientists and Engineers

Zcash has a large team involving many computer scientists and academics. Even the CEO is a computer scientist who has worked in cryptography for 20 years.

Zcash Review
Source: z.cash

They keep a stream of organizers who all have a record of being advocates of privacy technology, keeping the essence of the organization’s fundamental values true to everyone.

7. Bad people will use it

This was probably on everyone’s mind when Zcash was released. Anonymous transactions and users? Can’t this be used for drug traffickers and people who want to launder money? The answer is: yes. The Zcash team does not deny that this can be used for bad. Just like Tor, anything that uses privacy and anonymity will draw the attention of bad people.  But hey, you could make the same argument for the US dollar as you do for Z.

8. Good people will use it

The founders of Zcash firmly believe that privacy is a basic human right. The blockchain is a public ledger for everyone to see. While many of its functions can create a new world for us and our economy, it completely takes away privacy rights of everyone. If privacy is a basic human right, who knows what terrible things can happen in the future without it. Many internet advocates work towards privacy rights even if it can lead to bad people using it for terrible things. Zcash doesn’t want to find out what a 1984 world can really look like and is willing to take these risks to ensure privacy. 

9. Fixed monetary  system

Like Bitcoin, Zcash will have 21 million ZEC produced throughout its lifetime. This will take about 21 years. Every few years, a little bit more gets dumped out into the market, to keep investors interested for the long haul (instead of pumping and dumping).

10. Zcash is here to stay

With its longevity plan to keep ZEC producing constantly throughout the next 21 years, ZEC founders and investors want it here to stay. And with no other competitors working to make a private coin, it is necessary that Zcash stick around for when cryptocurrency becomes mainstream.  

Zcash Review
Source: z.cash

Zcash is a good reminder for us all that this blockchain revolution still needs to stay within the confines of the internet’s basic values;  privacy has always been a strong value of the open source community. Regardless of the price of Z now, everyone at some point will need to use it to send something (whether it be monetary or information) privately.

Where can I buy Zcash?

You can buy Zcash on several exchanges but our favorite exchange is Changelly.

Once you've made your purchase, Make sure you have a safe place to store it.  Check out a list of our Cryptocurrency Wallets!

About Dylan Dedi