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A Beginner’s Guide to Zcash – Everything You Need to Know

  • Zcash (ZEC) cryptocurrency; physical concept Zcash coin on the background of the chart

Zcash (ZEC) is another cryptocurrency like Bitcoin but with a few different features. Like Bitcoin, it is based on a decentralised blockchain but allows for anonymity behind transaction amounts and parties involved. In Bitcoin, if you know someone’s address you can follow their transactions and you can see which all the addresses and their transaction amounts – so it’s quite clear how much money is moving around, with Zcash all the information is encrypted, part of its appeal.

What is Zcash

Zcash is a privacy-focused blockchain and cryptocurrency that was developed in response to bitcoin’s flaws. It uses the same algorithm as bitcoin but improves upon it by enabling semi-transparent processing. In this implementation, user transaction data is revealed selectively.

Zooko Wilcox, Founder and CEO of Zcash, summarized the project:

“Zcash is a new blockchain and cryptocurrency which allows private transactions (and generally private data) in a public blockchain. This allows businesses, consumers, and new apps to control who gets to see the details of their transactions, even while using a global, permission-less blockchain.”

It’s easiest to give an overview of the features of Zcash with the infographic:

Zcash features

Zcash applications

While the transparent and decentralized nature of cryptocurrencies has multiple applications for consumers, their use within the financial ecosystem presents problems. In short, Zcash’s unique selling point is its biggest downfall. Sorry to ruint he magi for everyone but the financial system built on secrecy. The establishment does not want a completely transparent marketplace. If transactions involving market positions and balances were to be made public, it would be fairly easy to game the system between competitors. Another consequence would be a logarithmic increase in their rate, resulting in a frenetic pace of changes to the market. As flash crashes due to high-frequency trading have already shown, such developments can be harmful to the overall health of markets.

The tech part (briefly)

Zcash claims to have invented a new type of distributed ledger called “zero-knowledge security layer” or ZSL. ZSL can be stacked on top of existing blockchain for enhanced functionality. It supports semi-transparent transactions, which can be used in financial marketplaces. It can basically reveal data selectively. E.g. they can divulge necessary data, such as date and time of a transaction, for public blockchains, but do not the identity of transacting parties and the values involved. Financial powerhouse JPMorgan Inc. (JPM) has already inked a partnership with Zcash to use its technology for Quorum, an enterprise-ready distributed ledger, and smart contract platform.

Another important application of Zcash lies in protecting consumer data. Financial transactions on a public blockchain are transparent and, therefore, less susceptible to manipulation by intermediaries. There are problems though, it makes all financial information relating to all transactions completely transparent. In a practical scenario for anyone, globally, it would enable patients to pay their medical bills without displaying their contents on a public blockchain. It can also be used to show that a user has made tax payments without displaying details, such as total amount paid and deductions.

Buy Zcash from the exchanges

Some of the popular Zcash exchanges are:

  1. Cex: Buy using Credit/Debit card instantly
  2. Binance: Supported pairs are ZEC/BTC, ZEC/ETH
  3. Bitfinex: Supported pairs are ZEC/BTC, ZEC/USD
  4. Kraken: Supported pairs are ZEC/BTC, ZEC/USD, ZEC/EUR
  5. Bittrex: Supported pairs are ZEC/BTC, ZEC/ETH, ZEC/USTD

Popular Zcash wallets

Some of the popular Zcash wallets are:

  • Mobile wallets – Coinomi (Android), Jaxx (iOS, Android)
  • Browser/web wallets – Jaxx  (Chrome Extension),
  • Desktop wallets – Jaxx (Windows, Mac, Linux)
  • Hardware wallets – Ledger Nano S, Trezor

The future – looking ahead

Zcash is definitely one of the hottest and the most exciting coins out there right now with growth potential. It has been performing steadily relatively since its inception.

Zcash price chart

As of writing, the Zcash market cap stands at $1,396,928,925. The cost of 1 Zec stands at $355.41.

It is pretty evident to see why people value the privacy provided by Zcash in an increasingly transparent world especially after the Facebook/Cambridge Analytica scandal

What now?

Zcash probably won’t continue on its 7-day bull run forever but the gains its making now will certainly protect Zcash from making any huge losses, when the market drop eventually takes hold of it. Zcash has a lot to thank Gemini for here, this is a case of a very nice coincidence and of course a little bit of luck. The future for Zcash looks bright and it seems like there will always be a need for its features and tech companies seeing value in its application.

By | 2018-05-21T08:44:10+00:00 May 21st, 2018|Cryptocurrency Guides|0 Comments

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