Zcash cryptocurrency guide advises where to buy and how to buy Zcash. This guide also contains the markets, value, trading, investing, buying, selling, transactions, blockchain, mining, technology, advantages, risks, history, legislation, regulation, security, payment, networks and many other interesting facts about Zcash as well its status in the world of cryptocurrencies.
Zcash, Thursday, 2018-02-22
- 1 What Is Zcash?
- 2 Beginner's Guide to Zcash
- 3 Where and How to Buy Zcash?
- 4 Zcash Markets
- 5 Where to Spend or Use Zcash?
- 6 How Does Zcash Work?
- 7 Zcash Regulation
- 8 Is Zcash Secure?
- 9 History of Zcash
- 10 Zcash Videos and Tutorials
- 11 See Also
What Is Zcash?
Zcash is one of the latest cryptocurrencies in the current wave that started with Bitcoin launch in 2008. It grew from the Zerocoin project established to enhance anonymity in the Bitcoin network. First, Zerocoin was improved and changed into Zerocash that yielded Zcash in 2016.
Zcash, like Bitcoin, is based on a decentralized blockchain but with unique new features that enhance users’ anonymity. It utilizes proof-of-construction called zk-snark that allows the network keep a secure ledger of all the balances without revealing involved parties or amounts.
Zcash was founded by Zooko Wilcox who worked with a team of blockchain experts including Mathew Green of John Hopkins University, and Roger Ver. The founding team deviated Zcash from the common operations of cryptocurrencies by allowing users (individuals, businesses, consumers and new apps) to hold absolute control on who sees their details even when using the permission-less network.
Zcash released a total of 21 million coins that will be issued on a period of 131 years (just like Bitcoin). In April 2017, Zcash jumped to top 10 cryptos based on market capitalization.
Beginner's Guide to Zcash
For beginners, your journey to using Zcash should commence with understanding its ecosystem and comparing with others cryptocurrency such as Bitcoin. Though Zcash depicts many similarities to Bitcoin that was launched about nine years ago, it differs in operational protocol by adopting a highly advanced cryptographic model to enhance transparency and privacy.
A brief comparison of Zcash to other cryptocurrencies
(i) Comparison to Bitcoin?
Zcash depicts many similarities such as following a fixed and well-known issuance model. Just like Bitcoin, Zcash has a maximum of 21 million ZEC that can be mined over time. Zcash was built in the works of Bitcoin but factored zero-knowledge proofs to enable privacy-preserving data. Unlike in Bitcoin where users can still see addresses, transactional amount, and even balances, everything is totally anonymous in Zcash. Besides, Zcash block time is only 2.5 minutes while that of Bitcoin is 10 minutes.
(ii) Comparison to Ethereum?
While Zcash is a unique privacy-preserving version of Bitcoin (a fork of Bitcoin protocol) that targets assisting users to make direct payments without revealing destination, origin, amount, or balances, Ethereum is a decentralized virtual machine. The virtual machine executes smart contracts, facilitates services on the blockchain network, and stores data. With the new features and unique operational protocol, Zcash is destined to provide stiff competition to other top Cryptocurrencies. There is consensus in the cryptocurrency community that Zcash might become a serious Bitcoin challenger.
Getting started with Zcash
To start using Zcash, you are required to acquire the official client called zcashd. This client is specifically designed for Linux. You will specifically need the following to use it;
(ii) a 64-bit processor and an Operating System.
(iii) At least 4GB of RAM.
(iv) No less than ten GB of free disk space (note that the size could increase with time as the blockchain changes).
There are also some third-party wallets that support Zcash such as Jaxx. However, they come with numerous limitations because Zcash demands shielding of addresses and larger memory capacity. Many wallets are yet to meet these requirements.
The Zcash Foundation
The Zcash foundation is the blockchain team that runs, maintains and improves the network protocol. They hold the interest of all users at present and in future. This team is charged with advancing the core Zcash mission, creating and maintaining an open financial technology platform for all.
Where and How to Buy Zcash?
Zcash is a completely anonymous cryptocurrency that utilizes zk-snarks to ensure that all transactions remain 100% private. Like other cryptocurrencies, the first step to buying and selling ZEC (Zcash native asset) is acquiring an appropriate cryptocurrency wallet.
The 4 main steps of buying and selling Zcash
(i) Register for a Zcash account and install their client on your computer. The Zcash client is designed for Linux users. However, new versions that work on Windows and iOS are being created.
(ii) Acquire an appropriate wallet that is supported by Zcash. You could look for a hardware wallet, desktop, or mobile wallet depending on personal preference.
(iii) Get a Zcash exchange. You could also mine Zecs directly on the Zcash blockchain network. A good exchange to consider is Kraken, Shapeshift and Changelley. Note that you will also need to signup on the selected exchange to be able to buy ZECs.
(iv) Follow the exchange procedures to buy Zcash. The same process will be required to sell Zcash for other cryptos or fiat currency. Make sure to pick an exchange that allows you to trade directly with other crypto assets of choice.
What exactly is a Zcash wallet?
A new Zcash user might ask: what exactly is a Zcash wallet? It is a cryptocurrency wallet that is designed to hold your coins for specific blockchain network. In this case, the Zcash wallet holds the blockchain coins (native assets) ZECs.
But the definition is actually a misnomer! Cryptocurrency wallets do not store crypto coins in reality. What they store are private keys and public keys. The private key is the secret code that only you and the wallet knows while the public address is what helps to identify your balances and history when making confirmation. You must have the private key to make any transaction.
When making a transaction, what you share with other users in the Zcash network is the public key. The wallet must always be properly stored and keys protected from third parties. If they get lost, there is no way to recover them. You lose all the history and store crypto assets.
The Zcash wallet
There are several types of wallets that you can pick to act as your Zcash wallet. This depends on the type of transactions and the anticipated security. Some wallets also allow easy connection and transactions with e-commerce stores and direct conversion of fiat currencies to cryptocurrencies. You can pick any of the following categories of wallets.
(1) The Zcash desktop wallets
The desktop Zcash wallets also run the local client and operate as a full node in the cryptocurrency network. You are required to acquire and install a Zcash client in your computer before starting to trade. The Linux Local wallet is the official client for the network. However, Mac and Windows clients are also available and maintained by Mercier David.
Once you install the wallet on the desktop, you have absolute control of all the transactions. However, you also need to maintain the system well because the wallet can get lost in case the computer is formatted or gets stolen.
(2) The Internet Wallets
The easiest and fastest way to start buying and selling Zcash is getting internet wallets. They are designed as web apps for storing private and public keys. Note that unlike the desktop wallets that are installed on your device, the web-based wallets are based on the web. Some great examples of internet wallets include Jaxx, Coinomi, and Freewallet. However, the internet wallets are more prone to hackers than other types of wallets.
(3) The hardware wallets
These are the safest wallets to store your Zcash as well as other cryptocurrencies. They are sold as physical hardware (the size of an index finger) for storing your private Zcash network keys. They allow users to store the private keys offline and, therefore, away from hackers. Besides, the keys are not moved to the computer when making transactions. The latest models also make it possible to recover the Zcash stored in the wallet in case they are lost.
The main disadvantage of using hardware wallets is that they are very expensive. Some examples of hardware Zcash wallets include the Ledger and Trezor.
Best practices for keeping your Zcash wallet safe
Your Zcash wallet is the most important thing when trading in exchanges, mining or making other transactions. In fact, you cannot do anything without it. Therefore, it must be protected at all costs! The following are best practices for protecting your Zcash wallet;
- Make sure only to pick and use the most trusted wallet.
- If you are using the local/desktop wallet, make sure to only access the wallet from the computer. You could even designate it for one role; accessing and trading in the Zcash network.
- Make sure to always triple check the recipient address when making a transaction.
- Pick very strong passwords that are extra hard for hackers to crack.
- Ensure that the computer is protected with a well-updated antivirus.
- Do not access or download apps you are unsure about their authenticity.
- Make sure the Zcash client is the latest version.
- Avoid accessing your Zcash wallet via public Wi-Fi.
- Be extra careful with wallets advertised as Zcash compliant. Some might actually be malware.
Where to Buy Zcash with Credit Card?
Where to buy Zcash with credit card
For about 10 years since the entry of blockchain technology, many people viewed cryptocurrencies with suspicion. Even today, it is not uncommon to hear people associating the anonymity of transactions with fraudsters and drug dealers. With most of the cryptocurrencies operations being complicated to many people, the need to make cryptocurrencies a daily reality is very crucial. To bridge this gap, the Zcash team has worked extra hard to make its users capable of linking and exchanging ZECs and fiat currencies easily. To buy Zcash using a credit card, you should use CEX.IO.
What is CEX.io and how does it operate?
CEX.io is a cryptocurrency exchange platform established in 2013 for Bitcoin trading. It operated as a BTC exchange and a cloud mining provider. The main focus of CEX.io was to use expert knowledge of mining hardware to develop huge hashing power for rent. The cloud mining grew so big that it held about 42% of the cumulative Bitcoin mining power at one point.
In 2015, the cloud mining wing was closed and CEX.io now only runs only as a Bitcoin exchange. The exchange services are available in 25 states in the US and 99% of the countries globally.
On 2nd October 2017, CEX.IO announced that it was adding Zcash on the list of the assets to trade in its system. You can simply buy Zcash using your credit cards on the CEX.io.
To use CEX.io with credit cards, you are required to start by registering an account on its system. The same way that forex exchanges are extra cautious, CEX.io has a rigorous verification model. Before you can start buying Zcash with credit card, the following details are required;
- Personal details that include a phone number, address, place, and date of birth, name, and gender.
- Government identification documents such as passport, driver's license, or Identity Card.
- Proof of residence such as bank statements or utility bills.
- The applicant’s selfie with the identity document.
The rigorous confirmation method is considered a very important step in a niche where suspicion never fades from the people’s minds. Once all the details are provided, it takes about 24 hours to get verified, and the trading account confirmed.
CEX.io trading limits and fees
The amount of Zcash you can buy using the exchange depends on the selected plan. By allowing traders to deposit their cash using credit cards (commonest payment method), CEX has stood out from other exchanges by attracting a lot of users. Here are the plans and the amount you can use to buy Zcash. Please always confirm the last updates about the deposit limits from CEX.io website since the amount may change every now and then.
(a) The Basic Plan allows traders to only deposit $300/day and $1000/month.
(b) The Verified Plan allows users to deposit $10,000/day and $100,000/month.
(c) Verified Plus plan has no limit.
(d) The Corporate Plan has no limit.
To use a credit card to buy Zcash, the card is subjected to additional verification to confirm that it belongs to the account holder and that the funds are enough. The main currencies supported on the exchange include the US dollar, Great Britain Pound (GBP), Euro (EUR) and Russian Ruble (RUB).
In addition to Zcash, other cryptocurrencies traded in the exchange include Bitcoin, Ethereum, and Litecoin.
The fee for using a credit card on CEX is very high. For those trading directly on the exchange, a fee of 7% is charged. The charges for peer-2-peer purchase of Zcash depend on the plan and trading volume measured in Bitcoins. Please always confirm the last updates about the transaction fees from CEX.io website since the percentage may change every now and then. Transaction fee is based on your 30-day trade volume for all pairs, which is recalculated at 00:00 (GMT) each day and includes current day's trades. Here are the charges;
(i) Any volume below 5BTC is charged 0.20%.
(ii) Volume below 30BTC is charged 0.19%.
(iii) Volume below 50BTC is charged 0.18%.
(iv) Volume below 100BTC is charged 0.17%.
(v) Volume below 200BTC is charged 0.16 %.
(vi) Volume below 1000BTC is charged 0.15%.
(vii) Volume below 3000BTC is charged 0.13%.
(viii) Volume below 6000BTC is charged 0.11%.
(ix) Volume above 6000BTC is charged 0.10%.
Should you use CEX.io to buy Zcash with a credit card?
CEX is one of the most progressive exchanges with a team fully committed to taking Zcash to all the people globally. Other specific benefits you get for using CEX include the following;
- An easy to use interface: The CEX interface is carefully designed to make trading easy and fast. The page load speed is satisfactory, and all features allow you to take actions with just a click.
- It is available for mobile use: By making the exchange available to both Android and iOS users, it means that you can now buy Zcash even on the go.
- A highly professional and responsive support. Many people trading in Zcash want to have the assurance that their cryptocurrencies are safe and easily accessible. The customer support is professional and answers all queries promptly. Whether you are stuck at the start or during the Zcash purchase process, they are always ready to assist.
- Very high security: The exchange has a two-factor authentication process that makes intrusion very difficult. The only hacking that happened was in 2013 immediately after the launch.
The main downside of the exchange is that it is very expensive and its verification model is very demanding.
Where to Buy Zcash with PayPal?
One obstacle that faces people who anticipate joining the cryptocurrency space is the difficulty in purchasing the coins of choice. Lack of appropriate legal frameworks, fraudulent charge-backs, and uncertainty has made traditional financial exchanges to shy away from supporting the purchase of crypto assets. Technically, it is not possible to directly buy Zcash with PayPal. But you can still buy the Zcash using PayPal even though the process is relatively lengthy. Here are the two main steps buying Zcash with PayPal.
(i) Buy Bitcoins at an appropriate virtual exchange such as VirWox
VirWox is a virtual exchange that allows users of conventional fiat wallets such as PayPal to deposit cash. Note that just like other exchanges, the VirWox requires users to create accounts and verify them before transactions can commence. Once a user account is created and confirmed, you must change the password before proceeding. This is a very important security step to keep the account secure and free from hackers.
After the account is set, navigate to the Deposit section on the dashboard and select PayPal. You will be redirected to your PayPal account to log in and select the amount to deposit. It is important to ensure that there is ample cash in your PayPal account to make the payment.
Depending on the prevailing rate, purchase Bitcoins at the exchange and transfer them to your cryptocurrency wallet. If you do not have a cryptocurrency wallet, it is prudent to pick one such as Jaxx, Coinomi, or Ledger.
(ii) Use the Bitcoins to buy Zcash from an appropriate exchange
Using an appropriate exchange such as Poloniex, Bittrex, or Changelly, generate the Bitcoins you stored in the Wallet and buy the equivalent of Zcash. You can also use Zcash to trade for other coins. Make sure to carefully assess the prices of Zcash on different exchanges. You should also factor the charges because they will also eat into the Bitcoin stored in the wallet.
Though the process is hailed by many because it allows users to purchase Zcash without first converting to fiat currencies, it comes with some major setbacks;
- It is lengthy and very technical.
- The user is required to create many accounts and move the money through a very long chain.
- The lengthy registration process and signup to multiple accounts raise the risk of intrusion.
- The money is moved through multiple parties.
How to Buy Zcash with Wire Transfer?
Many people are inclined to buying crypto assets using their bank accounts because it sounds convenient. The main reason for this is that you do not need thinking a lot since the bank is handling everything compared to acquiring the Zcash using an online exchange. In many cases, this is the wrong approach. For example, you do not have anything holding you back from buying Zcash as far as the urge hits you. This raises the danger of over spending on cryptocurrencies.
The best way to go about buying Zcash with wire transfer is to set up a separate bank account. This means that you can easily follow the transactions, carry comprehensive analytics, and most importantly separate trading account from personal savings.
Notably, most banks do not accept direct purchase of Zcash using their systems. Therefore, you will need to acquire Bitcoins and use them to buy Zcash. Some sites that allow users to buy Bitcoins using Wire transfer include;
- CEX.io: This is one of the most progressive trading platforms established in 2013. Though it was established to trade Bitcoins, they have recently announced that Zcash would also be supported.
- Coinbase.com: Coinbase is an asset broker that acts as a bridge between fiat and cryptocurrencies. They accept most of the payment methods including wire transfer. Once you have acquired Bitcoins, go ahead and buy the ZECs you want.
- Livecoin.net: This is a unique Bitcoin and Altcoin exchange platform that provides crypto traders with an opportunity to trade in selected crypto pairs. They also allow users to buy Bitcoins using fiat currencies.
- Bitfinex.com: This is the most advanced cryptocurrency exchange in the market today. It stands out for supporting multiple payment methods including wire transfer for buying Bitcoins.
What is the process of buying Zcash using Wire transfer?
Notably, SEPA/ACH transfers and wire transfers are different. If you are in the US, the best option to consider is Coinbase because it is allowed by most banks. Coinbase.com allows users to buy Bitcoins using ACH accounts.
If you are in Europe, the better option is SEPA transfer. You should particularly consider Bitstamp or Kraken because they have won a very good reputation in the Bitcoin market.
For people who want to buy Zcash but are located outside the US and Europe, websites that allow buying of Bitcoins include Bitfinex and Bitstamp. Note that the fee for depositing funds using wire transfer differs depending on the website and respective banks.
Once you have the Bitcoins, your world of cryptocurrency opens. Use the crypto wallets to buy the Zcash of choice from the selected exchange.
Risks to be aware of when buying Zcash using wire transfer
Though the blockchain technology is growing very fast, many banks are extremely rigid. Here, your transactions are likely to face the following risks;
- The banks will want to have a closer look at the transactions. This could compromise the notion of anonymity sought by going crypto.
- Because many transactions are anonymous, there is a risk that the account could be flagged as fraud. This could result in payment being denied or account getting blocked.
- Most banks will charge very high fees to make such transfers compared to regular wire transfers.
- The process of buying Zcash is likely to take longer. This is because the banks take longer to verify the account holder details and where the payee.
Wire transfers are very expensive compared to other methods of payment when buying Zcash. Despite this, many people still look at it as a more convenient method because it involves the bank. A great idea would be looking for an alternative such as Credit or Debit card that provide a more direct method of purchasing Zcash.
Where to Sell and Trade Zcash?
The emergence of cryptocurrencies and blockchain technology has created a new investment avenue. Just like people trade different currencies in forex exchanges, cryptocurrencies are the latest assets. Crypto assets, unlike fiat currencies, trading depends on the nature of respective blockchain network, security, and prospects.
Recently, special interest about cryptocurrencies has emerged from governments. From the US to Japan in the Far East, the focus has been on setting up a good legal framework for crypto assets trading. It appears that the minds behind the cryptocurrencies are rushing faster, and governments are only left to catch up. Therefore, you need to make a move when you are sure of operating on the right side of the law.
Important tips for picking the best exchanges
Cryptocurrency trading has grown rapidly in the last 9 years. A lot of platforms have emerged to help people buy and sell various crypto assets in various exchanges. In some cases, the exchanges even allow people to buy the cryptocurrency of choice using fiat currencies. Before you can set out looking at the different exchanges out there, it is important to understand how to pick them.
- The country that the exchange is located: If the cryptocurrency trading platform is located in a country not supported by your local legislation, it might be impossible to use it to trade Zcash.
- The methods of purchasing Zcash or crypto assets: This is a very critical factor because pit determines the length of the ultimate chain, associated fees, and fees. A great exchange should accept multiple deposit methods including credit cards, PayPal, and other multiple deposits.
- The charges: If the exchange fee is very high, there is a high risk of getting the entire profit margin going low. You might need to compare the fee between various exchanges.
- The exchange order book volume: Good exchanges go to the extent of publishing their order books for Zcash traders to see. An order book is a complete list of both ‘buy’ and ‘sell’ orders that are being offered on the exchange. If the order volume is high, it means that more people are using the platform and liquidity is very high.
- Transparency of the exchange: When an exchange is transparent, it publishes its cold storage address and provides Zcash and other traders with the address to carry verifications. This is very crucial at a time when a lot of scams have entered the crypto world.
- The reputation of the exchange: The risk of losing your crypto assets is always looming. Your account could be hacked, or the ZECs could be sent to the wrong address. You can reduce these risks by picking a highly reputable cryptocurrency exchange platform. Consider checking whether it has a history of hacking.
- Top notch anonymity: One of the main reasons for entering the cryptocurrency niche is to operate anonymously. You want to make transactions that are fully anonymous such that only the buyer and seller get the details. The exchange you pick should be committed to advancing this anonymity. It should prove that the Zcash trading details are fully shielded using encryption and multiple security layers.
- The speed of getting Zcash after purchase: Cryptocurrency traders on different exchanges want to get prompt transactions. The best exchange should, therefore, get ZECs to your crypto wallets as fast as possible to allow users take advantage of new opportunities.
- Support for multiple crypto assets: A great exchange platform should provide users with multiple opportunities by supporting a number of crypto assets. You should particularly pick an exchange that supports the top crypto assets in the market including Bitcoin, Ether, Zcash, Bitcoin Cash, and Litecoin.
If you want to sell and trade Zcash, the following are the best platforms to use.
This is one of the full-features cryptocurrency trading platforms for top currencies including Zcash. The target of the exchange has been to ensure that traders have access to the major cryptocurrencies to make trading easy and fast. Using their peer-to-peer funding market, you can trade Zcash for Monero, NEO, Iota, Bitcoin, Bcash, Ripple, and OmiseGo among others.
The trading exchange allows up to 3.3x leverage trading by availing peer-to-peer funding market to Zcash traders. The liquidity providers earn interest by providing funds to traders.
To make trading easy and enjoyable for all, Bitfinex has a very intuitive user interface. The tools and features include the TradingView charts that make it possible to draw, annotate, download, and even share the charts. The advanced tools also allow users to do the following;
- Visualize the Zcash orders, price alerts, and positions.
- Modifying order properties.
- Dragging to change the Zcash order prices.
- Checking the position profits of Zcash and other assets.
The main disadvantage of using Bitfinex is its complication for beginners. As a newbie, one needs to take some time familiarizing with the exchange before starting to trade Zcash.
This is a US based cryptocurrency exchange that has won praise far and wide. It has some of the highest cryptocurrency trade volumes in all exchanges. To keep Zcash users assets secure, Poloniex stores users’ ZECs offline in cold storage. They only maintain ample float to facilitate daily trading to minimize risks. The exchange has a 24/7/365 monitoring program for checking, identifying and blocking any suspicious activity. This has made Zcash users feel extra secure when operating on the platform.
As a Zcash trading platform, traders have options for dealing with many altcoins. This means you can trade Zcash for the most profitable asset. Poloniex further provides good liquidity and does not have deposit fees.
The main drawback of using Poloniex is that it is not suited to for fiat currency trading. It is also relatively slow, and the support is poor. These setbacks have made some people opt for alternatives such as Bitfinex that help them make decisions promptly.
Kraken describes itself as the biggest Bitcoin exchange in liquidity and euro volume. Like other exchanges, Zcash traders are required to create an account at Kraken and have an appropriate Zcash crypto wallet.
The main goal of Kraken is creating an ideal environment that users can interact and trade in the most profitable assets. They provide high liquidity and fast funding so that Zcash traders can pounce on every available opportunity to optimize profits.
To keep the crypto assets secure, Kraken maintains all the crypto coins encrypted in cold storage. This is the reason that Kraken does not have any history of Kraken.
The fees on the network are low, and liquidity in the European market is very good. Zcash traders are only charged a maximum of 0.26% for trading on the platform. Therefore, you will be able to retain the bulk of the profit grow the Zcash portfolio rapidly.
Despite its excellent performance, many people have had a number of issues with the system including;
- The support for mobile devices is very poor. Users are, therefore, mainly restricted to using their computers when trading in Zcash or other assets on the platform.
- It lacks the No-Advanced orders feature that allows users to set loss limits. This means that you must always be there to physically check when the trading market starts falling to stop and avoid losses.
- When the demand surges, many Zcash traders report uptime problems.
BitSquare was established to operate as a decentralized and open source exchange platform with a focus on making anonymous trading possible. The platform achieved this by allowing Zcash and Bitcoin traders to trade directly without involving third parties. This approach has two major benefits;
- Trading is safer because only the buyer and seller know about the transactions.
- The system is less pervious to Denial of Service Attacks.
- The risk of theft is lowered by a huge margin.
- It is more private compared to other networks.
By operating with an open-source and decentralized model, BitSquare ensures that all transactions are encrypted and anonymous. This is the reason that BitSquare has often been considered the exchange that can extend the Bitcoin’s principle of anonymity to the globe.
Though the trading model is indeed complex, getting started is relatively easy. Users are required to open an account, deposit their fiat currencies and buy Bitcoins. Then, they can buy Zcash and start trading on the exchange. Despite the highly admirable operational model, BitSquare has some serious flaws.
- Because it operates as a decentralized exchange, advanced features are not available. This could limit the exchange use especially to newbies.
- Since respective users host order books, the buyer and seller must be online to trade in Zcash. This greatly limits the capability to automate selling and trading Zcash.
- The BitSquare exchange support is relatively slow compared to other companies such as BitMex and Poloniex.
This is an international cryptocurrency exchange started in 2014 to incorporate a wide range of deposits. It has particularly stood out from other exchanges for supporting deposit from fiat currencies. The exchange provides Zcash trades with 30% - 100% leverage.
The main strength of BitMex comes from its focus on security to protect Zcash and other asset traders. Since the exchange started trading, its focus on security has helped to keep off hackers completely. No case of hacking has ever been reported on the network.
When trading Zcash, users appreciate the site’s extra speedy system. The system is written in kdb+, one of the most advanced database toolset used by top banks for fast trading. This has been the main reason for the super speed of the platform and extra reliability.
Though BitMex is recommended for those anticipating trading on the network, users from the US are disallowed because the exchange is considered non-compliant to the local fiscal laws. Though some users still trade Zcash on the platform from the US by using VPN, it is advisable to review the benefits and cons carefully.
If you anticipate trading Zcash and other cryptocurrencies on spot and futures with a very high margin, this is a great place to start. The exchange has a high liquidity, and the user interface is very intuitive.
How Much Are the Transaction Fees of Zcash?
Transactions in Zcash network involves the use of shielded addresses when sending or receiving cash. In every transaction, the process requires generating zero-knowledge proof that allows miners in the system to verify the encrypted info without revealing the owners.
The transaction costs on the Zcash network are not fixed. Since its launch, the fees have been fluctuating based on the prevailing conditions such as the value of ZEC, miners at the time of the transaction, and demand.
The highest transaction fee on Zcash network was USD 0.002 reported on 10th August 2017. On 17th November 2017, the average transaction fee was 0.0014. Here is a closer look at the transaction fee at different times according to Bitinforcharts.
- June/2017: 0.0004 USD.
- July/2017: 0.0005 USD.
- August/2017: 0.0014.
- September/2017: 0.0004.
- October/2017: 0.0007.
- November 17/2017 0.0014.
Cryptocurrency markets are exchanges that allow people trade in different crypto assets. Note that these markets are independent entities and, therefore, require users to signup for accounts before buying or selling cryptocoins such as ZEC. The platform you select depends on the type of transactions of interest. For example, do you want to trade Zcash for the top cryptos such as Bitcoin, Ether, or Litecoin?
As one of the leading cryptocurrencies, Zcash is available in markets such as HitBTC, Bithumb, Poloniex, Biltfinex, Bit-Z, AllCoin, CEX.io, BTC-Alpha, and Coincheck. Make sure to carefully check the conditions for trading in respective markets such as cost, security, and ease of use.
Value of Zcash
Immediately after Zcash was launched, traders went into a frenzy trying to get the new coins because of the media hype. It is because of this volatility that one of the exchanges, Poloniex showed the price of one Zec hitting 3,299.99 BTC (the equivalent of $ 2.3 million by then). Within minutes of launch, the price fell sharply and settled in the range of $400-$700. Because of the limited supply and a shifting demand, experts argued it was long before stability could be hit.
By April 2017, Zcash entered the top ten cryptos by market capitalization. This has seen more cryptocurrency markets adding Zcash into their portfolio for their clients. For example, days after CEX.io added Zcash to its traded assets, Bithumb followed suit.
The main booster of Zcash is its design that allows people to transact without posting personal financial details in public. This has aroused a lot of interest especially from people who have suffered privacy-related issues in other blockchain networks.
At the beginning of the November in 2017, the launch of Zcash investment Trust by the famous Grayscale Investments, LLC has made more investors start seeing the cryptocurrency from a long-term perspective. Note that Grayscale Investments is the asset manager sponsoring the two other biggest cryptocurrencies, Bitcoin and Ethereum. This means that Zcash value is edging closer to the level of Bitcoin and Ethereum. Some investors have even pointed that the chances of ZEC value surpassing Bitcoin at some point are not far-fetched.
Is It Profitable to Invest in Zcash?
As interest in cryptocurrencies continues to grow, the main question that people are asking is what is the best crypto to invest in? Therefore, is it profitable to invest Zcash? To get a clearer answer to this, it is important to take a look at the corporate strategy used by the Zcash team. The Zerocoin Electric Coin Company has insisted that their cryptocurrency will not join the rest as part of the dark web. They have demonstrated this by bringing JP Morgan as one of their clients. Though this might be taken with a lot of suspicion in an industry where anonymity defines every concept, some experts see it differently.
- It is a great way to bridge cryptos to fiat. This means raising the demand for Zcash even from people with little knowledge of the crypto world.
- It is a perfect way to prepare for legislations that are looming from every angle both in the US and away. When the hammer strikes, Zcash will not be affected like other cryptocurrencies. Its value and demand will continue to rise.
On top of the two scenarios, Zcash is the leading anonymous cryptocurrency because of its unique cryptography, and strong team. For people who believe anonymity will take cryptocurrencies to the next level, there is no doubt that the revolutionary technology used in Zcash edges it far ahead of its peers.
From the fact that Zcash has the backing of some of the leading blockchain investors, big corporates are joining the network, and the lead-team is highly focused, the cryptocurrency is strategically positioned to continue growing in value. Therefore, while some aspects of Zcash might be less desirable, looking elsewhere is being emotional. It is one of the greatest places to invest and anticipate high profitability.
Where to Spend or Use Zcash?
As one of the newest cryptocurrencies, Zcash has not been integrated into many stores and facilities. This means spending it directly to make purchases is a challenge. But Zcash is designed to deliver high fungibility which means you can easily convert to other cryptos that are accepted online to make a purchase. As a cryptocurrency that was modeled on the Bitcoin network, having Zcash on your wallet is only a step away from buying anything that Bitcoin can.
Some of the common places that people with Zcash can spend their crypto assets include; Shopify, Expedia.com, Overstock.com, Newegg, and eGifter. This list is expected to keep growing as more stores start accepting cryptos. If the looming legislation favors the cryptocurrencies, the chances are that virtually every store will start accepting Zcash.
Can Zcash Grow to Become a Major Payment Network?
Yes, it can. In fact, it is already on the path of becoming a great payment network. When Zcash was launched, the main focus was to enhance anonymity that was diminishing in other networks. But the Zcash team did not simply deliver this anonymity. It went beyond that. The following are the hidden tricks that could make the cryptocurrency one of the best payment networks.
- They perfected the publicity that helped to draw people including those outside the crypto world to the network. These are the people who will ultimately start using the network to make need receive cash.
- The Zcash management team is a group of seasoned computing experts. This has been used to win trust and acts as a guide to where the blockchain technology is going. More people want to make payment and get associated with a network that demonstrates a lot of potential.
- The transactions are completely anonymous. Using the advanced zero-knowledge proof (zk-SNARKS), users can make payments without revealing their identities. This has been a great attraction especially for those who are running away from other semi-anonymous networks.
- Zcash is a great network that helps users to comply with regulatory obligations. A user can activate the selective disclosure that allows the network to disclose transaction history and details for auditing purposes. You can, therefore, use the blockchain for auditing purposes because the transactions are already in a ledger or proof compliance with existing tax laws.
- By allowing users to demonstrate their transactions and proof they are compliant with different laws, it is thought that the Zcash model will be used to inform the upcoming legislation. This is attracting more people to the network for payments because they are assured of being on the correct side of the law.
How Does Zcash Work?
Zcash is a cryptocurrency that uses decentralized blockchain to provide higher levels of anonymity for all transactions and users. It works in many ways like Bitcoin such as being open-source but differs in offering higher privacy levels and fungibility.
Fungibility is the ability of a product to serve as good as another. Therefore, unlike Bitcoin that operates as an open ledger, Zcash runs as an encrypted ledger. This means that transactions are fully encrypted and can only be accessed by those with access.
Some people might ask; why is fungibility in Zcash so important? In other blockchains such as Bitcoin, users in the network can track the transactions in the open ledger. This means that a seller can follow buyers' previous transactions and reject his payment in case there is a feeling that there is the conflict with seller’s moral stance.
Zcash uses Zero-Knowledge Proof cryptography that makes it possible for two parties to engage without either party revealing the other’s details. The addresses used on the Zcash network are not the actual user’s details, but shields for blocking the transaction path. Zcash operation has been referred as the ultimate way to take blockchain technology to a fully anonymous system it was originally intended.
Like other cryptocurrencies, Zcash strongly relies on mining. Whether you are sending, receiving, or doing any other transaction, miners help to confirm the transactions for reward in ZECs.
Does Zcash Use Blockchain Technology?
Yes, Zcash uses blockchain technology. Zcash is a cryptocurrency founded on a digital ledger referred as blockchain and that lives in multiple computers spread all over the globe. Notably, the blockchain is greatly modeled on the Bitcoin system but with numerous modifications to enhance usability, link to fiat currencies, and advance blockchain technologies.
Zcash runs a blockchain that records and at the same time broadcasts the transactions after encryption. This means that the blockchain hides all the details such that other people on the network can neither tell the details nor the parties involved. A new block is added to the Zcash network every 2.5 minutes by miners.
Mining is the bedrock of Zcash blockchain operation. To put it differently, the nodes in the Zcash network spread across the globe mine to add new blocks through transaction validation and offering network security. A miner is rewarded in ZECs for these tasks.
Therefore, one of the principal alternatives to buying ZECs is mining. How does one go about Zcash mining? The good thing about Zcash mining is that lit is very simple. Unlike other blockchains such as Bitcoin and DASH that require miners to download complete blockchains or manage heavy command lines, Zcash allows users to mine directly using their wallets. Here are some benefits of mining Zcash;
- Mining is a great method of getting Zcash instead of buying.
- Since Zcash is directly traded for BTC, mining it is a perfect way of building your position in Bitcoin. Today, many cryptocurrency experts are very bullish about Zcash.
- Because BTC can easily be sold for fiat currencies, mining Zcash is a great way to get more cash into your bank account.
- Mining Zcash is a high potential investment. Today, Zcash value has grown rapidly and is being grouped with Bitcoin. This means that its value is likely to continue on an upward trend. Therefore, it is a great idea to mine the coins now and sell at a profit in years to come.
Zcash mining hashrate and difficulty
Zcash uses Equihash algorithm that is incompatible with ASIC mining hardware designed for mining Bitcoin and other altcoins. The equihash algorithm is carefully engineered to ensure that miners can use their computers. This prevents the danger of locking out many people from mining because they cannot afford expensive mining hardware.
Unlike the Bitcoin’s 10 minute block-time, Zcash adds a new block every 2.5 minutes. For every block mined, a reward of 10 ZECs is given to the miner.
The mining hashpower requirement in Zcash has been increasing steadily starting from the last quarter of 2016. The computational difficulty is adjusted automatically in every 2.5 minutes. The shifting difficulty is associated with Zcash’s price explosion.
Every 10 minutes, the Zcash Block Rewards issues 50 (ZECs). If you consider the fact that blocks are spaced at intervals of 2.5 minutes, it means that every block produces a total of 12.5 ZEC. 10% of the total mined coins are given to the Founder’s Reward.
Pick the best GPU mining hardware and a crypto wallet
Note that your phone, laptop or old video cards cannot be used for any profitable Zcash mining. Therefore, it is important to get the best video cards that will generate high hash power on your computer or laptop.
The selected video card should have more than 1GB of RAM to mine appropriately. Many experts recommend that you go for Nvidia cards such as the GTX 1060-6GB/1070/1080 Series. Remember to try and get the cards from a gamer as opposed to a miner. The bottom line to picking the right mining hardware is optimizing the hash power.
Now that you have the right hardware, pick an appropriate crypto wallet. A crypto wallet is used to store your private keys and public keys that are required when making any transaction on the Zcash network. Some great examples include Ledger Nano S, Trezor, or Jaxx. Today, Zcash has made it even possible to mine from top exchanges such as Bittrex. Remember that Zcash also allows users to use its main client as a wallet.
Install the video cards and download the Zcash miner
Let us pick a platform such as Windows and demonstrate how to mine Zcash. The process is pretty similar to other operating systems. Once you fix the cards, download their drivers and install the latest updates. Most of the video card manufacturers such as Nvidia have vibrant teams that keep updating their drivers for optimal performance.
At this point, you need to identify a good Zcash miner. It is strongly recommended that you only go for miners with a high rating in Bitcoin communities such as Bitcointalk. A great example at this point is EWFB Miner. Before you can commence mining, it is important to get the latest updates and install them on your PC. The selected miner is what gives the mining interface on the computer display.
Important tweaks that make Zcash mining run effectively
To mine Zcash profitably, you need to keep the computer on for 24 hours or most hours every day. Some computer settings might also give warnings when you want to install software such as miners. Therefore, make sure to include the following tweaks.
- Change the power settings so that the computer will never go to sleep to avoid interrupting your mining.
- Modify the computer system file page to 16GB.
- It is advisable to disable windows updates because most updates usually reboot the computer system.
Join an appropriate mining pool
If you are mining alone at home, the chances of making profits are very slim. The best way to raise the chances of making more and enjoy the process is joining a mining pool. These are groups of miners who consolidate the mining hashrate to increase the chances of solving the Zcash computing problems. The only downside of the pools is that the profit is shared across the members.
What Are the Advantages of Zcash?
- Mining can be done using standard computers
- The driving force of any cryptocurrency is mining. Miners help to confirm transactions for a reward. However, top cryptocurrencies such as Bitcoin have made mining extra difficult by requiring expensive ASIC hardware. Zcash stands out because its unique proof of work algorithm allows people to mine using their computers down at home.
- Zcash client also serves as a crypto wallet
- When dealing with cryptocurrencies, many people have indicated the inconveniences of dealing with so many third parties that gallop huge quantities of their earnings. For example, trading in a cryptocurrency requires one to be part of that cryptocurrency, signup for an appropriate wallet, and join an exchange. If your cash is in PayPal, more third parties might be involved. However, Zcash helps to clear most of these third parties by serving as a cryptocurrency and a digital wallet.
- Zcash is directly traded for Bitcoin
- Zcash was modeled on the Bitcoin system. This proximity to BTC and its emerging market strength has made most exchanges to agree trading it for BTC. Because Bitcoin is accepted as a payment method in many areas, cryptos close to it such as Zcash also enjoy the same status. You can simply convert ZECs to BTC within seconds and purchase in an online store.
- It is a great investment
- When Zcash was first released in 2016, the price shot up before falling steadily within minutes. This was attributed to the market hype that preceded the launch. However, the value of Zcash has grown steadily over the months, and experts are very bullish. Now, even top corporates such as JP Morgan have joined to enjoy growth in their investment.
- Guarantees high privacy when sending cash
- One of the main reasons why Zcash was launched is to make transactions truly anonymous. In Bitcoin, it is possible to follow back transactions that could reveal the identity of the people involved. However, the cryptography used in Zcash helps to shield all transactions so that people in the network will never know about the transaction or people involved.
- Zcash can be bought using multiple methods
- Many people who want to join the cryptocurrency world often find it difficult to join because of the lengthy procedure for converting from fiat. Zcash allows users to buy ZECs using multiple methods including their bank accounts. Today, you can buy Zcash using Bitcoin, Wire transfer, PayPal and Credit cards.
What Are the Risks of Zcash?
The ongoing hype about cryptocurrencies has made a lot of people move in droves from the fiat in anticipation of huge profits. This is especially true in highly valued cryptocurrencies such as Bitcoin, Bitcoin Cash, Ethereum, and Zcash. Many experts are, however, indicating that people trooping to the cryptos might be oblivious to the involved risks. The main risks involved with Zcash include;
- The zero-knowledge proofs algorithm is relatively new
- When it comes to investment, many people want to follow models that have been tested for years and demonstrated to work. These are strategies that are subjected to extreme stress limits and proven to hold. With this in mind, the highly touted zk-SNARKs algorithm could be a great risk in itself.
- While the zero-knowledge proofs algorithm helps to take privacy to the next level, some people are indicating that it might not work on the long term. For example, some argue that the ability to follow transactions in the Bitcoin network is very important because people can avoid fraud and cybercriminals. Therefore, could the zero-knowledge proof turn and become a burden?
- Zcash Equihash is ASIC resistant
- While the main idea of using equihash Proof-of-Work algorithm was to allow more people to mine using standard computers, the assessment that made Zcash prefer making its system ASIC resistant could be worse than allowing mining rigs.
- The financial focus surpasses the notion of technical decentralization in Zcash. This means that while Zcash managed to prevent any of mining parties to take control of over 50% of the coins in the Zcash network, the founders still retain 20% of the control. By taking a huge percentage of the currency, the risk of 51% attacks is now even more feasible compared to allowing a more equitable distribution.
- Conflict of interest
- One of the most unfortunate things about Zcash is that the ownership structure overshadows its great performance. The project is owned by ZECC which is a US entity subject to the FinCEN and SEC rulings. Despite the widely celebrated param ceremony that involved destroying the seed parameters, there are many suspicions that the seed parameters could be reintroduced via the backdoor to issue new ZECs. This has been considered highly likely especially because the founders control 20% of the currency.
- A new investor in cryptocurrencies might want to know about the competition involved in Zcash. Since Bitcoin was launched, new cryptos have been joining the market at a very fast rate. Though Zcash has done well, some people argue that others are zeroing in and could easily take over. One of these contenders is Monero. Monero has become a formidable force with solid technology, significant market cap, and fast adoption rate. Others include Bitcoin Cash, Bitcoin Gold, and Ethereum.
- Risk of losing cryptocurrency due to hacking
- While no cases of hacking have been reported on the Zcash network, the risk still looms. The danger of getting hacked and losing the crypto assets is real. For example, when Ethereum was hacked before a fork that created Ethereum Classic, no one was anticipating. This calls for extra caution by keeping your altcoins in offline hardware wallets and not placing all the bets in the Zcash.
- Very high volatility
- Cryptocurrencies can experience rapid value growth and allow investors to make huge returns within a very short time; the reverse is also true. For example, when Zcash was launched, its price was twice that of Bitcoin, but it fell drastically within minutes of launching. Now that the value of Zcash has been increasing rapidly, the risk of falling rapidly still looms.
- The regulation
- Recently, governments have become uneasy about the emerging popularity of cryptocurrencies. Though the blockchain technology is considered an idea whose time has come, administrations are seeing a growing threat to economic stability. EU has warned its citizens to be extra cautious with ICOs while countries such as China and Japan have had to halt operations of some cryptos such as Bitcoin. As more administrations rush to implement new legislation, there is growing fear that fiat currencies could be favored to digital currencies such as Zcash.
- Risk of getting pooled together with scammers'
- As a completely anonymous cryptocurrency, many fraudsters and scammers are attracted to the Zcash network. This means that people using it can easily be linked to money generated through fraud or scams. Because you cannot follow the person making payment, it means that pirates, hackers, and drug dealers can use their ill-acquired cash to buy products from your store. If news of fraudsters hit the headlines, there is likely to be a backlash on the network as people shift to other networks.
What Happens if Zcash Gets Lost?
When you decide to get into cryptocurrencies, one of the things you must have is a digital wallet. Though one can opt to use the Zcash client as the main wallet, there are other options such as Coinomi, Trezor and Ledger Nano S that many people prefer today. The third party wallets are preferred because they can support multiple cryptocurrencies as opposed to the Zcash wallet that only allows transactions on its network.
The main role of cryptocurrency wallets is storing the private keys and public keys. These are special codes that are known only to you and the wallet. You must have these special codes when making any transaction on the Zcash network. While the wallet is expected to remain as secretive as possible, the risk of losing Zcash remains.
As a blockchain network, you must appreciate the fact that losing cryptocurrencies wallets is permanent. This issue is even more pronounced in the Zcash network because of its strict zero-knowledge proofs algorithm that enhances the privacy of all transactions. Here are some of the things that can result in loss of the Zcash wallet and all the ZECs stored in it.
- Sending crypto coins to the wrong address.
- Computer getting attacked by malware and all the stored information being damaged.
- Loss of the computer with the installed Zcash wallet.
- Formatting the computer and clearing all the apps installed in it.
- Someone else getting your private keys and using them to siphon all the ZECs in the wallet.
If Zcash gets lost, the chances of recovering it are very slim. Well, this is one of the key disadvantages of Zcash network as well as other cryptocurrencies in the market today. The best way to stay safe is securing the computer and installed apps. You can also use the following tips.
- Ensuring that the computer with the Zcash wallet is always updated and has the latest antivirus installed on it.
- Look for a Zcash wallet that stores the private keys offline to avoid the risk of intrusion.
- Consider maintaining several copies of the hardware wallets to safeguard the ZECs from cyber attacks.
- Only access Zcash from the computer that the cryptocurrency client and wallet are installed.
- Maintain several backups and updating them regularly. You could combine hardware and software backups.
The only method of restoring Zcash in case it gets lost is using a backup. This means that you must, at first, have backed up the private keys and public keys. For example, if you had backed up the Zcash client or hardware wallet, simply get another similar wallet and use the stored keys to reconcile the keys and sync with the network.
Since cryptocurrencies debuted about 10 years ago, the debate about their regulation has remained a hot-button issue. Many governments have been studying cryptocurrencies to understand them and come up with appropriate legislation. This means that Zcash and other cryptocurrencies remain legal.
Notably, most of the governments are trying to catch up with the fast unfolding blockchain technology, and it might take time before comprehensive legislation are installed. Despite this, Zcash has its internal regulations that guide operations such as the main system requirements.
Is Zcash Legal?
Zcash is legal. Up to now, Zcash is legal because there are no drawn regulations set out in law to regulate cryptocurrencies. The fast growth of cryptocurrency space has resulted to over 1100 cryptocurrencies today mainly because space is unregulated.
A lot of governments hold the view that cryptocurrencies are out to cripple them economically as people shift towards decentralized economies. Though most states allow Zcash and other cryptos to operate in their jurisdictions, there is great skepticism with some banning them altogether. Some have made possession, ICO, trading, and associated use of cryptocurrencies illegal.
Legality of Zcash in the US
In the US, The Federal Government has not established the legal framework to guide Zcash, and other cryptocurrencies even as interest from federal agencies continue to grow. This means that each state in the US is free to introduce its own regulations on cryptocurrencies. In 2015, New York fell short of passing cryptocurrency legislation on blockchain operations. The state agency ruling made it the first state to regulate virtual currency companies.
In 2017, about 8 states in the US have passed bills that seek to promote or accept blockchain technology. The most significant of these legislative developments about the blockchain operations are in the states of Vermont, Illinois, Arizona, and Delaware. These states recognize blockchain as evidence, smart contracts, and application in real estate records.
The blockchain technology edged closer to getting a nod when LedgerX, a cryptocurrency trading hardware wallet, was approved by the Futures Trading Commission. LedgerX is used as a Zcash wallet but can also be used for other cryptocurrencies such as Bitcoin and Ethereum.
Is Zcash legal in Europe?
In Europe, the approach to Zcash and blockchain technologies is more positive compared to the US. Europe is closely following the technology and is appreciating the innovativeness involved in creating and running blockchains. This can be seen in two ways;
- Commitment to comprehensive testing of the technologies.
- Assurance to traders that of the technology is okay, the applications will be approved and adopted by the market.
The approach has given morale to blockchain ecosystem designers by confirming that their work is being appreciated. The chances are that Europe could end up being the destination for blockchain development.
In February 2017, the EU government indicated it is working on legislation to support distributed ledger technology. This is in line with Zcash operational mode where users can opt for limited access and auditing of specific transactions for compliance to different authorities. In particular, the EU Commission wants to increase pilot projects on decentralized ecosystems to guide interactions between producers, consumers, and creators among other to extend the associated benefits.
One country where Zcash regulation has given the green light to Zcash and other cryptos is Switzerland. The blockchain development is being spearheaded by the Crypto Valley Association (a not for profit) that is crafting a code of conduct for ICO operations. This organization is working on the guidelines even as China banned ICOs in its jurisdictions.
Legality of Zcash globally
Internationally, blockchain technology is considered the best option for most startups. By May of 2016 over 200 startups were added to the block chain technology to raise funds according to the Outlier Ventures Research Team. Within no time, businesses can raise a lot of cash to run projects or even create new branches.
Blockchain technology is also providing businesses with a new way of holding transactions. As a fully anonymous blockchain network, Zcash has received a lot of support, and more entrepreneurs have a lot of faith in it. This has prompted some top companies such as JP Morgan to become part of this great network.
One of the Congressional resolutions suggested in the United States indicated that the blockchain technology, when coupled with appropriate regulation, has a lot of potential to change the way trust and securities are handled in online transactions. This could have numerous benefits for all the sectors including financial services, energy, intellectual property, healthcare, and real estate.
The thousands of pilot projects commissioned globally constitute a small drop in the ocean of blockchain technology. The globe is slowly learning and experiencing the advantages of blockchain technologies such as Zcash.
But, like others such as Bitcoin, Zcash legality is likely to get challenged in some countries such as China. Bitcoin has had a bumpy experience in some countries such as China where its exchange and ICO have been suspended or outlawed altogether. Zcash anticipates the same experience because it follows the same model of Bitcoin.
But many people have pointed that the current resistance of the blockchain technology by some administrations is an indication of authorities that are lagging behind. Most of them are forced to catch up to understand how the blockchain technology works and where it can be applied.
Until such a time when clear frameworks will be installed in most countries, Zcash remains legal. You should feel free to acquire Zcash and use it in different exchanges unless your current administration puts forward an order against it.
Zcash and Taxes
While most cryptocurrencies are seen to edge away from regulations, Zcash is different. Many people hold the view that since blockchain technologies are anonymous and untraceable, they can hide behind the technology and avoid meeting their tax obligations. This is one of the issues that have made a lot of governments to take cryptos with skepticism.
The Zcash network is laden with unique features such as cross-chain interoperability and selective disclosure. They make it more desirable and perhaps closest to meeting most financial regulations set by federal authorities. The payment disclosure feature is under the control of the respective Zcash user and is targeted at giving details of transactions to specific entities such as authorities for auditing purposes.
The selective disclosure feature means that people who are on Zcash can still demonstrate they are tax abiding by giving their compliance details to authorities. Whether you are a business and has been making sales online and paying the taxes appropriately, Zcash will leverage your books because all the transactions are already captured in a ledger. The Zcash miners are also required to pay 20% of their mining revenue to the Zcash founding team. This means that by the time the entire 21 million coins are mined from the Zcash network, the founders will hold 20%.
Does Zcash Have a Consumer Protection?
Even with its good record so far, Zcash is still considered a very young cryptocurrency. Most of the features and considerations are still in their initial phases before being subjected to comprehensive review after 2-3 years. Therefore, people are advised to only place what they are ready to lose. This brings the never-ending debate on consumer protection in the crypto world. How well are the users on the Zcash network protected?
Zcash launched the Zcash foundation with a pioneer endowment of 273,000 ZECs. The primary objective of the Zcash Foundation is to serve the bigger good of keeping the Zcash users fully protected. This means offering education, infrastructure, science, and consumer protection. It is considered the ultimate entity that will be left standing and carry on if something happens to the Zcash.
At the end of it, The Zcash Foundation will act as an inclusive governance structure that can be used by all to guide the entire Zcash ecosystem. The foundation is also considered a bridge of the Zcash to help and guide the upcoming legislation.
The Zcash team has indicated it can help the authorities understand and interpret the current findings in the cryptocurrency world. This is a great way to ensure that the upcoming legislation does not go against the anticipations of Zcash investors, miners, and other people on the blockchain.
However, even with these measures, investors are still encouraged to take great precaution as they enter the crypto-world space. The best thing is ensuring that the private keys are entirely protected, and the ZECs are stored offline. You should also maintain multiple backups for your ZECs.
Illegal Activities with Zcash
When the Zcash team started the long journey of creating a new cryptocurrency, the main driving force was taking the anonymity level of Bitcoin to another level. While this is a great thing because it makes Zcash a truly decentralized and anonymous blockchain, it also brings about the problem of association with illegal activities.
Because transactions are shielded completely, there is no way that a user can tell whether the ZECs are coming from a drug dealer, cyber criminal, or scammers. This means that it is a potential hiding point for illegal activities.
The ability to hide cash completely from the public eye serves as a magnet to criminals who want to avoid the law enforcement dragnet. It is thought that most of these illegal dealers are shifting to Zcash after Bitcoin became too exposed. In Bitcoin, the protection only utilizes pseudonyms and simple encryption that makes it easy to net people trying to avoid authorities for tax evasion, crime, and fraud.
In one of the main examples that demonstrate preference of Zcash by people deemed to be involved in illegal activities, Julius Assange now says that Wiki Leaks accepts Zcash donations. Assange has been living in asylum for years after his media organization, Wiki Leaks, was accused of spying private conversations between high government officials and making the cables public. By agreeing to receive donations in Zcash, it means that those making donations will not be identified and reprimanded for associating with an outlawed firm.
Cybercriminals are now shifting to Zcash after it turned out that Bitcoin is not after all as anonymous as expected. When the dangerous Ransomware strain hit Europe early in 2017, the criminals insisted they wanted to be paid in Bitcoin. There is a high probability that such criminals might prefer other highly encrypted and fully anonymous cryptocurrencies such as Zcash.
Is Zcash Secure?
Zcash is one of the most secure cryptocurrencies in the world today. When it was designed, the main focus was to create a completely anonymous cryptocurrency that users could use to make transactions without a trace. The security of Zcash is enhanced using three key things;
- Unique cryptography that shields transaction, recipient, and sender's details.
- A highly focused team that progressively works on updates to keep the network extra secure.
- It uses a special equihash algorithm that makes it difficult to mine in large scale and winning a 50+ stake of all coins in the network.
Is Zcash Anonymous?
Zcash is the most anonymous cryptocurrency that people know of today. Zooko Wilcox and his team that founded Zcash were mainly motivated by the need to provide additional privacy to the Bitcoin network.
Zcash uses zero-knowledge proof (zk-SNARKS) that allows transactions to be completed without revealing their details of the sender, recipient, or asset being transferred. Every transaction is accompanied by zk-SNARK that demonstrates the input asset exists and that the sender has the authority to it.
On the output (receiver’s side), a new zk-SNARK is created and attached using the recipient public key. It is only the recipient who can have this key. This means that when miners work on confirming the transactions on the Zcash network, they do not deal directly with the details of the sender, recipient, or the asset. Rather, the transactions are shielded so that even the recipients can never know the details of the sender.
If a store is part of the Zcash network and a client wants to pay some money in ZECs for a product, the deal is only limited to the transaction. This means that the client liked the product and paid it. Even if the seller wants to dig some info about the buyer, he cannot access it because everything is encrypted and shielded.
Because of Zcash emphasis on fungibility, its ability to shield transactions makes it possible to advance the ideals of a decentralized nature of distributed ledgers. More third parties coming to Zcash including top multinationals have pointed at the uniqueness of its anonymity. Note that even with this anonymity, Zcash still allows its users to make selective disclosure of their transactions for auditing or tax compliance purposes.
Has Zcash Ever Been Hacked?
Since Zcash was founded and launched late in 2016, no case of hacking has been reported in its network. But hacking is still unlikely at Zcash. A closer look at the Zcash team reveals that they are computing security zealots who took a lot of time studying other cryptocurrencies before perfecting their system.
In addition to being highly experienced in their work, the level of trust between the members is very high. They always seem to read from the same script in most of the decisions and do not leave any room for mistakes. From the pre-launch hype to funding without an ICO, many blockchain experts are arguing that a situation such as the one that precipitated the Ethereum fork is unlikely.
However, the fact that the entire Zcash team is so big has left some people casting doubt on how the cryptocurrency will survive the fast emerging competition. Just like Zcash was designed from Bitcoin, there are chances that some of the team members could easily compromise the security of the blockchain and result in hacking. However, this is just a speculation being based on observable trends.
To remain secure and minimize losses, it is advisable to avoid placing all the investment in one cryptocurrency such as Zcash no matter how attractive. Besides, you should ensure that the private keys and the wallets are fully secured to avoid getting hacked.
How Can I Restore Zcash?
Many people have been pointing at the risk of losing their investments should their Zcash be lost. First, it is important to point that what gets lost is the crypto wallet that contains private and public keys. These keys are the signatures that confirm you have the ZECs to spend before a transaction is completed.
If you ever lose a Zcash wallet, the chances are that it might be gone forever. However, you can still recover the Zcash if there was a backup. For example, if you had a Ledger Nano S wallet that had your ZECs, but it gets lost, you only need to get another one and restore the private and public keys from the backup. Then, sync the restoration with the Zcash blockchain and your ZECs will be restored.
Therefore, the first thing to do after acquiring a cryptocurrency wallet is backing it up. Some people are even acquiring multiple hardware wallets and putting a copy with the keys under lock and key in a secure place such as a bank.
Why Do People Trust Zcash?
Zcash is one of the fastest growing cryptocurrencies today. It has grown in both value and capitalization to the extent that many people see it as a future competitor to Bitcoin. Because of its unique operational model, many people have developed trust in the system and are buying ZECs as an investment. Here are the 6 key reasons why this trust keeps growing every day.
- The cryptocurrency is led by a highly experienced and enthusiastic team. Most of the cryptocurrency’s operational team members are expert in computing. This gives users the special great assurance that they are headed in the right direction.
- Up to date, there is no single case of hacking reported on the Zcash network. This is a demonstration of the extreme measures put in place to protect the users, the network, and stored crypto assets.
- The cryptocurrency is still young and growing rapidly. This means that people can see some benefits of acquiring ZECs today and selling later when the value goes up.
- The cryptocurrency provides very high levels of fungibility. More people are, therefore, sure they can trade with other crypto networks such as Ethereum from Zcash than from any other network known today.
- Zcash is the only blockchain that provides users with the option of remaining fully compliant to fiscal authorities while maintaining complete anonymity. This is achieved through Selective Disclosure feature. A store or an individual who uses Zcash regularly can use the feature to generate a report for tax returns or auditing compliance.
- Recently, a lot of big corporates have expressed interest in Zcash. One of these is JP Morgan bank. When such big companies opt to join a network, people believe that they have the legal and economic foresight to make the right decisions. This has made a lot of people to develop a lot trust in the Zcash network.
History of Zcash
The history of Zcash can be traced back to 2013 when a project referred as Zerocoin was started by a team of experts at The John Hopkins University Department of Computer Science in Baltimore. The main focus of the project was to address three biggest issue of lack of privacy in the Bitcoin network.
The Zerocoin team argued that though Bitcoin had seen widespread adoption, it had huge limitations about the privacy of transactions. The team was particularly concerned that the transactions’ login was public and users were only protected using pseudonyms that were easy to trace back to the real addresses.
With this specific focus, the Zerocoin team presented a white paper to add a new type of cryptography that could make the transactions completely secure. At this point, Zerocoin was created and started running as an Add-On on the Bitcoin network. This was achieved without introducing a completely new blockchain or elements to the Bitcoin network.
Further collaboration ensued in 2014 when the team at John Hopkins University and other teams from MIT, Tel Aviv, and The Technion came together to improve on Zerocoin. They worked together to enhance the efficiency and changed the name from Zerocoin to Zerocash. The new Zerocash allowed users to send direct payments with greater efficiency without revealing the details of the transactions or their identities.
In 2015, the big team of Zerocash teamed up with Least Authority by Zooko Wilcox that is believed to have contributed greatly to shifting from Zerocash to Zcash. It took the engineers about 1 year to finalize the details of the Zcash cryptocurrency and to lunch it at the end of 2016.
Today, Zcash has grown rapidly because of its association with Bitcoin, its high levels of anonymity, and advanced technology. Besides, its hashing algorithm makes it possible for people with standard computers to mine ZECs and prevent the situation where only the rich with the capability to acquire the expensive mining hardware can mine and own Zcash.
Who Created Zcash?
Though the common name associated with Zcash is Zooko Wilcox, the cryptocurrency resulted from work of very many experts. These include the original founders of Zerocoin who included Matthew Green, Ian Miers, Christina Garman, Aviel Rubin who were all from John Hopkins University. Others included Eli Ben-Sasson, Alessandro Chiesa, Eran Tromer, Christina Garman and Madars Virza from Technion, MIT, and Tel Aviv University.
To make the entire team that founded Zcash complete, Zooko Wilcox ensured they brought experts in blockchain technology especially those who had a lot of experience in cryptography. The expanded team that made founded Zcash and advanced it to reach where it is also included engineers Nathan Wilcox, Sean Bowe, Daira Hopwood, Taylor Hornby, Maureen Walsh along and Jack Grigg. The advisors who joined the new blockchain included Vitalik Buterin, Gavin Anderesen, Arthur Breitman, Andrew Miller and Joseph Bonnaeu.