What Is Zcash (ZEC)?
Zcash, also known as Zerocash and ZEC, is a digital currency that is mostly known for its focus on privacy and anonymous transactions. It’s often compared to Bitcoin, highlighting the similarities between these two tokens, and the advantage of the ZEC transaction anonymity that Bitcoin doesn’t have.
Zcash transaction data is posted on a public blockchain. However, Zcash shielded protocol protects sensitive information about the transaction. This is achieved by employing the zk-SNARK technology. Though if you need to reveal the hidden information for auditing or any other reason, there’s also an option to do that by employing the transparent protocol.
Besides, note that the Zcash network is secured by the Proof-of-Work SHA-256 hash function, which is the same function that secures Bitcoin.
Just keep in mind that the Zcash price is pretty volatile, just like it usually is the case with most crypto assets. Thus, you should always check the ZEC price chart before purchasing the token.
The Story of Zcash
Zcash made its debut on October 28, 2016. It was initially based on the codebase of Bitcoin. The Zcash crypto project was founded by Zooko Wilcox-O'Hearn who is a computer security expert and an entrepreneur. Between 2013 and 2014, he also launched the Electric Coin Company and developed the Zerocoin protocol.
How Do Zcash Transactions Work?
As mentioned before, ZEC transactions can be either shielded or transparent.
The Zcash token transactions that are shielded employ the aforementioned zk-SNARK technology. This technology makes it possible for transactions to be sent across a public and immutable blockchain absolutely anonymously. The sending and receiving addresses as well as the amount sent are not visible publicly. However, the fact that the transaction took place is noted on the blockchain.
Besides, the Zcash protocol employs a cutting-edge cryptographic technique to validate the legitimacy of shielded transactions, since the payment information of such transactions is encrypted.
Considering the transparent ZEC transactions, they function similarly to Bitcoin transactions. They are transmitted among open addresses and recorded on an immutable public blockchain. The sender and recipient addresses, as well as the transaction's total amount, are all visible online.
Though the only identifiers a third party can access from the chain are public addresses, hence, transparent transactions do not explicitly reveal the identities of the users.
Tokenomics of Zcash Tokens
Zcash is a token that can be mined and that has a total supply of 21 million tokens. Sounds familiar? Yes, it’s just like Bitcoin.
When a new block is mined and integrated into the blockchain, a set number of ZEC tokens is produced. New ZEC coins are created in the form of block subsidies. As the total supply of Zcash coins gets closer to the limit of 21 million, the block subsidy is periodically cut in half to slow down the issuance rate. The Zcash tokens used to be divided into miner subsidies (80%) and founders' subsidies (20%).
The founders' subsidies were split among the founders of the Electric Coin Company (ECC) and the Zcash Foundation. The miner subsidy, on the other hand, is rewarded to the miner who mined the most recent block.
However, with the Zcash Canopy upgrade, the rewards to founders were eliminated and the portion that belonged to them was split among the Zcash Foundation (5%), the ECC (7%), and the Zcash Open Major Grants (8%).
Don't forget to check out the Zcash price chart to see the main tendencies in the ZEC price changes.