Do you remember a few weeks ago when I shared with you the 6 best ways to guarantee anonymity while making Bitcoin transactions?
After writing that, I was thinking about what a headache it is.
I mean, how many checks does a Bitcoin user have to ensure before he/she is able to guarantee his/her anonymity.
Why not have a cryptocurrency that ensures total anonymity to its users?
Some of you might be thinking that having total anonymity is only required for criminals, but that’s not true. You can see my previous article on anonymous Bitcoin transactions where I share how you can be kidnapped or robbed if you don’t have financial privacy.
Moreover, in this data-centric world, I believe financial transaction data should be the most secure data there is.
Let me cite one example here…
Let’s say you stopped by an adult store to purchase something with your credit card. Here, your credit card leaves a digital trail within the merchant’s system. Let’s suppose the merchant’s billing server or your payment processor got hacked. Now, your data is publicly available on the internet.
Who knows what kind of repercussions this could have… Maybe it compromises your relationship, maybe it compromises your career, or maybe it leads to public embarrassment. The point is, your spending habits are now public knowledge.
But we humans, in the 21st century, are mostly oblivious to the fact that this kind of situation doesn’t need to happen.
We have cryptocurrencies that work upon ensuring complete anonymity of transactions.
The two most popular anonymous cryptos right now are Monero, which I have discussed extensively, and Zcash.
What is Zcash?
Zcash is a peer to peer (P2P) cryptocurrency like Bitcoin. But unlike Bitcoin, its sole priority is to focus on private, anonymous, and fungible transactions that Bitcoin can’t-do.
Zcash was forked out of Bitcoin and launched in October 2016, and it was previously known as Zerocoin. It is based on a special cryptographic protocol that shields a sender’s information, a receiver’s information, and the amount transacted between the two parties.
Zcash’s open cryptocurrency project uses a zk-SNARK protocol. This is a new cryptographic zero-knowledge proof protocol that ensures privacy, anonymity, and fungibility of Zcash coins.
However, privacy and anonymity are not implemented by default in Zcash, as it also has a transparent transaction functionality like Bitcoin.
So Zcash, by design, has optional anonymity and privacy features for users who want to use them.
How Does Zcash Work?
This protocol was developed in 2014 by scientists and research cryptographers at Johns Hopkins University, Massachusetts Institute of Technology (MIT), Technion-Israel Institute of Technology, and Tel Aviv University.
The Zcash Team is a unique amalgamation of engineers, advisors, and scientists. Some of them are listed below…
Zcash is open-source, but there is an official company behind it, which is pretty unusual for an open-source project. The company is Zerocoin Electric Coin Company, or ZECC, and is lead by Zooko Wilcox.
Zcash Coin Supply And Distribution
Zcash (ZEC) has a total maximum supply of 21 million coins, like Bitcoin, and is mined through a POW Equihash algorithm. All 21 million are expected to be mined by 2032, and just like Bitcoin, the Zcash block mining reward is cut in half every four years.
Zcash was not pre-mined or ICO-funded like many other crypto projects; instead, it follows a unique funding and distribution approach.
Zcash started with a closed investor’s group who funded the company with $1 million to kick off its development and operations. In return, these investors are promised a 10% reward of the total supply in an incremental way over the first 4 year period.
This 10% reward of investors is called a “Founders’ Reward” which basically means that whatever amount of Zcash is mined for the first 4 years, 10% of Zcash will be incrementally distributed among these investors.
This comes down to 2.1 million being distributed to investors in the first 4 years, which can represent a kind of a tax on mining.
After 4 years, the total mining reward goes to miners like in a typical proof-of-work system.
Zcash Market Cap
According to CoinMarketCap, the total circulating supply of Zcash is 2,294,531 ZEC, and the current price of each unit is $288. This makes its market cap approximately $662 million (at the time of this writing).
How To Buy Zcash Cryptocurrency
Zcash is an altcoin and buying altcoins directly in fiat currency is very rare. That’s why I have made this list of buying/exchanging options for Zcash which includes some easy buying options such as Changelly & ShapeShift along with advanced options such as buying from exchanges in various fiat/crypto pairs.
Buy Zcash from Changelly
Buying Zcash directly in fiat currency is difficult. But you can exchange your other coins, such as BTC, LTC, or ETH in exchange of Zcash on Changelly.
Using Changelly is very simple.
You will require the following things to buy Zcash:
- Your Zcash address where you would like to get your Zcash coins.
- Some bitcoins/altcoins to exchange for Zcash.
Note: Though this guide shows how to buy Ripple in exchange of BTC, the process is exactly the same to buy Zcash.
Buy Zcash from ShapeShift
You can also buy your Zcash by exchanging any supported cryptocurrency via ShapeShift.
ShapeShift currently supports more than 30 cryptocurrencies
I prefer using Changelly for better exchange rates and a better transaction history feature to track my funds, but ShapeShift will get the job done, too.
If you need to know the step-by-step process of exchanging other cryptocurrencies for Zcash, see our guide on ShapeShift. Though this guide is for exchanging ETH for BTC, the process is the same to buy Zcash.
Buy Zcash from Exchanges
Some of the popular Zcash exchanges are:
- Poloniex-Supported pairs are ZEC/BTC, ZEC/ETH, ZEC/USTD, ZEC/XMR
- Bitfinex-Supported pairs are ZEC/BTC, ZEC/USD
- Kraken-Supported pairs are ZEC/BTC, ZEC/USD, ZEC/EUR
- Bittrex-Supported pairs are ZEC/BTC, ZEC/ETH, ZEC/USTD
- HitBTC-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
Future of Zcash
Here are a few things to know about Zcash…
- When Zcash was launched, it was valued above $3000, but in a few weeks in January 2017, it came crashing down to $50, and is trading now under $300. But one cannot say that it’s not a good store of value because of these price drops as we all know that Bitcoin also until now have gone several times from this kind of roller coaster rides.
- You need minimum 8 GB of RAM along with several minutes to sign and send an anonymous transaction. This doesn’t really offer much value to day-to-day users. Because of this, Zcash needs to keep this anonymous feature optional. Expect a price spike when the Zcash’s dev team is able to solve this issue of user-friendly anonymous transactions.
- Zcash’s core technology, the zk-SNARK protocol, was invented in 2014 and implemented in 2016 with Zcash. It is relatively new and has yet to undergo the test of time which other privacy cryptos like Monero have undergone. But still, the later one i.e Zcash is believed to be better in tech.
- Zcash’s distribution mechanism looks like a state taxing its citizens as they are also taxing mining of Zcash for 4 years. Moreover, there is no transparency on what percentage of rewards each invested entity is receiving which raises unanswered questions.
- Zcash’s governance mechanism also raises several questions, because despite being open-source, they have a company that looks after pretty much everything. Their trusted setup of individuals takes care of Zcash security, backdoor allegations, and insane inflation rates. That just doesn’t make much sense for the decentralized cryptocurrency.
Certainly, if some of the above-listed issues are taken care and fixed then Zcash will have even more fruitful future because it is already using Bitcoin’s core protocol which has undergone the test of the time and also has superior privacy features on built on top of it.
On the other hand for a minute if we ignore some of these allegations of a backdoor and trusted setup then certainly Zcash is a good thing to invest in because since march onwards this year it has given an ROI of more than 1400% which is incredible. But if you are investing then be ready for a roller coaster ride because historical charts suggest the same as shown below.
Also, investors who were able to time the market and news have been able to make good profits out of this investment when the price dropped had dropped to its all-time low of $26. And some were even able to reap profits when Zcash after lingering around for 200$ spiked almost 100% in the last few weeks.
Now I’m curious to hear from you: What do you think about Zcash? What’s your take on it? Are you invested in Zcash? Share your views/thoughts in the comments section below!
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Official Zcash Resources:
Below are some links that will keep you updated about Zcash:
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