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Wednesday, May 31, 2023

What are The Basics of Zcash?

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Individuals looking for anonymity have probably heard about Zcash. This is a privacy-focused cryptocurrency forked from Bitcoin but with a few improvements. With the use of advanced cryptography and security protocols, users get privacy. But is it always like that? What makes Zcash’s anonymous model so special?

Quick Dive on Zcash vs Bitcoin

Apart from ZEC to BTC exchange rate difference, there are other factors that set these cryptocurrencies apart.

The Bitcoin community holds its heads high for allowing people to hide their identities. All transactions are transparent, but the users’ names are replaced with pseudonyms. We all know that things are not as smooth as they claim. The transaction history and other open sources can disclose transaction participants.

Zcash developers came together in 2016 to create an anonymous platform as a Bitcoin alternative. It is not as private as Monero (XMR) (its transactions are untraceable by default). Users still love Zcash for its security and relevant anonymity. The thing is that Zcash doesn’t conceal transaction information. It rather encrypts it, making it nearly impossible to track it.  

So, Zcash is a platform where anonymity and crypto regulations came to terms. Here, you can pick whether you want to keep the transaction data transparent or private.

Zcash Main Features

So, what makes Zcash peculiar? Read on to study its features.


There are two address types on the Zcash platform: private, also known as shielded (z-addresses), and transparent (t-addresses). Transparent addresses keep the transaction information open but preserve identity anonymity through a pseudonymous system. Shielded addresses leverage Zcash’s encryption, hiding both addresses and transactions. These addresses are interoperable, so you can make transactions between private and transparent addresses. 


Considering different address types, both shielded and transparent transactions can take place on the Zcash platform. 

When two t-addresses take part in carrying out the transaction, data about it (transaction values and sender/receiver pseudonyms) become visible and traceable. Other transactions, even between a transparent and shielded address, get encryption protection. Still, at some point, they can be traced because they will be registered on the public blockchain.

Viewing Keys

Those z-address holders who want to disclose transaction details to a limited circle of people get a view key. It unlocks access to reading data but does not provide any authority for managing the address. Thanks to this, address owners get the perks of selective disclosure, when they control whom they want to share transaction data with.

How ZEC Works

ZEC is a privacy coin in the Zcash ecosystem, which is produced through mining on ASIC machines. The Equihash algorithm guides this process, which slightly modifies the proof-of-work (PoW) mechanism for quicker and more efficient mining. ZEC coins can be used for buying goods and services as well as for crypto swapping.

The platform uses the zk-SNARK security protocol for decentralized anonymous payments (DAPs). It relies on a cryptographic technique that verifies the transaction parties and allows them to reach a consensus. All without disclosing sensitive information.

Zcash is known for its high throughput — from 6 to 26 TPS, depending on the transaction type. At the same time, low transaction fees make the Zcash ecosystem stand out. The default transaction fee is 0.0001 ZEC, which is much lower compared to other platforms. 

Even so, Zcash remains a relatively small platform. To attract more users, it has to overcome scalability issues. Right now, it has been in progress, so we are yet to see whether Zcash developers will find a solution in the nearest future.

Is Zcash a Good Investment?

If you seek flexibility and would like to be able to make public and private transactions from a single platform, Zcash is a good choice for you. Yet, if you are interested in complete anonymity, look elsewhere and make sure to use an anonymous crypto exchange. To avoid the smallest risk of your identity or transaction information being revealed, consider Monero — a more suitable currency to meet your needs.



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