Back in 2013, Zooko Wilcox started to worry about the privacy of Bitcoin transactions. Looking at the transactions from your wallet, anyone could learn about who you are dealing with and where the cryptocurrencies are being sent.
Originally, Wilcox named it Zerocoin and worked with founding scientists from John Hopkins for additional improvements on the zero knowledge proofs. They eventually partnered with researchers from MIT and Tel Aviv University and came up with a new protocol called Zerocash (later called Zcash) focusing on true privacy of user transactions in late 2016 followed by private funding of $2 Million.
What is ZEC?
Zcash is a privacy-protecting, digital currency built on strong science and cryptography. Under the hood, it is a decentralized blockchain which aims at providing enhanced privacy as compared to other blockchains by using ZEC.
Zcash uses zero knowledge cryptography called zk-SNARKS (zero-knowledge succinct non-interactive arguments of knowledge) which allows the user to leverage two addresses — one transparent and one fully private. This gives users the ability to either let their transactions be public or completely anonymous.
How do ZEC transactions work?
ZEC addresses are of two types as mentioned above, private (z-address) and transparent (t-address) while the transactions are of four types.
- Fully anonymous transactions
The transactions between two private addresses or Z-Z transactions are completely anonymous or private.
- Hidden sender Transactions
In this type of transaction, the sender address is hidden while the receiver address is public which is a Z-T transaction, also known as deshielding.
- Hidden receiver Transactions
The receiver address is private while the sender address is public, that is it is a T-Z transaction, which is known as shielding.
- Public Transactions
Transactions between two transparent addresses which are fully visible to the public, T-T transactions are called Public Transactions.
How to mine ZEC?
Zcash uses the proof-of-work mining algorithm called Equihash where miners compete with each other using their processing power to produce new blocks on Zcash blockchain. New blocks are produced every 75 seconds.
Zcash halving is estimated to happen in November 2020 when the total number of ZEC mined per block will decrease from 12.5 ZEC to 6.25 ZEC. The two methods used to mine Zcash are Pool mining and Solo Mining. Below, I’ll describe in detail how this works.
In Pool Mining, you mine along with other miners by sharing your computing power so as to increase your chances of mining a block. The miners then share the block rewards (50 ZEC coin per each block produced) depending on the computing power contributed to the pool in generating that particular block. You also have to pay pool mining fees. Some of the reputed ZEC mining pools include :
- ZEC Nanopool
Note: ChangeNOW does not endorse any pools and you are advised to do your own research before choosing any pool.
You can mine ZEC yourself without needing to depend on other miners, but you will have to bear the burden of buying expensive hardware and taking care of over the top electricity bills. Currently, due to the high hash rate of Zcash network, it is recommended that you start with pool mining if you are a beginner.
Equipment required for ZEC Mining
You will need mining hardware and software to get started but let us first understand the different types of hardware that are used to generate computational power for mining.
- CPU Mining
Simply using your computer’s CPU power to mine is called CPU Mining. This type of mining was very popular in the early days when there were not many miners on the network but more advanced hardware has replaced CPU Mining.
- GPU Mining
Using a computer’s graphic card(s) to mine is called GPU Mining. GPUs are generally used by gamers as they are known to process graphics quickly but have become a popular option among miners. Commonly used GPU miners are AMD and Nvidia.
- ASIC Mining
ASIC chips are preferred by advanced miners and can compute 100,000 times faster than CPU. ASIC Mining uses a microchip which is designed specifically to compute algorithms at the fastest speed possible. You need to have a proper cooling and ventilation system if you are going for ASIC mining considering the enormous heat produced by these insanely fast chips.
Once you have chosen the hardware, it’s time to install the right software.
For CPU mining, using the official Zcash software is the best way to go. For GPU mining, Optimer, Claymore, Nicehash are preferable software and you can find the user guides on Zcash forum. For ASIC mining, you can choose to buy chips from Bitmain or Innosilicon.
Key features of ZEC
- Efficient and usable
ZEC transactions are fast and very reliable. It is available on all major exchanges and supported by several wallets.
- Low fee transactions
ZEC transactions are very inexpensive with a fee of 0.001 ZEC which makes ZEC popular among merchants and for daily transactions.
- Audit- and regulation-friendly
Whether it is to comply with regulatory requirements or external audits, private addresses and transactions can be disclosed by Zcash users.
- Decentralized and attack-resistant
Zcash is decentralized and not controlled by a single authority. The network is global and run by thousands of users and devices.
- Private addresses & transactions
Privacy is the core value of Zcash and people use the network to send and receive Zcash coins anonymously without disclosing sender, receiver or even the amount transacted.
- Multisignature Transactions
Zcash supports transactions that may require two or more parties to agree mutually to the transaction before sending the funds.
Where to buy ZEC?
With a total supply of 21 Million ZEC, Zcash has constantly maintained to be in the top-30 list based on market cap. According to CoinMarketCap, ZEC ATH price was over close to 6000 USD in October 2016 while it is currently trading around 40 USD (1 ZEC to BTC is around 0.0055) which is a good price to buy.
Hundreds of merchants, stores, and organizations accept ZEC as a mode of payment, you can take a look at the full list here.
Zcash Price Chart
ZEC is available to buy and trade on most of the cryptocurrency exchanges. Below, we have compiled a list of the best exchanges to buy ZEC:
A guide on how to buy Zcash on ChangeNOW
Buy Zcash (ZEC) in 3 simple steps;
STEP 1 — SEND TO
- Choose whether you classic rate or fixed rate first
- Then choose the currency you want to send (let’s assume BTC) and enter the amount
- Enter the wallet address where you want to receive ZEC
STEP 2 — CONFIRMATION
- Make sure you are on the right website and cross-check all the details you have entered — how much BTC you are sending, how many ZEC you will receive, receiving wallet address and estimated arrival
- If all the details are correct, click on Confirm
STEP 3 — SENDING
- Send BTC to the address displayed by either copying it or scanning the QR code
- Enter your email to receive updates on your transaction
- Wait patiently until you receive ZEC to your wallet address
What is the best ZEC wallet?
There are several wallets where you can store ZEC. To understand this in a better way, let’s divide them into two categories:
- Wallets with both private and transparent address support
- ZecWallet FullNode — It is a Desktop Zcash wallet available for Mac, Linux and Windows users. The wallet not only allows you to run your own full node but also over Tor for a completely private experience.
3. ZecWallet Lite — This is also a Desktop wallet available for Linux, Mac and Windows users and is a lite version which syncs under a minute. They have an option to connect your desktop wallet to their android companion app to send and receive fully shielded transactions from your phone.
4. Shielded Guarda — An android only mobile app which allows you to send private transactions and exchange directly on your phone.
5. Wallets with only transparent address support:
- Ledger — Hardware wallet
- Trezor — Hardware wallet
- Trust Wallet — Mobile wallet
- Atomic wallet — Desktop and mobile wallet
- BitGo — Web wallet
- CoinBase — Mobile wallet
- Exodus — Mobile and desktop wallet
- Jaxx — Mobile wallet with a chrome extension
The future for ZEC looks bright in terms of adoption and price both with continuous development and the price is very low compared to it’s ATH. If you are looking for privacy then ZEC is the coin for you and ChangeNOW is the exchange that allows you to buy ZEC and several other cryptocurrencies without requiring any registration.
To learn more about ZEC price prediction, please visit the following Zcash post in our blog.