Altcoins: ZCash (ZEC), What Is It? - A Deeper Look Into The ZCash Platform| FXMAG.COM

The ZCash Platform

Summary:

What is the ZCash Platform and how does it work?
Advantages of the ZCash exchange.
ZCash’s past, present and future price positions.

The ZCash Platform

ZCash is a decentralised cryptocurrency that places its focus on anonymity and privacy. The ZCash exchange uses the zero-knowledge (zk-SNARK) proof of technology, which allows the nodes on the network to verify transactions without revealing any sensitive information regarding those transactions. Although making transactions on the ZCash platform still requires being relayed through a public blockchain, ZCash does not reveal the receiving and sending addresses or the amount being transacted. However, if desired by the user, this information can be revealed on request for auditing or regulatory compliance needs.

ZCash was first released in October of 2016, and was originally based on the Bitcoins (BTC) codebase.

ZCash has four types of transactions,

Public (t-to-t): occurs between two transparent addresses.
Shielding (t-to-z): occurs between a t-address(sender) and a z-address (receiver), transaction is private on the z-address but public on the t-address.
Deshielding: (z-to-t): occurs from t-address to z-address, the transaction is private on the z-address but public on the t-address.
Private (z-to-z): occurs between a t-address and a z-address, all aspects of the transaction are not visible to the public, only recording that a transaction did occur.

All transactions of Zcash are recorded on the Zcash blockchain. Zcash can be purchased on cryptocurrency exchanges and stored in a Zcash wallet or any other regulated exchange crypto wallet.

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The current market valuation for ZEC is more than $1.325 billion, with a circulating supply of more than 14.5 million ZEC and a maximum supply of 21 million ZEC tokens.

The funding of new ZECs is done through “block rewards”, this means that when a new block is mined, it is added to the end of the blockchain, thereafter, coins are minted and split in a 80:20 ratio, 20% into a founders reward and 80% into a miners reward. As the maximum limit of 21 million ZEC is being approached, the block reward is halved after every four years in an attempt to slow the issuance rate.

ZCash uniqueness

One of the main advantages of the ZCash platform is its optional anonymity, which gives ZCash a level of privacy that is unattainable with regular, pseudonymous cryptocurrencies, like Ethereum or Bitcoin.

ZCash transactions can be sent in 2 ways, either shielded or transparent. The transparent transactions work in pretty much the same way as in Bitcoin, whose codebase ZCash was based on originally, the transactions are sent between public addresses and thereafter are recorded in a public ledger (the blockchain). All information that is essential is available online for anyone to see, this includes the amount that was sent and both the sending and receiving addresses. The transparent transactions don’t directly reveal user identities, the only identifiers an outsider to the platform are the public addresses.

Shielded ZCash transactions leverage the zero-knowledge technology condensed non-interactive knowledge arguments, zk-SNARKs, this technology allows the anonymity of transactions over a public blockchain. The fact that the transaction has occurred is recorded in the ledger, but the amount, sending and receiving addresses are not revealed to the public. Therefore ZCash users can enjoy a decentralised, permissionless currency whilst maintaining their right to privacy.

Advantages of the ZCash Platform

Low-rate transactions.
The anonymity of users’ transactions metadata.
Selective disclosure of payment data to a third party.
Transaction expiration.
Multi-signature transactions

Past, present and future prices of ZCash (ZEC)

After the launch of the ZEC network, the price took off almost immediately, however, the spike in price was followed by a gradual but substantial fall. Since then the price took some time to rise again. The price began to rise again toward the middle of 2021 and spiked again during both the first and the second half of 2021, and has since seen quite a lot of volatility.

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Over the past few months, the markets have been facing strong investor risk-off sentiment in the wake of the geopolitical tensions, Covid-19 lockdowns in China and supply chain issues. The cryptocurrency market has followed the trends of the greater market during these times, therefore the price of most cryptocurrencies have been falling, ZCash falls under this category.

According to some analysts the future price of ZEC could reach up to $520 by 2026. However, it is important to remember that this future price prediction is based solely on data and does not take into account factors such as investor sentiment and the ever changing market conditions, both of which make it difficult to make accurate future price predictions.

✕ ZEC Price Chart

Sources: finance.yahoo.com, coinmarketcap.com, cryptonewsz.com, corporatefinanceinstitute.com

Rebecca Duthie

Remote Editor and writer Intern

FXMAG.COM

Rebecca has a bachelors degree in Investment Management, a Post Graduate Diploma in Financial Planning and is currently enrolled in a Masters program in International Management with a Specialization in International Finance.