Zcash is a decentralized open-source cryptocurrency that aims to offer privacy along with selective transparency of the transactions. All the payments and transactions on the Zcash protocol are published on the public blockchain but the sender, recipient and the transaction remain private which thus offers a level of security and privacy.
What is Zcash
The Zcash protocol was built on an open-source platform that is based on the Bitcoin Core’s codebase and was developed post a peer-reviewed cryptographic research based on the results that were drawn. In addition to the extra layer of privacy, Zcash also uses advanced cryptographic techniques without revealing additional information that can be conserved.
The principle behind Zcash is to keep the important information private, this is done by keeping the information about the Sender, recipient and the amount of transaction private despite the records being placed on the public ledger, the Zcash cryptocurrency is built on the Bitcoin Core codebase and it thus implements a public ledger for selective transparency giving only information that is essential for the functioning.
Technology behind Zcash
The technology that Zcash works on is very unique and places privacy and security first, the Zcash cryptocurrency encrypts the contests of the protected transactions and as the information is encrypted, the protocol implements a cryptographic algorithm to verify their validity. The algorithm is rather uncommon and it uses a zero-knowledge proof construction method called zk-SNARK that has been developed by the team in-house based on the recent breakthroughs in the cryptographic technologies.
This algorithm helps Zcash to maintain a secure public ledger of the balances without disclosing the entities that were involved in the transaction or the amount that was exchanged. Unlike Bitcoin and most other cryptocurrencies that make all the transactions available on a public ledger, Zcash doesn’t make this information publicly available, instead, the transaction metadata is encrypted and the zk-SNARK is used to prove that the transactions are validated.
Zcash also allows for the transactions to be public and it can work similar to Bitcoin, the protocol supports both, shielded and transparent addresses thereby allowing the users to select between using Zcash privately or publicly. The ambiguity arises when there’s a difference in the type of sender and receiver, if the sender is from a shielded address and the receiver is a transparent address then the received balance is revealed, on the contrary, if the payments are from a transparent address to a shielded address then the receiving balance is protected.
What is zk-SNARKs?
Zk-SNARKs is a novel zero-knowledge cryptography and Zcash is the first major application of this cryptography, the strong privacy guarantee offered by Zcash is based on the shielded transactions being offered by the cryptography that helps Zcash transactions in being fully encrypted on a blockchain. Despite the encrypted nature, the transactions can be validated by using the consensus rules via the zk-SNARKs proofs.
The term zk-SNARKs stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge” and it helps in proof construction for consensus which can prove possession of something without revealing any information that the validity of statement itself. In the Zero Knowledge “Proof of knowledge” method, the prover confirms with the verifier that the transaction exists and that the transaction is known and validated without revealing any information of the number.
Why should you invest in Zcash?
Not much can be said with certainty about the cryptocurrency market as even the smallest of signals or changes in the international market can make a huge impact, one such example was the listing of Zcash in Gemini that leads to a bump in the price by as much as 55 percent, this is very much expected considering the volume of trades on the biggest crypto exchange of the US.
However, the other question with the extremely secure Zcash comes in about the potential crackdown by authorities as we recently saw in the Japanese cryptocurrency market. This has resulted in secure coins such as Zcash having a smaller market cap as people are still unsure of the regulating authorities will ever be comfortable with this type of technology in the open.
Prior to the recent listing on Gemini, Zcash had experienced an initial dip of 20 percent in value before it rebounded and continued to increase in value. Zcash has now stabilized but considering the recent rise in the demand in the US market, the price of Zcash is expected to rise even further in a short term.
Things to know about Zcash
- Completely secure and offers extreme privacy to protect vital information.
- Uses zk-SNARKs “Proof of Knowledge” for verification.
- Hides the sender, receiver and transaction amount on the public ledger.
- Also has a public mode that doesn’t shield the information.
- Concerns over regulators eyeing the secure currencies and lack of regulatory support.
- Based on Bitcoin Core codebase.