The advent of Bitcoin has given rise to many cryptocurrencies commonly known as ‘altcoins’. Out of the set of altcoins that have come to light, Zcash is the latest one. The cryptocurrency was launched on 28th October with the first block mining on Friday. The launch was originally scheduled a month ago but due to technical reasons, the launch was delayed adding to all the hype. The currency is endorsed to provide high levels of privacy which has been the shortcoming of many altcoins and Bitcoin. Let’s look into what actually is making Zcash the new sensation:
How Zcash works:
Cryptographic experts and scientists holding positions at John Hopkins University, MIT and Tel Aviv University developed Zcash. Over the past four years, they have developed this algorithm which leaves zero knowledge proofs for any transaction. According to their white paper of the algorithm, the transaction hides the payment’s origin, destination and transferred amount. Major Blockchain based cryptocurrencies have public address which can be related to the users(Senders and Receivers). However, in Zcash for all the transactions, there is a hash (a random set of letters) in place of addresses hiding the identity of senders and receivers. Hence no amount, no addresses are shown thereby ensuring the privacy of the transaction.
The launch dynamics of the cryptocurrency were hysteric with speculations about the currency loading up. This was a delayed launch and press releases gave the currency much needed boost for its start. Within 40 minutes of trading, a high of 3,299 bitcoins to one Zcash (ZEC) was recorded. This high is equivalent to $2.3 million for each Zcash coin. Then the price fell steadily after that and finally settled below the price of Bitcoin. Zcash finally found support at $510 levels making it one of the most valuable cryptocurrency. It so far has around 3000 coins available in the market with no solid wallet system or networking system aiding the transfers. How Zcash would fare with building infrastructure would be an interesting journey to follow.
Zcash vs Bitcoin and Altcoins:
While the basic framework of all these cryptocurrencies is Blockchain, Zcash’s anonymity is certainly a unique selling point.
“Many such ‘altcoins’ are dubious affairs and don’t add much. But this one brings important innovations.”
– The Economist
Zcash has the same level of security as Bitcoin. But unlike bitcoin, the new currency continues the quest for one thing in the blockchain space: full and complete privacy. Although this was promised by Bitcoin, Monero, as well as tumblers and mixers the attempts went in vain. How practically executable and anonymous the protocol of Zcash would be seen with time.