Zcash is a cryptocurrency based on Zerocoin protocol and aims to provide more secure and enhanced privacy for its users.
Short Intro
Cryptocurrency started its journey with a view to making the movement of currency easier and more secure.
Bitcoin was leading the line, followed by other cryptos that were equipped with more advanced technologies. For example, Monero and Dash were created only for better security advantages or to give more security-oriented currency to the users. But with the release of Zcash, the security or privacy of the users went to the top because here users can remain anonymous, which can provide even safer use of cryptocurrencies.
Zcash advantages
In Zcash, users can totally hide their identity through a zero-knowledge proof construction called zk-SNARKs. Zooko Wilcox, the founder of Zcash and Zerocoin, created a protocol between 2013 and 2014 in which bitcoin can be converted into zerocoin. In this way, the total transaction process was kept secret. Then the developers, with the help of cryptographers from different universities, created Zerocash which provides much better privacy than zerocoin which is known as Zcash. A high level of anonymity was established, which gives us greater fungibility, i.e., exchangeability.
Bitcoin users have already faced problems regarding blacklisting coins. But Zcash does not have these problems.
But above all, Zcash is extremely experimental, which means it is relatively weak. Bitcoin core developer Peter Todd described Zcash as completely broken. He also mentioned the possibility of evil minds using fake zk-SNARK proofs.
Disadvantages
Besides, it also has a centralized foundation and development team, which is the major drawback of the cryptocurrency. As all the transactions involve zero knowledge transfers, they should not be controlled by a single foundation. If the private keys were destroyed in a ceremony known as a multi-party communication protocol, there is still a chance of someone creating counterfeit currency if they somehow get the private key. This will make it vulnerable to the attackers, as they will be able to produce an unlimited amount of Zcash.
While Zcash is far cheaper than bitcoin, it uses similar market functions. Again, mining zcash is also much easier, as it would allow customers to buy miners for the sake of mining Zcash.
Besides its unique mining model, the major difference is that 10% of the 21 million units mined using zerocash protocol, which is called the founder’s reward, will go to Zcash’s stakeholders.
Another important difference is that it has a slow start mechanism, which would manage the risk of the protocol having a major bug or security vulnerability. There is also a massive price fluctuation in Zcash. For example, on the first day of its release, its price reached 3300 BTC but again fell quickly to 48 BTC on the same day.
Though we talked about different drawbacks in our above discussion, it has a simple yet easy payment procedure. It is still largely untested, and it needs to adopt modern currency platforms. And its price volatility can bring a ton of profit for the traders who might invest.
In-Short
If you want a secured and anonymous ID and want to make a profit, Zcash might be the best digital currency for you.
