The number of cryptocurrencies has skyrocketed during the past decade. While some of them have introduced very unique features and have managed to set their footholds deep down in capital market and build a repute in their corresponding niche, only a handful of currencies have provided the crypto-world with a high level of privacy and flexibility. After the initial release of Bitcoin in 2009, many early adopters were interested because of the privacy that the Bitcoin network offered. Turns out, that Bitcoin blockchain was not very efficient in terms of privacy as parties can examine the blockchain to get a sense of what is going on.
In the years that followed, a tremendous amount of research and a ridiculous amount of investment were put into the field of blockchains and cryptocurrencies. Many developers and startups came out with privacy-oriented cryptocurrencies, most famous of which are Dash and Monero. Both of these technologies use innovative methodologies of their own to help users to remain anonymous. For example, Dash makes use of the “CoinJoin” technique where several users put funds into a single transaction to better obscure their privacy. Likewise, Monero leverages upon “ring signatures” to reduce the chance of detection.
Zcash is another privacy-focused crypto-coin, and it seemingly gives its users relatively the greatest level of privacy. It allows its users to remain completely anonymous. This is achieved through the implementation of zk-SNARKS, a zero-knowledge proof methodology. The parties can carry out transactions without revealing any information or their identities. Also, Zcash’s blockchain only reveals that a certain transaction was carried out, without giving out any information about who was involved or even what amount it was .
The history of Zcash goes back to 2013, when Zerocoin Electric Coin Company created a protocol by the name of Zerocoin. The company’s CEO, Zooko Wilcox later involved his team in the development of a blockchain technology of their own, which was revealed as Zcash. Initially, Zerocoin project was aimed towards the investigation and solution to the the security limitations of the Bitcoin network. Users could convert their Bitcoins into Zerocoins in order to have better anonymity and hide the source of the transaction. The protocol allowed users to have the freedom of splitting up or combining their zerocoins, or even change them back to Bitcoin.
Along with privacy, Zcash brings a greater amount of fungibility to the crypto-world. It means that the network is not biased towards any transaction, and money of one user is as good as another’s. It has been seen that when history is associated with a particular user or crypto-tokens for that matter, those crypto-tokens might not get accepted for every kind of transaction. For example, a vendor might be reluctant to accept payment that has a history with some shady person on the network. As Zcash does not reveal any transaction history or information as to where the money is coming from, every transaction is as good as the other.
While it is true that Zcash is relatively newer than the likes of Bitcoin, its market functions in almost the similar way. Currently, it is being offered on exchanges like Poloniex and Kraken. Zcash is also a mineable cryptocurrency based on the Proof-of-Work methodology. In the present day cryptocurrency markets, it is undoubtedly one of the most sought after technologies. However, the main limitation the blockchain will face is that its demand will only be linked with the user want for more privacy.