There are some problems in the world of cryptocurrency that may seem irrelevant at the moment but could pose a real threat in the future. You may often hear two keywords that are related to those problems – security and anonymity.
Sadly, many crypto projects do not pay a lot of attention to either of these things. It is not that they are unaware, but they have other issues to solve at the moment. Contrary to popular belief, Bitcoin is not an anonymous coin as well, and all the key data about the transactions made within its blockchain are there for everyone to see. However, there is a cryptocurrency that was specifically created to solve these Bitcoin issues, and it’s Zcash.
Read on to find out what features make the coin unique, and why crypto enthusiasts are still looking into the ways to buy Zcash nowadays.
Why does privacy matter?
We live in the age when one could acquire data about you in just a couple of clicks. It is a scary thought, especially considering the information about your financial transactions.
Let’s face it – the rise of cryptocurrencies is inevitable and it is just a matter of time when they take over the fiat. At that point, you do not want someone being able to track your transactions.
In other words, privacy and anonymity are small issues now, but they are growing and may become the number one threat to the crypto holders. This is what people who created Zcash had in mind.
The history of Zcash
Zcash was initially called Zerocoin and was created by a group of professionals, working at the Computer Science Department at Johns Hopkins University that is located in Baltimore, USA.
In their whitepaper, they specifically focused on what the state of cryptocurrencies was at that moment, addressing privacy as the main problem. They immediately offered the solution, which was at the time considered to be an add-on to Bitcoin, the “digital gold” of the modern age. They even stated that if enough users had accepted the add-on, it would have become an essential upgrade.
But things changed somewhere along the way, and other professionals in the industry liked the idea behind Zerocoin, offering their help to contribute to the project. Eventually, it emerged into an entirely new cryptocurrency named Zerocash and transitioned into Zcash after that.
How is security better with Zcash?
It is not easy to explain how Zcash manages to improve the level of security. With this crypto, there are no possible ways to see any information about the amount that is being transacted, the sender or the recipient. It is the most important part which makes it top the list of anonymous coins.
The developers tried to use something that we are already familiar with in order to explain the way it works. They compared Bitcoin to http and Zcash to https – the principle is more or less the same. In other words, Zcash uses the best of both worlds. They use all the technological advancements that blockchain has given and combine them with the good old security and anonymity that exists in the pre-blockchain systems.
The reason people immensely trust Zcash is due to their position that ‘nobody is above the law, not even the creators’. This cryptocurrency is made with an open-source protocol, which means that even the company that created it is itself unable to access the information regarding the transactions, recipients, and senders. That just means that the information about you is truly protected when you use Zcash.
The way the information is inaccessible is through their sophisticated and state-of-the-art encryption technology. They use a ‘zero-knowledge proof’ system called zk-SNARKs.
Will it solve the problem?
Another feature that gives Zcash an edge is that the users get to choose whether they want to hide the information or not. There are two types of transactions offered – shielded and transparent. The shielded transactions are the ones previously discussed, while the transparent ones are like regular Bitcoin transactions.
Why is this important? In the future, some of the governments may require that some of the transactions remain transparent. Japan has already put a stop to anonymous cryptos as the officials found out that many of the illegal activities are connected to using cryptos that provide anonymity.
But unlike other anonymous cryptos, such as Monero, Zcash has the option where the users can make their transactions transparent. It is a great decision since it means that it may not be banned from certain countries because the transactions can also be open.
Zcash is certainly going to solve problems related to the security of transactions. However, anonymity may not always be the best option, as it was the case in Japan, and it is left to particular governments to decide whether to allow anonymous transactions or not. Regardless of their final decision, Zcash can adapt to it.
A single unit of Zcash is worth $123 as of October, 3. Its peak price was a bit over $700 during January 2018 – the period when many of the other cryptos peaked. Compared to other cryptos, it is doing pretty well since it is somewhat new. It is currently located on the 21st place in the list of the most popular cryptos, and potentially, it can go up because of its extraordinary features.
As we all know, the world of cryptos is unstable and unpredictable. So, the next period is undoubtedly going to bring a great battle of cryptocurrencies that offer anonymity. Let’s see who is bound to win it!