Zcash: A Privacy-Focused Cryptocurrency
Zcash is a digital currency, similar to Bitcoin, but with a few fundamental differences. Zcash is a hard fork in the Bitcoin protocol; and, considering most of it came directly from Bitcoin’s code base, it has a lot of Bitcoin’s original features. However, the biggest difference between the two is that Zcash uses innovative modern encryption technology to conceal payments on the blockchain. In the words of the Zcash team, “if Bitcoin is like http for money, Zcash is https—a secure transport layer”.
Bitcoin’s underlying technology, Blockchain, was revolutionary. There is no doubt about that. However, Bitcoin’s Blockchain lacks privacy. Yes, Bitcoin is anonymous; but anonymity and privacy are two very different things. Bitcoin’s protocol simply allows users to remain nameless. Essentially, replacing their names with public-wallet addresses, a randomly generated string of 25-36 alphanumeric numbers. Each transaction recorded on the Bitcoin Blockchain contains two public wallet addresses (sender & receiver) and the amount being transacted. Therefore, once someone knows your wallet address it can be easily tracked, monitored and analyzed. As a result, the more you transact using Bitcoin, the more you are revealing about your history and your purchasing habits. That is unless you use a different address for every transaction, which would require a significant amount of effort, which is not a practical solution.
Zcash to the Rescue
Zcash managed to create a blockchain that offers privacy like never before. Zcash made it possible for transactions to be validated by a decentralized network and safely recorded on a blockchain without providing any information regarding the two parties and the amount involved. It does this by utilizing modern encryption technology in the form of the zk-SNARKs network and Zero-Knowledge-Proofs.
Zero-Knowledge Proofs are a scientific breakthrough in the field of cryptography allowing users to make transactions without revealing information regarding the sender, receiver, and amount of the transaction. This has come to be known as “shielding”. There are certain transactions that people might want to make public, for whatever reason. That is why Zcash allows for public transactions, as well. See picture on the right.
The largest bank in the United States, JPMorgan Chase, recently announced its partnership with the Zcash Company. Zcash will help integrate their shielding technology into JPMorgan Chase’s enterprise database, Quorum. This shows cryptocurrency is just one of the use cases for the technology behind Zcash. The legendary NSA-whistleblower, Edward Snowden, tweeted his support for Zcash stating “it is the most interesting alternative” to Bitcoin.
Core Purpose of Zcash
Zcash is on a mission to “create an open, global economic platform from which no-one can be excluded” (Zcash Mission). Zcash believes privacy is essential and necessary to conduct business and protect everyday consumers. “It’s an absolute show-stopper,” says founder, Zooko Wilcox. Their strong core human values drive their innovative company and technological advancements. Bitcoin may have been the first-mover, but Zcash is a fast-follower. Zcash was able to keep Bitcoin’s revolutionary features and simply add the missing piece, privacy. Creating a new-and-improved cryptocurrency that will allow users to transact not only securely, but privately.
I believe that Zcash, both the digital currency and the company as a whole, have the potential to change the world. To learn more about how you can diversify your retirement portfolio with Bitcoin and other cryptocurrencies, give one of our IRA specialists a call today at 877-936-7175.
Five Things to know about Zcash
- Zcash uses zk-SNARKs to keep their network secure – zk-SNARKs stands for Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge, or Proof of Construction (PoC), which is used to validate transactions on the decentralized network.
- Zcash uses Zero-Knowledge Proofs – a scientific breakthrough in the field of cryptography which allows us to prove something without revealing how it was proved. Magic.
- Edward Snowden supports Zcash – Snowden tweeted, Zcash’s “privacy tech makes it the most interesting Bitcoin alternative. Bitcoin is great, but ‘if it’s not private, it’s not safe.’”
- It has a Technology Partnership with JP Morgan Chase – Zcash is working with JP Morgan to help them integrate the encryption technology to their database, Quorum.
- Zcash has its own Foundation – The Zcash foundation is a non-profit organization created with the purpose of maintaining and improving the Zcash protocol for past, present and future users.