Zcash: advantages, dynamics, prospects

This cryptocurrency stands out from the crowd of altcoins in that its blockchain operates on the principle of zero-knowledge proof. After making a money transfer, Zcash encrypts information about the recipient’s and sender’s wallets, as well as the transaction amount. The data is completely hidden from third parties.

When Satoshi Nakamoto gave people the ability to exchange currency and digital messages through the blockchain in 2009, he (or she, or they) had to make all Bitcoin transactions public because people had no reason to trust each other. 

"He had to sacrifice privacy, all transactions are visible to absolutely everyone and are instantly distributed on the network. Any user can see the balance of another Bitcoin address. He tried to maintain some anonymity by advising people to constantly change Bitcoin wallets, but as practice shows, this is a rather unreliable protection," said Zooko Wilcox, founder of a cryptocurrency called Zcash. 

Over the past year, developers and crypto engineers have devoted a huge amount of time and resources to developing new, more reliable schemes to protect the privacy of users of blockchain technology.

“Blockchain is a distributed technology and this means that it does not have a single point of failure. For example, if Facebook crashes, you cannot log into Facebook, but if one node stops working, this does not mean that you cannot connect to the system, you will just connect to another node,” says Jack Gavigan, co-founder of Zcash. 

^{Zero Knowledge Proof}

Zero Knowledge Proof is a key feature of Zcash. 

This feature is the most noteworthy because it allows the user to provide proof of the transaction without revealing the contents of the data. Thanks to this feature of cryptographic verification of encrypted data, the sender and the transaction amount can be completely private. The authors of the study, who are currently developing the zero-knowledge proof function, believe that the main problem that needs to be solved at this stage of Zcash development is transaction speed. The calculations required for the function to work are too complex and take a whopping 48 seconds. 

However, this is not the only problem with this function. In order to translate it into the cryptocurrency Zcash, developers need to enter additional parameters into the system.. This process creates a private key that can be used to create fake coins if desired. This means that any potential user of Zcashmust trust that the private key has actually been destroyed. For many, this may become unacceptable, even with all the steps the development team has taken to solve this problem.

Hidden addresses

Bitcoin is originally designed so that the recipient must send sender's address. Hidden addresses reverse this process. Any user can create a new wallet and send funds to the recipient. Even though the address is new, the recipient will definitely have the corresponding key that will open the transaction. Transactions are published on the public chain, but the sender, recipient, and transaction amount are not visible to anyone. Payment information in the Zcash blockchain can be private or public - the user can regulate this, which is a distinctive feature of this altcoin. 

The Zcash protocol does not store data about which address the payment was sent from, which address of the recipient and, importantly, the amount itself - it only stores the event of the payment.

The basis for the creation of this digital currency was laid 3 years before its presentation, back in 2013. The development of Zсash was carried out by a whole team of cryptographers from the most famous universities in the world, and they still continue to cooperate with the company, and their work is paid with a percentage of the miners’ income. There is a widespread belief among users that this means of payment embodies all those characteristics that one would initially like to see in the first cryptocurrency - Bitcoin.

The official launch of Zcash took place on October 27, 2016. Among the project's investors are such well-known companies and individuals as Digital Currency Group, Pantera Capital, Fenbushi Capital, London Trust Media, Vlad Zamfir, Roger Ver, as well as many other representatives of the blockchain industry. 

The results of the audit of the Zcash source code from NCC Group and Coinspect were published on October 26.. According to the NCC Group report, 15 problems of varying risk levels were found in the protocol, but the auditors concluded that none of them could disrupt the stability and integrity of the blockchain or undermine the security of confidential transactions. The auditors primarily focused on developers using outdated versions of open source libraries for C++.

To install full-fledged Zcash mining software, your computer's operating system must be Linux and have at least 4GB of RAM.

The Zcash development team plans to make several updates. Information about this has been included in the cryptocurrency roadmap.

The first update, Overwinter, is scheduled for June 2018. According to the developers, it should protect users during further updates in the event that a management-related conflict occurs on the network. The announcement of Overwinter is devoid of details.

The second update will occur in September and will include the Sapling protocol, designed to improve the technical characteristics of Zcash transactions.

“Sapling will activate an update to the Sapling protocol, improving the time and memory characteristics of secure transactions by an order of magnitude, which in turn will allow the implementation of support for a mobile wallet,” the developers write.

Today, Zcash ranks 20th in the list of cryptocurrencies by capitalization volume ($986,071,351), its rate is $256 per coin.

Over the past six months, this cryptocurrency has not pleased us with any special achievements. On the contrary, thanks to its reputation as the most anonymous of all existing ones, came not only under the close attention of Europol, but also under delisting of large exchange platforms.

Read also: Edward Snowden noted your preference and respect for Zcash.

According to https://www.americanbanker.com