Zcash: everything you need to know about ZEC

What is Zcash?

Zcash is a privacy-focused cryptocurrency launched in 2016. The goal of Zcash is to enhance transaction privacy and anonymity, giving users more control over their personal data. The protocol is based on a distributed ledger, similar to Bitcoin, but with additional privacy features, such as the use of zero-knowledge proofs to ensure transaction privacy.

Zcash has its own cryptocurrency called ZEC. It is used to verify and reward transactions on the network, as well as to secure the network through mining.

How does Zcash work?

Zcash is a privacy-focused cryptocurrency launched in 2016. The protocol is based on the Bitcoin protocol but adds privacy enhancements through advanced cryptographic techniques. Unlike Bitcoin, where transactions are public and transparent, Zcash offers the option for private transactions. This allows users to shield transaction details, such as the sent amount and the involved addresses, from the outside world. Zcash was primarily developed to protect user privacy while maintaining the security and reliability of the blockchain.

The ZEC token

The ZEC token has a decentralized token economy based on the blockchain. Managed by the Zcash Foundation, it provides users with privacy and anonymity. ZEC is used for transactions and as a reward for miners. Zcash employs two types of tokens: transparent tokens (similar to Bitcoin) and shielded tokens with enhanced privacy through zero-knowledge proofs.

The total supply of ZEC tokens is limited to 21 million, similar to Bitcoin. ZEC tokens are mined steadily and predictably, ensuring token scarcity and value preservation. Additionally, 20% of the rewards for miners adding new blocks to the blockchain are used to finance the development and improvement of the Zcash ecosystem. This ensures healthy network and community growth.

The technology behind ZEC

The technology behind ZEC focuses on providing privacy and confidentiality in transactions. Zcash uses the zk-SNARK protocol to verify transactions without revealing details. This allows users to maintain privacy and anonymity during their transactions.

Zcash uses two types of addresses: transparent addresses and shielded addresses.

• Transparent addresses operate similarly to Bitcoin addresses and are visible on the blockchain, including transaction content and value.
• Shielded addresses are completely confidential and are used for anonymous transactions. These addresses are protected by the zk-SNARK protocol and are not displayed on the blockchain.

The Zcash protocol features a "Selective Disclosure" function, allowing users to choose which information they want to reveal when conducting a transaction. This option provides Zcash users with added flexibility and privacy.

Zcash utilizes a consensus algorithm called Equihash, designed to decentralize Zcash mining and prevent domination by large mining pools. This algorithm uses the Proof of Work mechanism, along with a specific feature that makes Zcash mining more challenging for ASIC miners (miners with specialized mining equipment) and favorable for CPU and GPU miners (miners with standard equipment).

The Zcash ecosystem

The Zcash ecosystem focuses on improving transaction privacy and, therefore, has several unique features. Zcash utilizes a technology called zero-knowledge proofs (ZKP), which verifies transactions without revealing information about the parties involved. This is achieved through shielded transactions, where sender, receiver, and transferred amount information is kept private.

The Zcash ecosystem consists of various components:

• Zcash Protocol: The foundational layer of the Zcash network, allowing users to execute and receive transactions using the ZEC token.
• Zcash Software: Multiple software implementations of the Zcash protocol enable users to conduct transactions and explore the blockchain.
• Zcash Foundation: A non-profit organization that promotes Zcash adoption and supports development and research within the ecosystem.
• Zcash Investment Company (ZIC): A company that invests in projects contributing to the development of the Zcash ecosystem.
• Zcash Improvement Proposals (ZIPs): Proposals for changes and enhancements to the Zcash protocol and associated software implementations. ZIPs are submitted and discussed by the community and can be accepted and implemented upon approval.

Benefits of Zcash

What are the benefits of Zcash? These characteristics attract investors to the platform:

• Strong focus on privacy and anonymity.
• Limited coin supply, ensuring scarcity.
• Every Zcash coin is fungible and exchangeable for another.
• Options for disclosing transactions.
• Robust security system.

Drawbacks of Zcash

What drawbacks of Zcash should investors be aware of?

• High technical complexity.
• Relatively high transaction fees.
• Primarily geared toward Linux users.

Who is the founder of Zcash?

The founder of Zcash is Zooko Wilcox, an American computer programmer and cryptographer. He began his career as a programmer in the 1990s and has been involved in various projects related to cryptography, cybersecurity, and distributed systems. In 2016, he founded Zcash, a cryptocurrency focused on privacy and security.

Price forecasts

In 2026 experts expect a minimal price of €219.77 and a minimal price of €729.08 in 2031.