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Zcash is a cryptocurrency that offers enhanced privacy features. It is based on a public blockchain (similar to Bitcoin), but at the same time gives its users more control over which details of their transactions will be publicly accessible.
What is Zcash (ZEC)?

While Zcash gives its users an increased degree of privacy, it still retains all the security and transparency benefits of a public blockchain. This is made possible by using zero-knowledge proofs, advanced cryptographic protocols that facilitate private transactions on a public blockchain.


  • A privacy-focused cryptocurrency.
  • Based on Bitcoin’s public blockchain, adapted to include selective privacy features.
  • Enables users to optionally keep certain aspects of their transactions hidden if they wish.
  • Uses zero-knowledge proofs to ensure personal and transaction data remains confidential.
  • Developed by a team from a range of institutions, including MIT, Johns Hopkins and UC Berkeley.

Privacy on a public blockchain

In 2017, a team of engineers and scientists from a range of prestigious institutions including MIT, Johns Hopkins, Tel Aviv University and UC Berkeley, developed a protocol that would combine the benefits of a public decentralized blockchain network with enhanced privacy features. This protocol forms the foundation for Zcash and is now maintained and further developed under the supervision of a non-profit entity known as the Electric Coin Company.

Zcash is based on Bitcoin’s code and shares many of its core properties, such as its max supply of 21 million coins. Like Bitcoin, every Zcash transaction is published on a public blockchain, but unlike Bitcoin, Zcash gives its users the ability to optionally shield, or hide, some or all of the aspects concerning their transactions. This feature being optional makes Zcash more suited to fulfill various compliance requirements and makes it compatible with wallets and exchanges that don’t support private transactions.

Shielded and unshielded Zcash

One of the greatest advantages of Zcash compared to its closest privacy-oriented competitors is that shielding transactions is optional. In fact, unshielded Zcash transactions are completely transparent and no different from transactions of Bitcoin or Ethereum, for instance. Unshielded Zcash can therefore be traced through all the addresses it has passed through, all the way back to its origin in the block where it has been generated.

Users of Zcash can enjoy all the transparency benefits that come with posting transactions on a public blockchain network. Reputable exchanges go to great lengths to inspect the history of all Zcash that is deposited with them, conducting all manner of background checks, to make sure everything is in order.

The basis of privacy: Zero-knowledge proofs

The cryptographic protocol developed to enable private transactions on a public blockchain became known as zero-knowledge proof. Basically, zero-knowledge proofs allow you to prove that you know something without revealing what that something is. In the case of Zcash, zero-knowledge proofs make it possible to validate transactions without revealing the information on the sender, recipient or transaction amounts.

Zcash uses a particular type of zero-knowledge proof known as zK-SNARK. Whereas zero-knowledge proofs usually require interaction between the sender and recipient to confirm that a set of information is legitimate, zK-SNARK is non-interactive, requiring only a common reference string. In other words, validators are essentially able to confirm that the sender has transferred a particular amount of ZEC, and the recipient has received that amount, all without having to know their addresses (identities).

Zcash pursues compliance

Through its transparent use, Zcash has ensured to be in line with regulations, with its developers putting great effort into ticking all the compliance boxes. This has been done to great success, as research has shown that less than 0.2% of addresses on the dark web were Zcash addresses.

The Zcash development team’s long-term focus is further developing the protocol to realise the cryptocurrency’s potential, as they’re always looking for ways to improve the protocol and secure funds necessary for continuous development.

Zcash’s way of offering privacy as an optional feature seems to have been a welcome integration into the crypto ecosystem, as ZEC has found its place among the most popular cryptocurrencies.

Disclosure: Bitstamp is licensed to engage in virtual currency business activity by the New York State Department of Financial Services.

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