EVERYTHING You Need To Know About ZEC
What is ZCash?
Launched in 2016, ZCash (ZEC) is a leading privacy-coin, that is, a cryptocurrency capable of fully anonymous transactions.
Similarly to Bitcoin, ZCash is a digital currency that is frequently used as a payment method or as a form of investment.
Based on the blockchain technology, ZCash is decentralized and extremely secure, not requiring a bank or any third-party in its transactions.
ZCash is a popular, innovative and powerful cryptocurrency. In this article, we’ll cover everything a beginner needs to know about ZCash!
Zcash Price Chart
Introduction to ZCash
What makes ZCash (ZEC) different from Bitcoin (BTC)
ZCash is a cryptocurrency based in Bitcoin’s code (a Bitcoin fork). The same way as Bitcoin, it uses a technology called Blockchain, introduced by a person (or group) under the name of Satoshi Nakamoto in 2009. Blockchain is a public ledger recording every transaction happened with its associated cryptocurrency.
Records in the blockchain are shared with everyone on the Bitcoin network, and anyone can participate in the validation process to decide whether transactions are legitimate or not. Blockchain made Bitcoin both secure and decentralized. Those records, which are grouped in blocks, contain information of each transactions’ sender’s and receiver’s addresses (wallets) and the amount transacted. Even though it doesn’t include any nominal information about users, spending patterns of some wallets can often, in theory, give clues about the identity of their holders. For this reason, not everyone was comfortable with Bitcoin’s blockchain full transparency.
In response, a group of developers from the Johns Hopkins University conceptualized the Zerocoin project, an algorithm which would allow independent authentication for the blockchain’s transactions while at the same time hiding its data.
Zerocoin eventually evolved into the ZEC Protocol and, instead of being added to Bitcoin’s blockchain, it was used as the foundation for a new, independent cryptocurrency, the ZCash.
Zcash Key data
ZCash shielded transactions are totally anonymous. No information, such as their sender, receiver or amount can be disclosed.
Audit - and regulation-friendly
ZCash allows for third-party audits and regulatory compliance, since users are able to share their private addresses and data.
Easy-to-use and accessible
ZCash payments have minimal transaction fees and transactions are easily done by anyone with very basic technical knowledge. It’s supported by several wallets (applications that can store, manage and make transactions using cryptocurrencies) and sold in all the major cryptocurrency exchanges.
Decentralized and secure
ZCash is a digital currency that is maintained and managed by its own community, instead of a central authority. There isn’t an “owner”. Also, there isn’t a central database storing ZCash that could be eventually vulnerable to attacks.ZCash’s technical features
There are two different types of ZCash wallets:
● Transparent wallets with “t-addresses”, starting with a “t”. They work similarly to Bitcoin wallets and are not private.
● Shielded wallets with “z-addresses” which start with a “z”. They are able to hide their transaction data using a technology known as zero-knowledge proof.
New z-addresses, which support ZCash’s “sapling” technology, allowing for more efficient shielded transactions, start with “zs”, while the legacy ones start with “zc”.
Three sample zCash addresses:
Different type of transactions
As different types of ZCash wallets transact with each other, those are the possible interactions:
Result: all transaction data is hidden
Result: amount and receiver's address will be revealed
Result: amount and sender address is revealed
Result: amount and addresses are revealed
● Z-address are always kept hidden from the blockchain. They aren’t revealed even to users who receive payments from them.
● On the other hands, ZCash’s transaction fees are always visible regardless of the type of the transaction.
● It’s possible to include a public memo in shielded transactions.
ZCash also has multisig wallets. Multisig wallets have multiple keys, requiring all of them to sign and authorize transactions from that wallet. Multisig is, currently, available for t-addresses only.
ZCash is an evolution from the Zerocoin Project, a privacy protocol developed in 2013 as an addon to Bitcoin’s blockchain, created by a team from the Johns Hopkins University.
With further support from scientists from the Massachusetts Institute of Technology (MIT), the US Defense Advanced Research Projects Agency and Israel Institute of Technology from Tel Aviv University, Zerocash turned into the ZEC Protocol
Instead of being incorporated by Bitcoin, the ZEC Protocol was used as the foundation for a new and independent cryptocurrency: ZCash, which was announced on October 28, 2016.
How ZCash Works
ZCash is based on a technology called “blockchain”. It allows for exceptionally secure digital payment system which doesn’t require a third party (like a bank or a government) to authenticate its transactions.
Transactions are made using wallets, which are software able to sign them using their users’ private keys. A person’s private keys are proof of their ownership over their coins. Signing transactions with private keys is imperative for them to be accepted in the blockchain, as it attests the sender’s ownership of the funds they’re sending.
Each private key is associated with a public key, which is more commonly known as an address. They are used to identify the recipient from a transaction.
Transactions are always recorded in the publicly available ledger called blockchain. Transactions are grouped in “blocks” which are created in a given frequency by “miners”.
Miners are users who collectively authenticate transactions to decide whether they should be added to the blockchain or not. Mining uses an algorithm called proof-of-work. Usually, miners can easily identify which transactions are honest. Ultimately, the authenticity of a transaction will be decided by a consensus between all miners.
Since proof-of-work requires miners to use powerful computers and spend a considerable amount of electricity, trying to mine a block containing illegitimate transactions is not only useless but also a waste of money, since only the block considered valid by the network’s consensus will yield a block reward. The Consensus is similar to voting, but each vote is weighted by how much computational power one is providing.
Both Bitcoin and ZCash have proof-of-work as their consensus algorithm, but zCash has an additional layer of privacy called zKSNARKs, which allows its transactions to be indirectly authenticated without revealing any information about it.
zK-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) is ZCash’s authentication mechanism, based on the zero-knowledge proofs invented by cryptographers at MIT in the 1980s.
Similarly to Bitcoin, signing a transaction with a private key will prove the ownership of the funds being transacted, but a complex mathematical procedure allows this signature to be verified without actually revealing it.
ZCash Governance and funding
The privately-owned Electronic Coin Company (previously called ZCash Company) is currently the main organization responsible for developing and supporting ZCash. Its CEO, which holds the position since ZCash was initially released, is Zooko Wilcox. A non-commercial, autonomous entity called ZCash Foundation has a minor role over ZCash’s governance. It’s expected that, gradually, most of the Company’s control over ZCash will be transferred to the Foundation.
Each time a new ZCash block is produced, 10% of ZCash’s the reward it generates is transferred to a pool called the “Founders’ Reward”.
The pool’s funding is distributed as follows:
● The ZCash’s company founders, employees, and advisors receive 5.75% of the block rewards;
● ZCash’s investors get 1.65%;
● 1.44% of ZCash’s block reward is given to the ZCash Foundation;
● 1.19% goes to the “Zcash Company strategic reserve”, a fund to support ZCash’s progress and increase the company’s value
ZCash’s maximum supply is the same as Bitcoin’s: 21 Million coins. Also similarly to Bitcoin, ZCash’s block reward (that is, how much “miners” are being paid to authenticate ZCash’s transactions) halves every four years.
ZCash originated from the Zerocoin Project, led by the scientists Matthew Green, Ian Miers, Christina Garman, and Aviel D. Rubin from the Johns Hopkins University. Together with Alessandro Chiesa, Eli Ben-Sasson, Eran Tromer, and Madars Virza, they launched ZCash based on the ZEC Protocol, an enhanced version of Zerocoin.
ZCash’s advisory board includes Gavin Andresen, founder of the Bitcoin Foundation and one of the main developers associated with Bitcoin and Vitalik Buterin, founder and CEO of Ethereum, which is currently the second most valuable cryptocurrency, behind Bitcoin.
ZCash announced a partnership with the world’s largest bank, JPMorgan, in 2017. The plan was to implement ZCL (ZCash’s zero-knowledge security layer) into Quorum, a blockchain platform developed by JPMorgan targeted at financial institutions. It allows enterprises to easily comply with regulatory requirements, especially those related to privacy.
According to an article published by Forbes:
"Quorum is designed for the institutional financial markets, and commercial confidentiality is a key requirement for companies that trade in those markets because they don't want their competitors to be able to see what they're trading, what positions they're taking, or who their counterparties are. Until now, blockchain technology's lack of privacy and confidentiality has been a major obstacle to adoption. By combining the zero-knowledge security layer (ZSL) with Quorum's private smart contracts, that obstacle is removed for many use cases, ranging from simple equity trades to complex derivatives."
Cryptocurrencies competing with ZCash
ZCash is frequently compared with other cryptocurrencies in the privacy coin category. This includes DASH (DASH), a cryptocurrency which provides additional features such as instant transactions and VERGE (XVG), a much lesser known privacy coin.
Currently, Monero (XMR) is the most popular privacy coin. The main features which differentiate it from ZCash are:
Monero vs. ZCash
While ZCash’s shielded transactions have, on average, 0.0009 ZEC (approximately $0.05) for fees, Monero’s fees are a little bit lower, with an average of 0.00005 XMR (or $0.002).
ZCash offers different levels of privacy depending on the type of address used to make a transaction. Monero, on the hand, is anonymous by default. The only downside of Monero's default private transactions is a greater load on the network due to heavier transactions.
ZCash is the 20th largest cryptocurrency. Monero has a larger market capitalization than ZCash and is currently the 13th largest cryptocurrency. However, ZCash can boast about having bigger global trading volume than Monero over the past 24hrs.
ZCash’s privacy algorithm is the zk-SNARKs, which encrypts its transactions data allowing them to be authenticated without directly providing information about them. Monero uses an algorithm called RingCT, which works by merging multiple transactions into one before they are recorded in the blockchain and signing them using a random “decoy” key. This way, it’s impossible to identify both the amount and the addresses of Monero’s transactions.
Similarly to Bitcoin, ZCash can be mined. Mining is the process of creating new blocks of transactions by solving mathematical problems associated with them, ensuring the security of the network.
Mining ZCash can be a profitable investment. It’s mostly done by mining pools, a group of several miners who join their resources to mine together with greater efficiency. The block difficulty (i.e: how much computational power is required to create a new block) is always proportional to the total computational power available in the network.
ZCash uses the Equihash as its proof-of-work algorithm, which is a memory-oriented algorithm, in contrast to Bitcoin’s, which is CPU-based. Equihash was developed to prevent the use of ASICs (special computers dedicated to mining a specific cryptocurrency with unparalleled performance), allowing people to mine ZCash with relative efficiency using regular desktops. However, according to the ZCash company, there has been ASICs able to break ZCash’s resistance being used since May 2018. As a result, it’s generally not profitable to mine ZCash using regular computers.
Similarly to many cryptocurrencies, there’s a growing number of vendors which accept ZCash as a payment method. From podcasts subscriptions to apartments, Pay With ZCash is a good starting point to find stores where ZCash can be used. With many tools available for merchants to automatically convert payments in ZCash to USD or other currencies, adoption is not limited by technical hindrances like in the past.
Due to its anonymity features, ZCash is frequently used for humanitarian causes, especially in places with authoritative governments where financial freedom is restricted.
AirTM is a Mexican startup aiming at battling Venezuela’s hyperinflation crisis by providing the residents with an alternative, more stable store of value. In doing so, it allows cryptocurrencies to be converted and withdrawn using non-governmental financial institutions, like PayPal. They are also supporting AirVenezuela, a donation campaign to distribute $1M in crypto (ZCash included) to Venezuelans.
Likewise, ZCash has been the most frequently used cryptocurrency in donations to liberty rights activist Edward Snowden (former US government’s employee famous for leaking critical documents in 2013).
As a reaction, Snowden tweeted:
“Zcash’s privacy tech makes it the most interesting Bitcoin alternative. Bitcoin is great, but “if it’s not private, it’s not safe.'”
How to buy ZCash
As one of the most popular cryptocurrencies, ZCash can be purchased in most major cryptocurrency exchanges. Payment methods can vary depending on the exchange or location, but usually include credit cards and bank transfers.
Some trustable exchanges that list ZCash are:
The Rock Trading
How ZCash is stored
By using applications called wallets, it’s possible to store, send and receive ZCash.
While some wallets need to be download and installed, others can be directly accessed from a web browser.
If it’s your first time using ZCash, you will need to generate a new pair of keys. This can be done directly from your wallet application.
Best ZCash wallets
Picking the best Zcash wallet depends on the type of the Zcash address you're going to use. With whichever wallet you choose, you must be very cautious with your passwords. Make them strong, don't forget to do backups regularly and enable 2-factor authenticator if it is possible. If you lost or forget your password or your private key you will not be able to access your funds.
The most popular free wallets that offer transparent transactions are:
On the web: Bitgo, Guarda, Jaxx, Mobi
On desktop: Exodus, Guarda, Jaxx, Atomic Wallet, Zec-qt-wallet
On mobile: Coinomi, Guarda, Mobi, Atomic Wallet
Jaxx and Guarda wallets have all three options. All of them are user-friendly, do their job good and all of them offer some other cryptocurrencies besides Zcash.
The most secure wallets to use are hardware wallets. Most popular hardware wallets are Ledger and Trezor. The only downside is their price which can vary from $70 to $500 and they only provide transparent addresses and public transactions.
What if you'd want to send shielded transaction, you may ask. You can only do it from couple desktop wallets. These are Zec-qt-wallet, ZECmate wallet, and the Linux command-line reference client: zcashd.
I recommend downloading the Zec-qt-wallet which is not complicated to install even for technologically not inclined people. It is free. It allows shielded-to-shielded transactions and it also offers a memo field where you can add some note for your receiver. It is compatible with Windows, Linux, MacIOS and with Android.
The second option is downloading the ZECmate wallet. It is also free, it also allows shielded-to-shielded transactions and it is compatible with Windows, Linux and MacOS but it doesn't offer memo field and it is a little bit more complicated to set up.
There are currently no exchanges that support shielded-to-shielded transactions.
Gemini exchange announced, in May 2018., that they're working on supporting withdrawals to shielded/private Zcash addresses in the future, but you must know that the privacy is automatically compromised by using a third party. The exchange will know the amount, time, date, the IP address you're logged in with, it will know all your trades, etc.
The benefit of using a private address with an exchange is that your transaction will not be visible to the public (like it is the case with Bitcoin transactions), but only to you and the chosen exchange.
Jaxx is a multi-platform wallet. It supports several cryptocurrencies and can be accessed both from their applications and directly from the browser.
● “Coinbase Earn”, an educational program held by the exchange Coinbase, has ZCash as the featured cryptocurrency of February. Coinbase Earn allows beginners to learn about a certain cryptocurrency and get rewarded with it as they progress.
● The ZCash Company announced that its name was being changed to Electric Coin Company.
Even though not as popular as Bitcoin, ZCash is a widely praised cryptocurrency that introduced a much-needed solution for Bitcoin’s transparency issues. Accordingly, it’s frequently the first choice for transactions in which privacy is a must.
Monero’s popularity, as well as other minor privacy coins’, can be detrimental to ZCash’s price. In relation to them, ZCash still has the advantage of a partnership with one of the largest companies in the world and of allowing for optional privacy, which can result in much lower transaction fees.
Similarly to most cryptocurrencies, ZCash is a highly speculative asset. There isn’t an accurate prediction that could be made about how it will perform in the market.
There are some events, however, that are likely to impact ZCash’s price, including announcements of new government regulations, technological advancements from both ZCash and other privacy coins and new partnerships.
ZCash (ZEC) / Bitcoin (BTC) Price Prediction & Long-Term
Technical Analysis (TA)
Crypto markets have been bleeding for over a year now, and the bear market continues. ZEC/BTC caught our eye. Looking at the daily chart, we can clearly see how extremely cheap this coin is.
ZEC/BTC on a technical analysis point of view is a great buy. But this coin isn’t the type you buy today and sell tomorrow. Long term, ZEC/BTC will give you huge gains, if you’re patient enough to wait for the next bull run, and this is why.
Firstly, let me point out the ZCASH on the daily chart (Binance Exchange) looks bottomed out as shown on the chart below.
Looking at the Fibonacci extensions, potential gains are outstanding in the long-term view. ZEC/BTC at the time of writing is trading with the price of 0.013425 Satoshi that’s already extremely low in price.
On the chart, we also added blue arrows showing you that any flash crash gets bought up really fast and therefore stop loss wouldn’t be advised to use if you planning to hold long-term.
Our Fibonacci extensions shows we could see ZCASH target the 1.1618 extensions starting from 0.028127 up to 0.042487 Satoshi even a new all-time high in the long run.
Let’s add indicators view with price action.
On the daily chart below, you can see a huge bullish divergence spotted on the RSI, plus we even have divergence on the MACD that shows momentum is building even with the price down trending. Let me tell you, that’s a bullish sign!
Storch tells us that ZCASH is trading now on the oversold regions, yet again, good sign for bulls.
Now, Let’s take a look at the EMA Ribbon on the image below.
I zoomed the chart in for you can to see how tight these ribbons are trending against the price and we have been trading in this tight range for some time now. Once the price manages to break above these EMA ribbons and closes the daily above, we could see a massive rally to the upside and the ribbon will turn into support.
ZCash For Traders: Predictions, Crypto Signals And Advice
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Blockchain Whispers Research Team