Zcash Brings More Privacy Than Bitcoin
Bitcoin is decentralized, fast, cheap, safe and ... public. This fact makes crypto fans to look at other options. One of these options could be Zcash.
Bitcoin is decentralized, fast, cheap, safe and ... public. Those are the very simplified characteristics of the technology changing the world since its birth in 2009. All network transactions are what is called ‘pseudonymous’, meaning even if it's not all that easy to assign particular identities to a sender or recipient, all other transactional data is easy to find with one click. Indeed, anonymity can be maintained by using various tools, but the protocol does not directly include this feature.
It is exactly this fact, in conjunction with the increased efforts by state regulators to try to regulate Bitcoin and bind it to their fanciful ideas, that has been inciting more and more crypto fans to look at other options. One of these options could be Zcash. ‘What is it?’, you might ask, ‘another one of a several hundreds of altcoins?’ Yes. In short, it's a Bitcoin variation with a high level of privacy - the former Zerocash or Zerocoin.
Zooko Wilcox, founder of Zcash, gives reason for its development:
"Privacy is about consent. You have the right to choose which of your movements, words, and actions will be shared or published. You have the right to choose whether every detail of your life will be recorded and analyzed, by acquaintances, neighbors, family, employers, faceless organizations, or massive supercomputers."
"We believe that privacy strengthens social ties and social institutions, protects societies against their enemies, and helps societies to be more peaceful and more prosperous. A robust tradition of privacy is a common feature in rich and peaceful societies, and a lack of privacy is often found in struggling and failing societies," he continues.
The enemies of anonymity often claim that an anonymous environment is an environment suited for criminals. Zokoo and his team have a simple answer to that:
"Yes, but bad guys will use anything. Bad guys use cars, bad guys use the Internet, bad guys use cash, and bad guys use the current banking system. Rather than trying to invent something that bad guys won't use, our purpose is to invent something that can empower and uplift the billions of good people on this planet."
In spite of the fact that the technology development of Zcash is backed by Zcash Electric Coin Company, no part of it is closed. On the contrary, everything runs on a completely open-source system. The total money supply will be limited and when the end number of 21 million is reached, supply will cease. This follows the same model as Bitcoin. However, Zcash’s redistribution model is different. 10% of the total amount will be distributed between founders, investors, employees and advisors. The company believes this step will help to motivate the founders to support Zcash long-term with limited possibility for "pump and dump" action, as is the case for many other altcoins.
The founders agreed to give 1% of the total number to the non-profit Zcash Foundation. The foundation should secure the maintaining and development of protocols and software. "I hope that having a well-funded non-profit foundation dedicated to serving the interests of all Zcash users will avoid some of the uncertainties which are currently rending our beloved Bitcoin community," Zooko says.
One of the major differences between Zcash and Bitcoin, as mentioned above, is the level of privacy. While addresses and the value of transfers are accessible to the public, Zcash encrypts this data by default, and only the person who created the transaction can make the data public for chosen third-parties.
Another distinction is the way in which miners and full nodes confirm transaction validity. The algorithm is called "zero-knowledge proofs." Briefly described, the creator of the transaction includes proof of its validity, i.e. that it is not a double spend, without revealing those encrypted items. Zokoo's estimate is that the first real block could be expected in July of this year. He wants mining to be accessible to as many people as possible and is therefore trying to enable its use in mobile devices too.
Steve Waterhouse, general partner of Pantera Capital, one of the investors who invested one million dollars in total, said about Zcash:
"Bitcoin is HTTP for money. Zcash is HTTPS."
However, Zcash is not the only alternative to Bitcoin promising preservation of user privacy. For example, Monero and Dash have been winning favour in the crypto-community for some time. Zcash, even though it is still currently in the testing phase, seems like it could become the leader in this part of the crypto-market, given the resounding support from investors and the generally warm reactions from the community. Of course, it goes without saying, that Zcash’s creation is going to bring about new worries for those attempting to regulate the arguable unregulatable cryptocurrency market.