Zcash Cryptocurrency | How To Buy Zcash

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ZCash was launched in 2015 by a group of scientists who wanted to create a cryptocurrency like Bitcoin, but better. This is a hard fork of the Bitcoin blockchain, and offers anonymity with more security. It was initially called zerocoin, then zerocash and ultimately the name was finalised to be ZCash in 2016.

Zcash has a slightly different hashing algorithm and security protocols as compared to Bitcoin. It also verifies transactions more anonymously than Bitcoin, thereby providing more security for users. It can be mined on devices and computers. However, the best mining can be practised on dedicated systems called application-specific integrated circuits.

ZCash History and distribution

Zcash was launched on October 28, 2016 by Electric Coin Co., a private company founded by Zooko Wilcox. Zcash depends on a mathematical proof called a zk-SNARK to quickly and efficiently verify a transaction and add it to the blockchain anonymously.

After the Zcash launch, the engineering team released some upgrades termed as the “Sprout series.” The team also put forward plans for two core protocol upgrades known as Overwinter and Sapling.

In early 2019, the Company rebranded to the Electric Coin Co. to differentiate from Zcash the protocol and the Zcash Foundation. The community then began a several-month-long governance discussion regarding the continuation of the Founder’s Reward and the trademark.

Evolution in ZCash over the years

Since its fork in 2016, Zcash has continued to expand and iterate on its core features. There have also been some big improvements over the last couple of years. One of them is Halo, a “trustless recursive” version of ZKP. Then there is also the ZCash wallet, an open-source, shielded-first, fully functional wallet released in 2020. Followed by the Heartwood Network Upgrade activation, also in 2020, which added Shielded Coinbase and FlyClient support.

Not to mention an increase in institutional support and the first-ever Zcash halving.

Halo and Halo 2

Launched by ZCash in 2019, Halo is a new zk-SNARK that addresses the two major problems of scalability and trusted setups. Zcash was launched with a trusted setup.It creates a secret number, and a derivative of that number is used by the Zcash protocol. This number is then created in multiple parts by multiple actors. They all then need to destroy the “cryptographic toxic waste” without revealing what it was.

A trusted setup would have had to occur at each hard fork. However, if the waste is not destroyed or if the secret number is figured out it would lead to an integral flaw in the protocol. This flaw would even allow individual(s) that discovered it to create Zcash tokens arbitrarily without anyone’s knowledge.

Halo 2, announced in 2020, iterated on Halo by using PLONK, a novel z-SNARK, rather than “Sonic” to verify transactions. PLONK is more efficient than Sonic, and would better enable further scaling of Zcash as well as move it closer to being able to eliminate a trusted setup.

At its heart, PLONK is an instance of a proof that can verify itself, thereby allowing any amount of computational effort and data to produce a short proof that can be checked quickly.

Zcash Wallet

In June 202 the ECC released an open-source, shielded-first, fully functional ZCash wallet with a software development kit for demonstration and testing. One of the aims was to make sure that at least 40% of the world could read and understand the wallet. The app has been translated into five languages: Simplified Chinese, Russian, Spanish, Italian and Korean, other than English.

Heartwood Network Upgrade

In July 2020 ECC launched the Heartwood Network Upgrade activation, which added Shielded Coinbase and FlyClient support. Shielded Coinbase allowed Zcash to completely shield ZEC from its creation, thereby increasing privacy. It also gave miners the option to get mining rewards issued immediately into a z-address.

FlyClient provides a more efficient method for verifying the blocks on a blockchain. It could increase the utility and market for Zcash.

Zcash Halving

Zcash experienced its first halving at the tail end of 2020, which led to a cut in miners’ block rewards from 6.25 ZEC to 3.125 ZEC. It also launched the network’s fifth upgrade, Canopy, which removed the controversial “Founders Fund,” which seemed to give too many ZEC tokens back to the founders.

Halo Arc Update

ECC has announced the next suite of upgrades to Zcash – the Halo Arc.

Halo Arc includes updates to Zcashd (Zcash’s consensus node), an ECC wallet prototype and the ECC wallet SDKs. In the wallet, transactions will be shielded by default, which is an option for Zcash at the moment.

After a number of delays, Halo Arc was set to launch in April 2022, but it has been delayed as of right now. The launch was in coordination with the activation of Zcash’s Network Upgrade 5 (NU5). NU5 will be the first mainnet activation of the Halo proving system, furthering the development of zero-knowledge-proof cryptography.

This protocol upgrade will also introduce unified addresses, a feature that creates a single Zcash address compatible across all Zcash value pools. At present, protocol upgrades at times required new address formats.

About ZCash (ZEC)

ZCash uses the zk-SNARK security protocol to verify transactions without revealing any information about the involved parties whatsoever. This feature is very different from most cryptocurrencies because almost all of them promote transparency. Also, ZCash is an altcoin, which means that it shares many characteristics of Bitcoin.

Zcash Features

Below are the primary features of Zcash Cryptocurrency:

1. Addresses: Zcash has two types of addresses: private (z-addresses) and transparent (t-addresses). Z-addresses start with the letter “z,” and t-addresses start with “t.” The two are interoperable and funds can be transferred between them. Most wallets and exchanges exclusively support t-addresses, however support for shielded addresses is available for mobile and desktop wallets.

2. Transactions: Transactions between two t-addresses work just like Bitcoin, with the sender, receiver and transaction value publicly visible. Transactions involving shielded addresses include shielded (z-to-z), shielding (t-to-z), and deshielding (z-to-t), with the z-address getting privacy protections. The shielded (z-to-z) is the most secure transaction, which encrypts the sender and receiver addresses and transaction amount. However, all transactions appear on the public blockchain, so a transaction is known to have occurred and what fees were paid.

3. Viewing keys: The owner of a z-address can share its transaction details with trusted third parties via a view key. It refers to a key with read access but no spending authority. This allows compliance with payment for auditing, tax regulations, or anti-money laundering rules.

ZCash also offers some Supporting features:

  • A fixed total supply of 21 million units, exactly like Bitcoin
  • Default but configurable low-fee transactions of .0001 ZEC.
  • Encryption of memos to securely pass along messages or other useful data.
  • Transaction expiration to reduce mempool bloat; default expiry is 40 blocks (50 min).

Zcash Protocol

1. Units and divisibility: The unit of account of the Zcash system is a ZEC. The ticker symbol used to represent Zcash is also “ZEC”. A zatoshi is the smallest amount within Zcash, representing 0.00000001 ZEC, one hundred millionth of a ZEC.

2. Funding Structure: Zcash pays out a portion of each block reward to fund protocol development and (for the first year) to pay back investors. During the first four years of Zcash, 10% of the block reward was transferred to the Founders Reward fund and distributed to the Electric Coin Co., Zcash Foundation and initial investors. After network upgrade 4, 8% of the block reward will be transferred to the Dev Fund and managed by a Major Grants Review Committee.

3. Mining: Originally Zcash could be mined at home, using CPU or GPU machines. As mining hardware evolved, ASIC machines became the preferred mining machine for professional cryptocurrency miners and mining pools.

4. Scalability: Scalability is a work in progress. The current proposal calls for the use of sharding. It is a technique that partitions a database into sections or “shards” to improve the throughput limit, in order to scale to high transaction volumes.

Aim of ZCash

ZCash was designed to be efficient, safe, and anonymous. The developers behind ZCash also promote complying with regulatory requirements. Additionally, you can choose full transparency when you use ZCash, in which case its transparency is similar to that of Bitcoin when transfers are conducted.

ZCash vs Bitcoin

We have established so far that ZCash shares many features with Bitcoin. Bitcoin is popular for its transparency whilst maintaining anonymity. However, it is also true that bitcoin transactions can be tracked to verify the parties involved.

ZCash on the contrary, encrypts (but does not eliminate) the transaction credentials. Thus, it adds another layer of user security and anonymity. One must also note that the mining equipment (hardware and software) needed for Bitcoin mining and for ZCash mining are totally different. ZCash additionally offers higher hash rate and larger blocks, thereby has a higher hash rate.

What is hash rate?

Hash rate refers to the processing power of the network of miners. It is basically a measure of how quick a transaction can be verified and validated, to open a new block.

How is ZCash different?

ZCash was designed to be anonymous, safe, and efficient. Its developers encourage rule enforcement whilst also maintaining a rather wide array of options for the users. One can opt for a fully transparent transaction on ZCash as well. In such a case, the level of transparency matches that of Bitcoin.

Mining ZCash

Mining is the process to produce new coins of the ZCash crypto. One can use an application-specific integrated circuit (ASIC) miner or a computer with a graphics card capable of mining. However, ZCash recommends using an ASIC miner and mining pool since the network difficulty has increased so much that PC mining is not profitable enough.

Since ZCash relies on proof-of-work mining algorithm, miners have to compete against each other to produce a new block. They race to solve the hash and the first miner to find the solution opens a new block and receives the reward.

How Much ZCash is Left?

Just like Bitcoin, ZCash has a cap on the maximum no. of coins that can be in supply. Out of the total of 21 million coins, about 13.7 million are in circulation already. After 21 million coins are in circulation, no more can be mined.

Is ZCash Safe?

ZCash offers the features of safety and security by hiding the personal information of users involved in a transaction.

Does ZCash Use Proof of Work?

Yes, it employs Equihash, a proof-of-work mining algorithm based on the Generalised Birthday Problem concept.

Existing Issues

ZCash faces a few challenges at present that it must overcome.

There are always awesome issues that will come to light only after large scale use. There is hope that a larger implementation of Halo 2 in 2022 will be able to handle trusted setups and eliminate the “toxic waste” that is a byproduct of them. The future also demands better scalability for global expansion. Finally, there is also the delisting of privacy coins such as Zcash from some exchanges that could continue to be an issue. Core privacy features built into protocols like Zcash and Monero have caused concern among regulators as they can be used to conceal illicit activity.

How To Buy Zcash

Currently one cannot actually buy Zcash. However, after the launch of the privacy coin exchanges might expect a good buyout. Amateurs must stay vigilant and regularly update themselves. None of the ZCash coins often deep-mine absolutely that comparable to what happens with Ethereum. Except with Ethereum heaps of the cryptocurrency buy during a crowdfund before unleashing.

Future scope

Halo and Halo 2 present Zcash with the best chance of addressing some of its most vehement criticisms. However, privacy coins are still at risk of being delisted from exchanges and it appears to be a giant problem. But when it comes to privacy coins, Zcash sits squarely in the conversation of the top privacy coins, as previous competitors like Dash have almost abandoned the label and protections.

Conclusion

In this article we learnt about ZCash. We discussed its history and founding, and also discussed in detail how and what makes ZCash so much different from Bitcoin. We then focussed on the ways for mining ZCash and reviewed its safety.

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