When Bitcoin was created the first time, everybody thought it was the best revolution in history. Bitcoin enabled people to transact with each other directly on the internet by ignoring the fiat system that has been controlled by the central banks for a very long time.
However, one thing that people often ignore is the fact that Bitcoin is pseudonymous and not anonymous. While it’s not easy to identify Bitcoin wallet addresses, but they are still visible publicly. This fact has made some people feel uneasy with Bitcoin transfers.
Fortunately, we have ZCash and several other privacy-centric coins. Through some technological advancements, they could make their crypto transactions to become private. So, how does ZCash able to “mask” their transactions, and why is it considered to be one of the most advanced privacy coins in existence? Let’s find out.
Brief History Of ZCash
It all started in 2013 when a crypto privacy protocol Zerocoin was developed for the first time. One year later, in 2014, this Zerocoin protocol was improved to become Zerocash. This Zerocash protocol was the one that inspired the creation of ZCash. The main individual behind ZCash is the Chief Executive Officer Zooko Wilcox.
One thing to keep in mind is that ZCash actually started as a fork of Bitcoin, and they improvised Zerocash protocol privacy. ZCash’s genesis block was created on October 28th, 2016, and it did not take long before it became one of the crypto community’s favorites. In fact, it is one of the most popular privacy-centric coins at the present time.
Important history in Zcash’s journey was when it became publicly available for the very first time. At the time, Zcash pumped extremely highly, to the point of $4,293.37 per coin. Nevertheless, the price crashed very fast to the point of $45, just a few months afterward.
Technological Features Of ZCash
As mentioned earlier, ZCash is a privacy-centric coin where public eyes cannot track the movement of its blockchain transactions. ZCash can achieve this goal by using a technology that they call zk-SNARKS. Before we get into zk-SNARKS, it’s better if you know the basics about “zero knowledge proof”
Zero knowledge proof basically is a system where someone can prove that his statement is valid without the need to reveal any key information to the verifier. The analogy works like this. Let’s say there are two people, Eric and John. Eric tells John that he has the key to John’s cupboard. John tells Eric to prove it to him.
So, Eric goes into John’s room, and he unlocks John’s cupboard without John being inside the same room. By doing this, Eric has proven that he has the key to John’s cupboard without showing the actual key to John. John knows Eric truly has the key because his cupboard was previously locked, and nobody went to his room except Eric. There’s also no damage to the cupboard, so obviously, the statement that Eric has the key is actually true.
This is how zero knowledge proof works. zk-SNARKS works similarly to the above analogy. zk-SNARKS is Zero-Knowledge Succinct Non-Interactive, which means an easy path to verify zero-knowledge proof in the blockchain ecosystem. In other words, you can do transactions without the need to reveal your key information to the verifier.
The difference between ZCash and Bitcoin is that you always need to validate a Bitcoin transaction by connecting receiver and sender addresses. By doing this, the output and input values in the Bitcoin network can also be proven.
However, zk-SNARKS do it differently. With zk-SNARKS, the wallet addresses and the values of the transaction can be kept secret from the public eyes. zk-SNARKS allows the sender to prove both input and output values even with a shielded transaction. Not only that, the sender can also reveal private spending keys for a form of evidence that the same sender is the one who truly authorizes the transaction.
Within the Zcash ecosystem, there are two kinds of wallet addresses. They are called the Z-address and the T-address. The T-address basically means Transparent, while the Z-address is to keep some information hidden for privacy reasons. On private transactions, ZCash utilizes z-address.
Even though the privacy feature is quite cool, ZCash is not known for its speed. It has only 27 transactions per second (TPS) capabilities. Most ZCash devout supporters only support the coin for its technological privacy features and not for its speed.
Competition In The Privacy Space
Privacy is always an interesting topic. There are several major players in the privacy space, with mainly Monero taking the default attention. Yes, Monero is considered the biggest name in the privacy coin space, even more than ZCash. There is also Dash, which was started as another privacy coin, but it got rebranded. Nowadays, Dash’s focus is to be used as a fast and cheap coin for merchants in developing countries. Of course, they still have their own version of private transactions.
There are also other privacy-centric coins, but mostly Monero, Dash, and ZCash are the big three that people recognize the most.
ZCash is a strong privacy-centric coin with huge acknowledgment from the likes of Edward Snowden and even Quorum, JPMorgan’s private blockchain ecosystem. It is believed that Zcash might not be fast enough as a coin, but its zk-SNARKS privacy feature is considered to be a big advancement for the crypto space in general.
Personally, I think ZCash has a huge future as long as they can improve the speed and adoption rate. That being said, privacy-centric coins have a lot of potential problems with regulators all over the world, due to the inability to track their transactions. Whether ZCash can eventually overcome these regulatory issues, it remains to be seen.
If you are into privacy coins or you are a bit too paranoid with everybody who can keep track of your crypto wallet movements, I strongly advise you to try ZCash. It’s available on most decent crypto exchanges such as Binance or Huobi or DigiFinex. Multi-crypto wallet applications typically already support ZCash’s transfer, send, and receive features.