What is Zcash? (Quick Overview)
Editorial note July 23, 2020: we've updated this article to reflect the fact that most Zcash transactions aren't private, which means most Zcash transactions are traceable. Please be aware of this before using Zcash as a privacy-focused cryptocurrency.
What is Zcash (ZEC)? Zcash is a cryptocurrency that’s designed to be used as a currency, as opposed to something like Ethereum which is designed to enable smart contracts, or automated contracts that power decentralized applications.
Zcash could be thought of as a Bitcoin contender, although Zcash is admittedly much less widely known than Bitcoin.
What is Zcash Used for?
The main feature that sets Zcash apart from currencies like Bitcoin and Litecoin is that Zcash has a feature which makes it almost completely unique: a Zcash user can choose to send a “shielded transaction.” A shielded transaction is anonymous and is not recorded on the blockchain the way a normal transaction is.
There are other privacy coins on the market, like Monero, where 100% of all transactions are anonymous. However, Zcash is interesting in that you can choose whether to send a normal transaction or an anonymous transaction. This is achieved by using a technology known as a zk-SNARK.
A zk-SNARK involves some very complex math but we can simplify it as: a way for a person to prove that they have the Zcash they claim to, without revealing how much they actually have.
The hope for the Zcash community is that by not making all transactions anonymous, and by including a way to de-anonymize a transaction, the coin can stay on the good side of regulators, who generally don't like 100% anonymous cryptocurrencies since they can enable illegal activities.
Note: research has found that Zcash transactions are not as private as users think, with 99% of transactions being traceable. Be aware of this before using Zcash, which like most other cryptocurrencies, is still in its emerging phases.
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Zcash was created in 2013 and was originally known as Zerocoin. At first, the idea was to incorporate the Zcash privacy feature into Bitcoin, however, the Bitcoin community rejected the proposed changes.
Because there was still a strong desire for the privacy technology, even if it couldn’t be integrated with Bitcoin, the Zcash currency was created and the project assembled itself under the leadership of CEO Zooko Wilcox.
Zcash is built to some degree on Bitcoin’s code and shares many similarities with Bitcoin like a proof of work consensus mechanism to validate transactions. Like Bitcoin, all of the Zcash code is open source which ensures maximum community participation toward the improvement of Zcash.
What is Zcash Mining?
Just like Bitcoin, Zcash uses Proof of Work mining in order to secure the network. However, while Bitcoin uses a SHA-256 algorithm, Zcash uses something different, the Equihash algorithm. Unlike Bitcoin where ASIC miners (specialized, expensive, and powerful mining devices) dominate, the Equihash algorithm attempts to discourage mining with ASICs.
It does this by making mining capacity a product of RAM (computer memory) rather than computing power. Due to the expense of increasing RAM capacity, the Zcash team believes that, “it is unlikely that anyone will be able to build cost-effective custom hardware (ASICs) for mining in the foreseeable future.”
Even if manufacturers do find a way to create an ASIC to mine on the Zcash network, the Zcash community has stated that they would consider transitioning to another hashing algorithm should it come to that. For those interested in learning more about mining Zcash, there is a full guide to mining available here.
The Zcash Foundation is fairly unique in that it’s not actually a for-profit company as is typical in the cryptocurrency space. Rather, the Zcash Foundation is a public charity focused on a few key areas.
- Innovative products - The Zcash Foundation is always looking for ways to improve the Zcash protocol. That can be through original development to the blockchain, as well as integrating technologies that have already been developed for other blockchain projects.
- Privacy - The Zcash Foundation believes in privacy and the necessity of protecting oneself from undue surveillance. There is a lot of pushback against private cryptocurrencies and yet cash is also private. People should have a way to transact without having to share the details of their financial transactions.
- Decentralization - The Zcash Foundation is always seeking to further decentralize the Zcash network so that it cannot be controlled by any one person or entity.
If you’re interested in learning more about the Zcash foundation there is a lot of information available on their website.
What is Zcash Worth? (What is the Price of Zcash?)
One of the best ways to keep track of the Zcash price is by using the Exodus price charts. The Exodus charts give you all the information you need about a coin’s price action on just about any scale, from the daily chart to the yearly. Besides Zcash, the Exodus charts are also available for dozens of other popular cryptocurrencies.
How to Buy Zcash
The fastest way to buy Zcash is to trade another cryptocurrency for it. If you are not already registered on an exchange, a great option is to use Exodus. Using Exodus, you can trade tons of popular cryptocurrencies and you don’t even have to create an account! Here’s how to do it.
Note: these instructions are for Exodus Desktop. If you are on Exodus Mobile, follow our instructions for exchanging on mobile.
- Download and install Exodus
- Open the wallet and scroll down on the main page until you find the asset that you’d like to trade for Zcash. If you can’t find your cryptocurrency, you can click Add More and perform a search for the asset
3. Once you’ve opened the wallet page for the asset that you want to deposit, you can click on Receive
4. An address will be displayed and you can send your crypto to it
5. Once the transaction clears, click on the two arrows just to the right of the Receive button.
6. This will take you to the exchange page where you can select the asset you want to trade and how much Zcash you want to buy. Once you’ve entered all the information click on Exchange. The transaction will begin, and you’ll have your Zcash shortly!
Buy Zcash with Fiat (USD, EUR, etc.)
Another option is to purchase Zcash directly with fiat. There are a couple of different cryptocurrency exchanges that will allow you to do so. Coinbase is one of the most popular options and they allow traders from every region except the UK to purchase Zcash.
Kraken also allows its traders and investors to purchase Zcash. While Kraken does allow for a bank account transfer, they don’t support debit cards. Binance US also supports Zcash. You can buy using dollars on their platform using a bank transfer or debit card.
There are a couple of ways that you can store your Zcash once you’ve bought it. One option is the official Zcash wallet which is free and can be downloaded here.
The problem with the Zcash wallet though is that it only works with Zcash. If you want to store other cryptocurrencies, you’ll need to download multiple wallets.
Another option is to use Exodus, which supports 100+ crypto assets including Zcash. It also has the other following features:
- Focus on premium design and ease of use
- Being the only wallet to support desktop, mobile, and hardware wallet (Trezor) integration
- Giving you the ability to exchange cryptos for other cryptos right from your wallet - without creating an account! (desktop guide, mobile guide)
- Support for the best decentralized applications like Compound Finance
- Allowing you to stake some of the hottest cryptos for crypto passive income
- The ability to sync your wallet between desktop and mobile
- and 24/7, fast human support if you ever need help
Looking for the latest Zcash news? Our dedicated Zcash page has you covered with the latest updates on ZEC (located towards the bottom). No more searching through all of the crypto news websites to try and find the latest information about Zcash.
If you’re ready to give Exodus a try, you can download it here!
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.