What is Zcash (ZEC)?
Zcash is a peer-to-peer payment system with a unit of the same name.
Who created Zcash and when?
- Creators: cryptographers Matthew Green, Jan Myers, Christina Garman, Abel Rubin, Eli Ben-Sasson, Alessandro Chiesa, Madars Virza, Eran Tromer (developers of the basic coin protocols: Zerocoin and Zerocash).
- Electric Coin Company, a commercial organization, is the developer, with Zuko Wilcox-O’Hearn, a cyber-security specialist and cipherpunk, as executive director.
- Project announcement date: January 20, 2016.
- Launch date: October 28, 2016.
What is the underlying Zcash technology?
Zcash is based on the Zerocash protocol, which uses zk-SNARK (zero-knowledge Succinct Non-interactive ARgument of Knowledge) technology – a zero-disclosure proof that uses simple and clear non-interactive knowledge arguments.
Zero-disclosure proof is a cryptographic protocol that allows one party (the proving party) to confirm the truth of a claim to another party (the verifier) without revealing any additional information about that other party in the process (neither the content nor the source from which the proving party learned the truth).
This definition was first proposed by MIT researchers Shafi Goldwasser, Silvio Micali, and Charles Rakoff in a scientific paper entitled “Evidence Complexity in Interactive Systems” (1985).
What are the key features and capabilities of Zcash?
Transactions with low commissions (0.0001 Zcash).
- Addresses and transaction privacy
The protocol contains two types of addresses: transparent “t”-addresses and private “z”-addresses.
ZEC can be forwarded between “t”-addresses and “z”-addresses, but only transactions between “z”-addresses and “z”-addresses are fully private. There are 4 types of transactions
in the ZCash
Public: t-address -> t-address
Protected: t-address -> z-address
Demasked: z-address -> t-address
Private: z-address -> z-address
- Encrypted memo fields (fields for notes)
The memo field is available for secure transactions, allowing the sender to include information relevant to the recipient in a fully encrypted form.
- Viewing Keys
Secure address owners can disclose transaction details for auditing and regulatory compliance checks. The address owner can disclose all incoming transactions and memo field content.
- Transactions with multi-signatures
Zcash supports multi-signature transactions: two or more parties must be approved to transfer funds. Multisignature transactions cannot be used with z-addresses.
How are Zcash tokens mined?
- Zcash mining uses the Equihash algorithm.
- The Blossom update doubled the speed of generating new blocks (75 seconds instead of the previous 150 seconds). At the same time, the developers reduced the size of the reward to 6.25 ZEC.
- The entire 21 million ZEC coins will be mined by about 2050.
How is the Zcash project funded?
The funding model of the project is different from the “fair start”, pre-mine and ICO.
Zcash developers receive a “founder’s reward”: in the first four years, miners receive 80% of the coins mined, while the team receives 20%. Part of the “founders award” goes to the non-profit organization Zcash Foundation, which spends money on the development of the project.
How is the Zcash project developing?
Zcash developer Electric Coin Company (ECC) intends to make radical changes to the architecture of this cryptocurrency. The creators of the project plan that the Zcash network will be able to process millions of transactions per second and will be able to serve 10 billion people by 2050. This may require a transition to a new type of blockchain that supports sharding technology. It will need to be built from the ground up. It will also require effort to ensure that the ZEC coin is moved to the new chain in a way that it does not lose in value.
With the new blockchain, developers hope to solve another big problem of Zcash – too little use of private transactions (their share today does not exceed 2% of the total number). It is possible that the new Zcash blockchain will be incompatible with transparent transactions in principle.
In January 2020, the Zcash user community voted on a new scheme for distributing rewards for mining on the network.
According to the decision, miners will continue to receive 80%, the Electric Coin Company, the developer of the coin, will receive 7%, and the Zcash Foundation will receive 5%. The remaining 8% will be given to grants to third-party developers. The new fee structure will be implemented in November 2020 if the Zcash Foundation and Electric Coin Company approve the changes.