When you look at cryptocurrencies like Bitcoin and Ethereum, they offer secure blockchains where every action on the network is visible for all to see. While this transparency is one of the core pillars of blockchain technology, it comes at the cost of privacy.
Every transaction is publicly accessible, revealing users’ wallet balances and the movement of their funds.
For users and institutions seeking financial confidentiality, privacy-focused cryptocurrencies like Zcash (ZEC) aim to fill that gap by offering the ability to shield transaction details.
What is ZCash?
Zcash (ZEC) is a decentralized, open-source cryptocurrency that emphasizes privacy and selective transparency. It offers users the option to conduct shielded transactions (which hide sender, receiver, and amount) using zero-knowledge proofs (specifically, zk-SNARKs), while also allowing transactions to be transparent, similar to Bitcoin.
By allowing users to choose between openness and private modes, Zcash strives to strike a balance between openness and privacy.
The History of ZCash
The cryptocurrency officially launched on October 28, 2016, developed by the Electric Coin Company, with a mission to combine Bitcoin’s decentralized security model with cutting-edge zero-knowledge cryptography.
Zcash traces its roots to early academic research on blockchain privacy, beginning with the Zerocoin and Zerocash protocols that are cryptographic extensions to Bitcoin designed to add privacy to otherwise transparent transactions. Conceived by scientists and researchers from MIT, Johns Hopkins University, and other respected institutions, these innovations laid the foundation for Zcash’s creation.
Since launch, Zcash has undergone several major upgrades, including Sapling (2018), which streamlined shielded transactions and improved performance, and Orchard (2022), which removed the need for a trusted setup and enhanced scalability. Together, these advancements have made Zcash a popular privacy-focused blockchain, known for its scientific rigor, ongoing innovation, and balance between privacy and openness.
ZEC: The Native Currency
ZEC is the native cryptocurrency of the Zcash protocol, and it serves multiple functions:
- Transaction fees (gas): ZEC pays for network transaction fees in both open and shielded transactions.
- Mining reward/issuance: Zcash is a proof-of-work chain. New ZEC are minted as block rewards. As of the current protocol, block rewards are split: typically 80% to miners, and 20% to development and funding purposes.
- Supply cap: Like Bitcoin, Zcash is capped at a total supply of 21 million ZEC.
- Selective transparency/disclosure: Even shielded transactions include features for selective disclosure (i.e. a user may reveal proof to a third party, e.g. for audits or compliance).
Buy & Sell ZCash (ZEC) at iTrustCapital
If you’re interested in buying and selling ZCash (ZEC), you can do so in a secure Premium Custody Account or tax-advantaged Crypto IRA* at iTrustCapital.
Click here to open an account today!
*Some taxes may apply.
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