ZCash was created based on the Bitcoin Core code developed by Satoshi Nakamoto and which has been successfully used in Bitcoin for a long time. The programmers have modified the code in this way to change the anonymity protocol. The innovative ZECC system is the solution that helped create the original code for ZCash. The technology consists of the fact that the system confirms the transaction, but without information about the account holder, the number of funds, or the balance on the wallet. Public access to information is closed from unauthorized users. That is, there is no analog of a “book” in which data on blockchain chains is recorded, as it is implemented in bitcoin. The user himself chooses whether to close the data on the operation. If a transaction is performed from the owner of a closed wallet to an open wallet, then information about the amount that is transferred is recorded in the public domain. Under other conditions, the opposite is true.
Disadvantages of ZCash
There are disadvantages to cryptocurrency, although not many.
- 6 users can decide to leave the transfer details completely open;
- a lot of computation needs to be done to complete a transaction;
- there is a possibility that the system will be hacked, or the users themselves will open
- the data ZCash only supports the Linux operating system, and so far the creators do not plan to change this;
ZCash’s advantages over other cryptocurrencies
After Bitcoin, the most promising are cryptocurrencies with the highest anonymity, that is, currencies whose participants in transactions are difficult to track. And that includes ZCash. Noteworthy is not only the mechanism by which privacy is achieved but also several other advantages of this cryptocurrency.
- Anonymity
The owner of ZCash can decide whether the transaction is hidden or open, using a hidden or open address for currency transfer, respectively. And, if a hidden address is chosen, the transaction will be truly anonymous.
This is because ZCash is based on a zero-knowledge proof protocol, which assumes that confirming transactions does not require decrypting their data. On the public blockchain, only the fact of payment is reflected – its timestamp, but the addresses of the sender and recipient, as well as the amount of the transfer, are hidden.
In terms of encryption strength, this cryptocurrency surpasses others, including Bitcoin, and is second only to Dash, which uses a more convoluted method.
- Interchangeability
All ZCash units are interchangeable, that is, they are equivalent because the connection of the coin with the data on its previous use is broken.
The fungibility of ZEC makes this currency more interesting than the same bitcoins and other cryptocurrencies with a tracked history, which are only conditionally equivalent. If the BTC you honestly purchased were previously stolen, involved in some dirty business, or belonged to a compromised person, problems may arise with their further use. It will be difficult to pay with such coins or sell them, while ZCash signs do not depend on reputation.
- ASIC Creation Protection
ZCash is a decentralized currency: the Equihash algorithm used to mine ZCash blocks is demanding on the amount of RAM and makes it impossible, or at least very difficult, to create equipment for industrial mining. This means that GPU mining will remain profitable for ordinary users for a long time.
- Inflation protection
Cryptocurrencies have a finite number of coins, but some – only conditionally, leaving the opportunity for further mining. Like Monero, for example. The emission of ZCash is strictly limited to 21 million coins, which protects the currency from depreciation.
Perspectives
The currency was launched in October 2016, and at the beginning of 2018 a little more than 3 million ZEC were mined, so ZCash mining has a lot of potentials.
Although ZCash is prone to fluctuations in value and, like most cryptocurrencies, lost value in January 2018, overall, since its launch, the currency has shown growth. In December 2017, the value of this cryptocurrency doubled.
