Zcash: Stash or Trash? “If Bitcoin is http for money, then Zcash is https”

On August 9th, 2017, Zcash had a market cap at USD $467,656,057 for an equivalent of 140,914 BTC or 1,589,975 ETH with a circulating supply of 1,924,994 ZEC at a price of $242.94 per coin.

Zcash is gaining traction in the world of cryptocurrencies at a time when speculators have become decidedly more selective with their trading dollars. In the last week, in fact, Zcash passed long-established BitShares in becoming the #17 digital currency by market cap.

Right now traders are becoming investors in some cryptocurrencies. Why?

As the world quickly adopts cryptocurrencies, hedge funds go bananas over ICOs, and even the 5 o’clock news talks about the price of Bitcoin for the day, early adopters are positioning themselves in advance of the great spike expected to hit once grandma and grandpa understand that crypto is their key to retirement.

In the case of Zcash, in May JPMorgan Chase decided to integrate Zcash technology into its Enterprise Blockchain Platform:

“By adding the Zero-knowledge Security Layer into Quorum, we are able to explore how state of the art cryptographic privacy technology will enhance the next generation of financial services applications,” said JPMorgan executive director and blockchain center of excellence lead architect Suresh Shetty in a statement.

THAT’S why I’m interested in digging into Zcash.

I want to understand what makes Zcash interesting and what the future for Zcash holds. I hope to uncover answers through the Zcash website, forums, whitepapers, and any other relevant content that comes my way. Let’s get started!

“Zcash is the first open, permissionless cryptocurrency that can fully protect the privacy of transactions using zero-knowledge cryptography.”

  • If Bitcoin is like http for money, Zcash is https—a secure transport layer.
  • Zcash brings fungibility to cryptocurrency by unlinking shielded coins from their history on the blockchain.
  • Zcash is pioneering the use of zero-knowledge proofs, applying cutting-edge cryptography to blockchain technology. This new property will enable entire new classes of blockchain applications to be built.
  • Zcash: “We believe that personal privacy is necessary for core human values like dignity, intimacy, and morality.”
  • Every user of Zcash contributes to its decentralization, helping to protect it against failure and corruption.
  • Since Zcash is an open-source protocol, the Zerocoin Electric Coin Company (ZECC) does not control it (including controlling the mining or distribution of it) or have special access to private or shielded transactions.
  • The Zcash Foundation was launched in March of 2017 to guide the evolution of Zcash.
  • Zcash is a decentralized and open-source cryptocurrency that offers privacy and selective transparency of transactions.
  • Zcash is based on peer-reviewed cryptographic research, and built by a security-specialized engineering team on an open source platform based on Bitcoin Core’s battle-tested codebase. “Our improvement over Bitcoin is the addition of privacy.”
  • Zerocoin extends Bitcoin by creating two new transaction types: mint and spend. A mint transaction allows a user to exchange a quantity of bitcoins for the right to mint a new zerocoin.
  • Zcash encrypts the contents of shielded transactions. Since the payment information is encrypted, the protocol uses a novel cryptographic method to verify their validity.
  • Zcash uses a zero-knowledge proof construction called a zk-SNARK. These constructions allow the network to maintain a secure ledger of balances without disclosing the parties or amounts involved. Instead of publicly demonstrating spend-authority and transaction values, the transaction metadata is encrypted and zk-SNARKs are used to prove that nobody is cheating or stealing.
  • With the support for both shielded and transparent addresses, users can choose to send Zcash privately or publicly.
  • Zcash is the first widespread application of zk-SNARKs, a novel form of zero-knowledge cryptography. The strong privacy guarantee of Zcash is derived from the fact that shielded transactions in Zcash can be fully encrypted on the blockchain, yet still be verified as valid under the network’s consensus rules by using zk-SNARK proofs.
  • The acronym zk-SNARK stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.”
  • “To learn more about our parameter generation ceremony and see the precautions we’ve taken to prevent the secret randomness essential to Zcash from being exposed, visit our Paramgen page.”
  • Bitcoin tracks unspent transaction outputs (UTXOs) to determine what transactions are spendable. In Zcash, the shielded equivalent of a UTXO is called a “commitment”, and spending a commitment involves revealing a “nullifier”.
  • Zcash nodes keep lists of all the commitments that have been created, and all the nullifiers that have been revealed. Commitments and nullifiers are stored as hashes, to avoid disclosing any information about the commitments, or which nullifiers relate to which commitments.
  • The privacy of Zcash’s shielded transactions relies upon standard, tried-and-tested cryptography (hash functions and stream ciphers), but it’s the addition of zk-SNARKs, applied with the system of commitments and nullifiers, that allows senders and receivers of shielded transactions to prove that encrypted transactions are valid.
  • The fact that Zcash transactions can be stored on the blockchain fully encrypted opens up new possibilities for cryptocurrency applications.
  • The Zcash Company is at the forefront of the Internet Money revolution. “Fueled by scientific discovery and guided by love for humanity, we are aiming to create a global open economic fabric.”
  • Zcash’s zero-knowledge proofs rely on a set of public parameters which allow users to construct and verify private transactions.
  • Rather than a full-fledged anonymous currency, Zerocoin is a decentralized mix, where users may periodically “wash” their bitcoins via the Zerocoin protocol.
  • While Zerocoin constitutes a basic e-cash scheme, it lacks critical features required of full-fledged anonymous payments.
  • Zerocoin uses coins of fixed denomination: it does not support payments of exact values, nor does it provide a means to give change following a transaction (i.e., divide coins).
  • Zerocoin has no mechanism for one user to pay another one directly in “zerocoins”.
  • While Zerocoin provides anonymity by unlinking a payment transaction from its origin address, it does not hide the amount or other metadata about transactions occurring on the network.
  • Zcash introduces the notion of a decentralized anonymous payment scheme, which formally captures the functionality and security guarantees of a full-fledged decentralized electronic currency with strong anonymity guarantees.
  • Due to its substantially improved functionality and performance, Zerocash makes it possible to entirely replace traditional Bitcoin payments with anonymous alternatives.
  • Zerocash can be integrated into both Bitcoin and Bitcoin forks.
  • Zerocash can be deployed atop any ledger (even one maintained by a central bank).
  • By introducing new transaction types and payment semantics, Zerocash breaks compatibility with the Bitcoin network.
  • Zerocoins can then be transferred, split, and merged into other zerocoins.
  • The Zcash block chain launched on October 28, 2016, bringing into existence the first Zcash monetary units. This software release and the initial phase of the block chain was called ‘Sprout’ to emphasize a young, budding block chain with great potential to grow.
  • Zcash’s monetary base is the same as Bitcoin’s — 21 million Zcash currency units (ZEC, or ⓩ) and is mined over time.
  • What is the difference between Zerocoin, Zerocash, Zcash and ZEC? Zerocoin is a cryptographic currency protocol invented by Ian Miers, Christina Garman, Matthew Green, and Aviel D. Rubin in 2013. Zerocash is an improved cryptographic currency protocol invented by Eli Ben-Sasson, Alessandro Chiesa, Christina Garman, Matthew Green, Ian Miers, Eran Tromer, and Madars Virza in 2014. Zcash is an implementation of the Zerocash protocol, with certain improvements as described in our protocol specification (all of the scientists who designed the Zerocash protocol are members of the Zcash team). ZEC is three letter currency code for the Zcash currency.
  • Zcash does not: encrypt data for multisignature, protect against correlations made with public transactions (for example, when Zcash is traded to/from another cryptocurrency) or obfuscate IP addresses.
  • It is possible to Zcash in conjunction with an anonymizing network, such as Tor, in order to obtain protection against network eavesdropping which is complementary to transaction privacy.
  • “It should be noted that while Zcash facilitates anonymization for its users amongst a wide pool of individuals, we align more with the term ‘privacy’ to describe what Zcash technology aims to provide.”
  • Large quantum computers, if and when built, would be capable of breaking an encryption scheme used by Zcash.
  • New Zcash blocks are created roughly every 150 seconds (2.5 minutes).
  • The Zcash monetary supply curve mirrors Bitcoin’s, except that, because Zcash’s blocks are mined 4 times as frequently as Bitcoin’s, the number of ZEC created per Zcash block equal a quarter the number of BTC created per Bitcoin block.
  • Zcash maximum block size: 2MB
  • Whitepaper: Succinct Non-Interactive Zero Knowledge for a von Neumann Architecture
  • Whitepaper: Zerocash: Decentralized Anonymous Payments from Bitcoin
  • The primary markets for Zcash are:
    • Poloniex (currency pairing ZEC/BTC and also pairing ZEC/USDT)
    • Yunbi (currency pair ZEC/CNY)
    • Bitfinex (pair ZEC/USD and also pairing ZEC/BTC)
    • HitBTC (currency pair ZEC/BTC and also pairing ZEC/USD)
    • Bittrex (under currency pair ZEC/BTC)
  • The Twitter handle for Zcash is: ‎@zcashco
  • Market Cap history:
    • On October 29, 2016, the market cap for Zcash was $1,383,590.
    • On November 1st, 2016, the market cap for Zcash was $2,895,110.
    • Then, on November 2nd, 2016, the market cap for Zcash exploded to $3,701,650.
    • On November 9th, 2016, Zcash passed market cap $5,000,000.
    • On December 13th, 2016, Zcash passed market cap $10,000,000.
    • On January 5th, 2017, Zcash passed market cap $20,000,000.
    • On March 2nd, 2017, Zcash passed market cap $30,000,000.
    • From March 18th to March 19th, 2017, the market cap for Zcash went crazy and grew from $42,797,100 to $56,746,400.
    • On March 20th, 2017, the market cap for Zcash passed $60,000,000 for the first time.
    • On April 14th, 2017, the market cap for Zcash passed $70,000,000 for the first time.
    • On April 19th, 2017, the market cap for Zcash passed $80,000,000 for the first time.
    • On April 28th, 2017, the market cap for Zcash passed $90,000,000 for the first time.
    • On April 30th, 2017, the market cap for Zcash passed $100,000,000 for the first time.
    • On May 22th, 2017, the market cap for Zcash passed $160,000,000 for the first time, having blasted from $145,825,000 the previous day to $162,935,000.
    • Not to be outdone, on May 23rd, 2017, the market cap for Zcash stood at $277,175,000.
    • Then, on May 24th, 2017, the market cap for Zcash ended the day at $326,874,000.
    • On June 9th, 2017, the market cap for Zcash passed $400,000,000 for the first time.
    • From June 13th to June 14th, 2017, the market cap for Zcash grew from $470,678,000 to $558,715,000. #WOW.
    • The market cap for Zcash passed $600,000,000 for the first time on June 16th, 2017.
    • Sentiment for Zcash has eased somewhat since the June 16th high: on August 8th, the market cap stood closer to $400,000,000.
    • “Decentralized currencies should ensure a user’s privacy from his peers when conducting legitimate financial transactions. Zerocash provides such privacy protection, by hiding user identities, transaction amounts, and account balances from public view.”

“Our Mission is to make Zcash the premier platform for commerce — secure, borderless, and available equally to every person on our planet. We believe that Zcash can do for resource sharing and coordination what the Internet did for communication.”

Thanks for reading!

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