What Is ZCash (ZEC)?
ZCash emerged in 2016 when a group of scientists decided they wanted to create a cryptocurrency similar to Bitcoin but with some additional features. They developed a fork of the Bitcoin blockchain, with enhanced user security and anonymity. The scientists first invented Zerocoin, which became Zerocash not too long after its initial release. Eventually, the cryptocurrency was renamed ZCash.
- ZCash is a Bitcoin fork with a different hashing algorithm and security protocols.
- ZCash started as Zerocash; it was later improved upon by the Electric Coin Company and rebranded ZCash.
- ZCash verifies ownership of coins and transactions more anonymously than Bitcoin, thus providing more security for users.
- Zcoin can be mined on devices and computers, but the currency is best mined on dedicated systems called application-specific integrated circuits.
Understanding ZCash (ZEC)
ZCash is forked from the original Bitcoin codebase. In 2014, Eli Ben-Sasson, Alessandro Chiesa, Christina Garman, Matthew Green, Ian Miers, Eran Tromer, and Madars Virza believed there were security flaws in the way transactions were tracked through Bitcoin's blockchain. In their whitepaper outlining their ideas, they called their cryptocurrency Zerocash.
The scientists created Zerocoin (Electric Coin Company) in 2015. In 2016, the name changed to Zcash, by the Electric Coin Company.
ZCash uses the zk-SNARK security protocol to ensure the parties involved in a transaction are verified without revealing any information to each other or the network.
ZCash is an altcoin, a category of cryptocurrency that shares many of the characteristics of Bitcoin. Many altcoins are different in their purpose and intended uses.
Zk-Snark allows for fully shielded transactions in which the sender, recipient, and amount are encrypted. This feature is a large deviation from other cryptocurrencies, where transaction transparency is an underlying concept aside from securing user information.
How Is ZCash Different from Bitcoin?
The Bitcoin community prides itself on transparent transactions while maintaining anonymity. However, anyone interested or who has a stake in a transaction could trace the parties within it.
ZCash doesn’t eliminate transaction information. Instead, it encrypts it so that it cannot be tracked. The ZCash blockchain is still encrypted, but the security protocol zk-SNARK adds additional user security and anonymity.
Bitcoin uses the hashing algorithm SHA-256. ZCash uses Equihash, which is incompatible with hardware and software designed for Bitcoin mining. It also has larger blocks and increased hashing times, which increases the network's hash rate. A cryptocurrency’s hash rate is the processing power of the network of miners—it's a measure of how fast the transactions can be verified and validated to open a new block.
Joining a mining pool is one of the best ways to benefit from ZCash mining. Efficiency and opportunities to earn are increased when resources are pooled together.
Hashing is the process used to convert data into a string of alphanumeric characters. The string of numbers is unique because it is created from the data in the block. Once hashed, it cannot be replicated. The hashing algorithm is the mathematical method used to create the alphanumeric string, also called the hash.
Goals of ZCash
ZCash was designed to be efficient, safe, and anonymous. The developers behind ZCash also promote complying with regulatory requirements. Additionally, you can choose full transparency when you use ZCash, in which case its transparency is similar to that of Bitcoin when transfers are conducted.
How to Mine ZCash
New coins are produced by mining. You can use an application-specific integrated circuit (ASIC) miner or your computer if it has a graphics card capable of mining. Operating systems supported by ZCash are Docker, Debian/Ubuntu, Mac, and other Linux flavors. However, ZCash recommends using an ASIC miner and mining pool because the network difficulty has gotten high enough that PC mining is not worth the time and costs.
ZCash uses a proof-of-work mining algorithm, which requires miners to compete against each other to produce a new block by racing to solve the hash. The first miner to find the solution opens a new block and receives the block reward.
How Many ZCash are Left?
ZCash has a maximum supply of 21 million coins, with 14.6 million in circulation. Once there are 21 million ZCash in circulation, no more can be mined, and you’ll only be able to acquire them by purchasing them on an exchange or from an individual.
Is ZCash Safe?
ZCash is safe in the sense that it hides and protects your information.
Does ZCash Use Proof of Work?
Yes, it uses Equihash, a proof-of-work mining algorithm based on the Generalized Birthday Problem concept.
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