Many countries around the world are increasingly adopting cryptocurrency due to its speed and privacy feature that keeps transactions safe and secured.
However, it is not all cryptocurrencies that guarantee privacy to users due to their design technique. For instance, the bitcoin uses a blockchain technology that serves as an open ledger, Whenever users transact, the details are stored in a block and can be tracked using the information stored by miners in the blockchain. Some cryptocurrencies are against the bitcoin’s design which exposes details of the transaction to the public, and they have made efforts to ensure that people can conveniently send and receive funds anonymously; this is what Zcash offers.
Zcash (ZEC) is a digital token just like bitcoin. It is a decentralized, peer-to-peer cryptocurrency that provides privacy and selective transparency for transactions.
With the Zcash privacy, users can utilize the optional privacy feature to determine whether to allow the details of a transaction like a sender, receiver and, amount of the transaction to be published to the public or not.
Origin of Zcash
Zcash started as a fork of bitcoin. When it was launched, it was called the Zerocoin protocol, which was later changed to Zerocash. On 28 October 2016, it was renamed to Zcash by its founder Zooko Wilcox O’hearn.
Wilcox was impressed with what bitcoin could do, but he was not satisfied with the way details of the transaction are made public. This made him create a fork out of the original Bitcoin code and made some improvements that gave users of Zcash the opportunity to conceal details of a transaction using the optional privacy feature.
When Zcash was developed, 21 million tokens were created just like Bitcoin, and they allocated 20% of the entire coins as ‘founders reward.’ This was shared amongst developers, investors, and a non-profit foundation.
How does Zcash work?
Zcash is a blockchain that allows users to transact swiftly, and privately. It gives users full control over who gets to see the transaction details by using the optional privacy feature. If a user gets to use this feature, the public would only be aware that a transaction was made, but the details of the transaction like the sender, receiver and amount of the transaction will not be visible for the public to see.
In Zcash, users have two alternatives on how to make a transaction; they are shielded transaction or transparent transaction.
In the shielded transaction option, If user “A” wants to send 5 Zec to user “B,” he will have to send the money to user “B” shielded address also known as “Z-addr.” With this option, the details of the transaction are kept private.
In the transparent transaction option, User “A” can send the token to user “B” transparent address also known as “t-addr.” With this option, details of the transaction will be made public.
Zcash can give a high level of privacy in transactions due to the usage of ZK-snarks and Zero-knowledge proof.
This was first conceived by MIT researchers which include: Shafi Goldwasser, Silvio Micali and Charles Rackoff in 1985, in their paper “the knowledge complexity of an interactive proof system.”
The zero-knowledge proof is a way of authentication where passwords are not exchanged.
Let’s assume user “A” (the prover) can prove to another party let’s say user “B” (the verifier) that he is aware of a particular secret, but he will have to do that without divulging the secret apart from stating that he knows that secret.
This is a zero-knowledge proof that is succinct or short and easy to verify. This is the proof that allows a transaction to occur on the Zcash network without divulging the details of the transaction.
To understand how the zk-snarks technology works, one has to know how a Smart Contract works. A smart contract is an escrow of funds that gets activated once an agreed function has been performed. For instance, if user “A” puts 500 ZEC in a smart contract that he made with user “B” to forecast the next day’s weather in a particular city. If user “B” predicts correctly, he gets the ZEC, but if it doesn’t, he won’t get it. This can be complicated especially when the task to be done is confidential.
This is exactly what Zk-snarks does; it will prove that user “B” did all that was requested from user “A” without divulging the details of the transaction to the public.
How to get Zcash
You can either mine or purchase Zcash. While mining isn’t for everyone, you can effortlessly obtain the token by buying it.
You can buy zcash with fiat money from different crypto exchanges such as Kraken.
Zcash is a digital currency that was forked from bitcoin to overcome the flaws bitcoin has concerning privacy, speed using zk-snarks for transaction confirmation.