What Is Zcash cryptocurrency? ZCash (ZEC) is one of the most popular privacy coins in the cryptocurrency world. Along with Monero and Dash, Zcash is the household name when it comes to privacy. The idea of privacy coin in the crypto world is attractive because many people want to have more privacy when it comes to money. Typically, cryptocurrencies use public blockchain and it exposes every transaction. While standard public blockchain solves malicious intents but at the same time, it causes another issue which is privacy. This is where ZCash shows its appeal.
Zcash itself was a fork of Bitcoin on October 28, 2016. Founded by Zooko Wilcox, the concept is to use open blockchain system but maintain users’ transaction privacy whenever the users demand it. ZCash blockchain itself does not force its privacy feature. There are two types of wallet addresses that you can use with ZCash, transparent addresses that work similarly to Bitcoin (start with “t”) and shielded addresses with extra privacy feature (start with “z”).
As for the shielded addresses that start with “z”, ZCash has strong level of privacy because of its popular feature called zk-SNARKS. zk-SNARKS is even used by JPMorgan’s Quorum blockchain. zk-SNARKS stands for zero-knowledge Succinct Non Interactive Arguments Of Knowledge. To understand zk-SNARKS, first we must understand the concept of zero-knowledge proof.
What Is Zero-Knowledge Proof
Zero-knowledge proof is a well-known term in the cryptography world. It’s about how someone can prove they know something without revealing the details to the other person. I will give you an easy example so you can understand it better. There are two people called John and Jane. Jane wants to know John has access to the locked safe box inside the room. John gets inside the room while Jane stays outside. John opens the safe box and go back to Jane. Jane checks the safe box and she acknowledges John has access to the same safe box because it’s now unlocked.
Jane did not get into the room with John. Previously she did not know John had the key to the safe box. Now he knows because the safe box is unlocked and John was the only person who entered the room even though she didn’t see the key with her own eyes. This is how zero-knowledge proof works. John in above example is called the prover while Jane is called the verifier.
So, in other words, zero-knowledge proof is when the prover can prove to the verifier that he knows certain information without telling the verifier what is that information. A protocol with zero-knowledge proofs needs to have the verifier to be able to ‘check’ the information/action provided by the prover is correct. This concept is adopted by ZCash for its privacy or shielded transactions.
zk-SNARKS for Zcash’s privacy transactions
With bitcoin, all transactions’ validations are done with link between sender and receiver wallet addresses as well as input and output values on the network. With Zcash’s zk-SNARKS, sensitive information like wallet addresses and transaction values are not revealed. However, as mentioned on zero-knowledge proofs section above, shielded transaction’s sender still need to prove the input values and the output values for each transaction are the same. The sender also needs to prove they have the private spending keys of the input notes which shows the same party has the authority to send out the transaction.
You should visit the official guide from Zcash website to understand in full details how zk-SNARKS works. The amazing technology of zk-Snarks answers the question “What Is The Value Of Zcash”. Well, the value of Zcash comes from its privacy implementation. Even JPMorgan cooperate with ZCash because they are interested in zk-SNARKS technology.
ZCash has multiple wallet options but you can download the core client here if you have a Linux machine. The core client is a bit resource demanding and you might want to use more convenient options such as Exodus, Trust Wallet, or a hardware wallet like Ledger Nano S. We highly recommend you to use Ledger Nano S because it requires a hardware button in order to send transactions from your ZCash wallet. To see a full list of Zcash wallets, you can click here
What is ZCash used for? Why does the currency exist? Well, Zcash exists to solve the usual public blockchain problem which is privacy. Zcash is one of the biggest privacy coins out there. ZCash has established itself in the crypto community. zk-SNARKS has received good testimonies from JP Morgan and Vitalik Buterin himself (creator of Ethereum).
With the rising popularity of cryptocurrencies this year, we expect ZCash to gain even more popularity in the future. We have a how to buy Zcash guide if you are interested.
Switchain is an instant non custodial cryptocurrency exchange. Our user user-friendly platform makes trading crypto easy and fast. We work with different cryptocurrency trading partners to guarantee the best cryptocurrency rates to our clients.