ZCash (ZEC) Review 2022

ZCash is a cryptocurrency best known for its privacy features: you can hide some or all ZEC transaction details including sender, receiver, and the amount.

The coin operates since 2016 and is backed by a strong team of blockchain engineers and scientists from leading universities. What makes this privacy coin unique? How does the ZCash network manage to confirm transactions knowing nothing about the sender? Let’s find out.

About ZCash (ZEC)

ZCash is a digital currency that allows users to send private transactions at low fees. The idea behind ZEC was conceived in 2013 when a group of scientists from Johns Hopkins University proposed Zerocoin – an update that would enable private transactions in the Bitcoin network. After the proposal was rejected by the BTC community, scientists founded the Zerocoin Electric Coin Company (now Electric Coin Company) in 2015 and launched ZCash in 2016.

The idea of creating a privacy-protecting cryptocurrency emerged as it became clear: Bitcoin is unable to provide the degree of anonymity that some users need. To allow for private transactions, ZCash was the first cryptocurrency to implement zk-SNARKs – the cryptographic protocol that helps confirm a transaction without revealing its details.

There are two types of addresses in the ZCash network: public t-addresses and private z-addresses. The users have a choice to send public or private transactions using these addresses. The details of private transactions are not displayed in the blockchain, but their senders can disclose transaction details for audit or compliance.

Such flexibility in payment options is supposed to facilitate mass adoption of ZCash – the cryptocurrency aims to become accessible to 10 billion people by 2050. Currently, ZEC is the second-largest privacy coin after Monero and stands at the 51th position on CoinMarketCap.

ZCash (ZEC) Review 2022

ZCash (ZEC) Team

The initial idea of Zerocoin, a privacy extension to Bitcoin, was a brainchild of Matthew Green, Ian Miers, and Christina Garman – three leading scientists from Johns Hopkins University. Once their proposal was dismissed by Bitcoin developers, Green, Miers, and Garman recruited another four researchers and laid the ground for the scientific breakthroughs that shaped ZCash.

The ZCash community has grown from a small group of scientists to two independent organizations that manage ZEC and work on its code.

  • Electric Coin Co. is the organization that promotes ZCash development and crypto education for the masses. The company does not control ZEC and its distribution since it’s a decentralized cryptocurrency. The ECC team includes 28 devs, scientists, and educators based in Denver, Colorado.
  • Zcash Foundation is a public charitable organization that builds financial privacy infrastructure for ZCash. It participates in community management and ZEC governance, funds research and development, and distributes grants to software engineers. Zcash Foundation also promotes broader applications of zero knowledge proof technology.

ZCash (ZEC) Roadmap

In 2022, ZCash is focused on implementing the Network Upgrade 5 – the sixth major update for Zcash. The NU5 was activated on May 31 in accordance with the official schedule. The upgrade was supported by the Electric Coin Company and the Zcash Foundation.

NU5 aims to implement the latest advancements in the zk-SNARK technology stack and underlying cryptography. The most notable innovations include Unified Addresses and full support for the Orchard shielded protocol.

  • Unified Addresses will free ZCash from the complexity of address types: t- and z-addresses will merge into one. This will increase the usability of ZCash, improve interoperability between shielded-only and transparent-only ZEC apps, and facilitate network upgrades. It will become easier for developers to build on ZCash, so the users will soon access DeFi and Layer-2 features in the network.
  • Orchard shielded protocol will replace Sprout and Sapling – cryptographic tools that have powered zk-SNARKs in ZCash to date. Sprout and Sapling are incompatible with known efficient scaling solutions and have some potential vulnerabilities. Orchard will address these issues as the core element of the new Halo 2 zero-knowledge proving system of ZCash. It will “serve as a catalyst for Zcash user confidence and scalability” and will make ZEC faster and less expensive to build on.

ZCash (ZEC) Network

ZCash was built using the Bitcoin core code and allows sending partially or completely private transactions. Those are processed fast (ZEC block time is 75 seconds), and the fees are just 0.0001 ZCash, which is less than a US Cent.

Address and transaction types

There are two types of wallet addresses in the ZCash network:

  • Transparent, or t-addresses, are publicly viewable and allow for sending traceable transactions just like in the Bitcoin blockchain.
  • Private, or z-addresses (also referred to as shielded addresses), let users send ZCash with transaction details hidden from the public.

Since t- and z-addresses are interoperable, four types of transactions are possible in the ZCash blockchain:

  • T-to-T, or a transaction sent from t-address to another t-address: sender, recipient, and the amount are publicly visible in the blockchain.
  • T-to-Z: the sender is displayed, but the receiver (shielded address) is hidden. Here’s how this looks in the block explorer:
  • Z-to-T: the sender is not disclosed, while the recipient address is viewable.
  • Z-to-Z: a completely private transaction where neither the sender, nor the receiver and the transaction amount are shown to the public.

zcash how it works

Image source

To enable private transactions, ZCash leverages zk-SNARKs – a cryptographic protocol that allows one party (the prover) to convince another party (the verifier) that the statement is true without revealing any details about this statement – only information about the validity of the statement.

Before May 2022, this has been done through Sprout and Sapling shielded protocols that involve elliptic curves and a so-called private setup. To eliminate the need for the latter, strengthen the security of zk-SNARKs, and increase scalability, the Electric Coin Company team implemented a new Halo 2 proving system in ZCash as part of the latest NU5 major network upgrade.

Encrypted memo fields

Memo is a field where senders of shielded transactions can include some info for receivers. This can be the purpose of payment, instructions, and so on. Memo is fully encrypted and not publicly visible.

Selective payment details disclosure

Senders and receivers of private ZCash money transfers can disclose transaction details to 3rd parties for regulatory compliance or auditing. A recipient can reveal the list of transactions, their sums and memo fields, but not the senders’ addresses (though this feature will become available in the future).

How is ZCash different from Monero?

While Monero is private by default, ZCash lets users choose whether they want to send a public or a private transaction. It is assumed by the ZEC team that the availability of this choice will help ZCash gain adoption faster among individuals, merchants, and financial institutions.

How to Mine ZCash (ZEC)

ZCash is a Proof of Work cryptocurrency that you can mine solo or in a pool. Although ZEC could be mined using GPUs before, the ZCash team officially recommends using ASICs today.

ZEC runs on the Equihash mining algorithm. The coin was the first one to implement it; later, the algorithm was also adopted by Bitcoin Gold, Komodo, and other cryptocurrencies.

ZCash block time is 75 seconds, and the block reward is 3.125 ZEC since November 2020. The ZCash mining rewards halve just like Bitcoin’s, and the next halving is to occur in 2024.

If you want to assess the profitability of ZCash mining or learn how to start it, see the well-written official mining guide and Q&A.

ZCash (ZEC) Value Data

At the time of writing, ZCash is trading at $58.9 – the price has lost 79% since November 2021, which is consistent with the major bullish trend in the cryptocurrency market. The current circulating supply of ZCash is 15.1 million coins, and it increases by 3.125 ZEC with every newly mined block. Like in Bitcoin, the maximum supply of ZCash is 21 million coins, and it is predicted to be reached by nearly 2050.

The market cap of ZCash is $893 million, putting it in the 51st position of the CoinMarketCap’s list.

ZCash (ZEC) 2022 Price Prediction

Price prediction services are bullish on ZCash:

  • Wallet Investor considers ZEC a “very good” one-year investment and assumes the coin will cost $72 by September 2023.
  • CoinPriceForecasts predicts that the ZCash will hit $80 by the end of 2022, and the $100 mark will be crossed in 2024.
  • PricePrediction is even more positive and believes ZEC will grow to $88.7 in 2022.
  • DigitalCoinPrice assumes that the average price of ZCash in 2022 will be $76.2, and the maximum price will hit $80.7. According to the service, ZEC may surge to $93.55 in 2023.

How Can I Buy and Trade ZCash (ZEC)?

ZCash can be purchased on centralized exchanges like Binance, Coinbase, KuCoin, Kraken, and others. To trade on these platforms, you have to create an account and go through a mandatory KYC to unlock most features. To get ZCash instantly without registration, use ChangeNOW.

ZCash (ZEC) Wallets

If you’d like to store ZCash conveniently together with other coins in your portfolio, NOW Wallet will cater to your needs. This lightweight mobile wallet was designed for those who don’t seek compromises between security and usability: you are in full control over your private keys (no one but you can access them) and can manage your coins in a straightforward intuitive interface. A built-in crypto exchange, fiat-to-crypto purchases and withdrawals, Web3 options, NFTs, and staking are available. NOW Wallet allows you to store 450+ crypto coins including ZCash.

If you are a ZCash enthusiast, the official Zecwallet Lite will suit you. This wallet has been designed specifically for ZCash and supports all of its features such as t- and z-addresses, public and private transactions, and memos. The wallet is available for iOS, Android, and desktop. No doubt Zecwallet will be the first one to support new ZCash features such as unified addresses and the Orchard shielded protocol.

ZCash (ZEC) Crypto Exchanges

You can buy ZCash for 400+ crypto assets and 60+ fiat currencies on ChangeNOW. Start right away: no registration is required! The exchange process is completed in a few steps: simply select the currency you want to swap for ZCash, enter the amount, confirm, and deposit the displayed sum to an address provided. There is no upper limit for a transaction: you can buy or sell any amount of ZCash starting from around $2. The average swap time is 5 minutes.

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