Today, cryptocurrencies are very common and even familiar to common people. They provide safe and secure digital transactions. Bitcoin is the most familiar cryptocurrency. Most of the cryptocurrencies including bitcoin sacrifices the privacy of its users. Each and every activity of a user can be tracked and is visible to all. Many modern cryptocurrencies came forward with an offer of providing complete privacy to their customer. The most recent one is ZCash.
What is Zcash?
It is a decentralized peer to peer cryptocurrency. As bitcoin, Zcash has a cap limit of 21 billion coins. It provides complete privacy to its users through the use of ingenious cryptography. The first Zcash coin was developed on October 28, 2018. When developed it was called Zerocoin protocol, then changed its name to the Zerocash system and finally to Zcash. Zooko Wilcox is the founder of Zcash.
How does Zcash work?
Zcash offers two options for its users while doing a transaction.
- The first option is the normal transaction, like bitcoin or any other cryptocurrencies. In this option, the details of the transaction are visible to the public. The users use their public address for the transaction.
- The second option provides complete privacy to its users. Users can use their shielded address for making a transaction. If complete privacy is required both the users can use their shielded address for the transaction.
Zcash utilizes zk-Snarks or simply Zero-knowledge proofs for achieving privacy in transactions. Every Zcash transaction has a “spend key” and a “view key”. The spend key is used for the spending of the Zcash coins. The view key helps other users to view the details about a particular transaction. A user can share the view key of a transaction if he wants anyone to access the details of the transaction and the recipient’s address. There is also an additional memo field in a Zcash transaction. These memo fields can be used by institutions or users to share data that can only be viewed by the recipient.
Zcash Coin Distribution
Equihash is used for the mining of Zcash. Zcash has a maximum supply limit of 21 million coins which are all expected to be mined by 2032. In order to keep the supply in check, the block reward gets halved every 4 years. Zcash is not ICO funded. A group of investors funded for the initial development of the coin. A “Founder’s Reward” was promised to the investors which include 10% of the total supply for a period of 4 years.
Problems Faced by Zcash
A major problem faced by the Zcash is counterfeiting which is a drawback of zk-snark programming. In this mechanism, initially, a public/private key pair is created. Then the private key is destroyed and the public key is kept. Counterfeit coins can be created by anyone by acquiring this private key. This problem is called the “Toxic waste problem”.
Zcash is a privacy-protecting, digital currency built on the basis of strong science. The future of money is digital, decentralized and fully private. Hope Zcash overcomes its cons and becomes the future’s digital currency.