Blockchains 101: ZCASH

3 min readDec 21, 2020

Privacy as an option

Introduction

ZCASH (Ticker: ZEC) is a decentralized, peer-to-peer (P2P) digital currency and payment network powered by privacy- and security-enhanced features.

Privacy on ZCASH is not by default but can be activated as an option.

The Zcash network launched on October 28, 2016 by a privately held company led by Zooko Wilcox and known today as the Electric Coin Company (ECC).

Description

ZCASH (Ticker: ZEC) is a reinitialized fork of Bitcoin with implementation of the zk-SNARK protocol (zero-knowledge cryptography), allowing to validate transactions by the process of mining (Proof of Work), without revealing the addresses of the sender and receiver, neither the payment amount.

It follows the Zerocash whitepaper, published in May 2014and describing privacy and anonymity improvements for Bitcoin.

ZCASH story started in 2013 with Matthew Green and some of his graduate students from Johns Hopkins University, until the opening of The Zcash Company by Zooko Wilcox who raised over $3 million from Silicon Valley VCs to complete the development of Zcash.

In June 2017 a non-profit called the Zcash Foundation formed with the mission, together with the Electric Coin Company of building a public internet payment and privacy infrastructure and support the Zcash protocol, ecosystem and blockchain.

Privacy

Transactions can be, as for Bitcoin, “transparent” (pseudonymous) or of zero-knowledge proof type by activating zk-SNARKs. The transactions are then “shielded”.

On May 19, 2020, a paper titled “Alt-Coin Traceability” looking at the privacy of both Zcash and Monero concluded that because ZEC privacy features are not a by-default parameter, the network was remaining traceable:

Results show that, introducing strict security and anonymity requirements into the cryptocurrency ecosystem makes the coin effectively untraceable, as shown by Monero. On the other hand, Zcash still hesitates to introduce changes that alter user behavior. Despite its strong cryptographic features, transactions are overall more traceable.

ZCASH CPU Mining Software: Equihash for NiceHash

Mining ZEC

As for Bitcoin, blocks and transactions on ZCASH are validated through a Proof of Work (mining) consensus algorithm and with a similar schedule. ZEC is ASICS-resistant via it Equihash algorithm (Can be mined with CPU/GPUs).

ZEC is not a regular fork of Bitcoin as it has reimplemented its protocol from Genesis (restart from zero) with privacy implementation and a slightly different supply schedule, starting at 12.5 ZEC / block (instead of 50 for BTC) and with a halving every 4 years (same than BTC).

ZEC had no pre-mine but 10% (2.1M/21M) of the total supply is distributed to Founders and core team during the first 4 years of mining the coin.