Zcash Coin (ZEC) is a form of cryptocurrency that operates on the basic model provided by the first cryptocurrency having certain features that differ from Bitcoin. It uses the same decentralized blockchain network innovated by Satoshi Nakamoto for Bitcoin but it allows for the parties involved and the transactions that take place within it to be anonymous. In Bitcoin, all the transactions stored on the blockchain network are visible for everyone else on the network to see. That allows for the tracking of all transactions made by a particular Bitcoin address, giving a clear picture of the flow of currency with transparency. ZEC encrypts all that information.
Introduction to Zcash
Bitcoin uses a proof of work system to verify the transactions before adding them on to the blockchain network. ZEC uses a different method to secure its network, which is a proof of construction method also known as zk-snark. Their proof of construction method allows the maintainence of the blockchain network (ledger) without having to disclose the amounts of transactions and the parties involved in those transactions.
ZEC uses what are called zero knowledge proofs where a person making the transactions can spend ZEC and the values are able to balance and they haven’t been spent before. In Bitcoins, however, each full node keeps a balance of everything that is held within the unspent transactions output database. Each of the transactions has to be verified to unlock that particular output.
The ZEC also has a total supply of 21 million ZEC coins just like how the Bitcoin Blockchain network which will be issued over a period of 131 years. How it differs from Bitcoin is that ZEC will have blocks that’ll take about 2.5 minutes to process as compared to Bitcoin’s 10 minutes per block and rewards that are 4 times bigger which shall halve every 4 years.
ZEC Funding and Distribution
Instead of being set up as an open source community, ZEC is set up as a company which has sparked some controversy among the cryptocurrency ecosystem. A major difference ZEC has from the rest of the community. The other major difference is that they will have a reward system for the investors and employees in the company by taxing mining rewards called the ‘Founders reward’.
ZEC have already taken the money from investors to be able to create the currency before releasing it unlike the other cryptocurrencies. For every unit of ZEC mined during the first 4%, the company itself will get 20% which will eventually become 10% of the total supply.
Even though this is causing some concerns among the community but in actuality, it’s laying the basis though which the Zcash community will at large be successful in the longer run. The Digital Currency Group is one of their major investors. They own a majority percentage of all media outlets which are involved in the cryptocurrency ecosystem which has instigated some to even accuse of ZEC being motivated by corporate greed more than anything else.
There are mainly just speculations surrounding a controversial currency within the already controversy-drenched cryptocurrency realm. Time will tell how things play out and how much of an impact Zcash Coin will make in the cryptocurrency market.