What is Zcash (ZEC) and how does it work
What is Zcash (ZEC) and how does it work
Zcash (ZEC) is a cryptocurrency launched in 2016. Zcash is a privacy-focused blockchain network and offers users the ability to keep their transactions completely private. It is characterized by the confidentiality of the sender, recipient and transaction amount.
Zcash's core technology is a technique called "zk-SNARKs" (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge). This technology allows two parties to confirm that a transaction has occurred, providing verification without revealing the details of the transaction. Thus, it provides a mathematically verifiable way to secure the network while the details of the transaction remain private.
The Zcash network provides a transition between both “transparent addresses” (public, just like Bitcoin) and private addresses called “hidden addresses”. While confidential addresses hide details of transactions such as sender, recipient, and transaction amount, transparent addresses are like traditional blockchain transactions.
Zcash offers a flexible structure to suit different use cases that require both privacy and openness. This allows users to adjust the privacy level according to their preferences.
Zcash's operating principles offer an innovative approach, ensuring user privacy and security while preserving the key features of a blockchain-based currency.
Some of the working principles and basic features of Zcash are:
1. **Privacy-Focused Approach**: Zcash adopts a privacy-focused approach by ensuring that users' identities, sender, recipient and transaction amount remain confidential. This provides users with greater privacy and anonymity when conducting their transactions.
2. **zk-SNARKs**: Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKs) is the core technological feature of Zcash. This technology is used to provide privacy in a mathematically verifiable way. When verifying that transactions have occurred, it is possible to verify these transactions without disclosing transaction details.
3. **Flexibility**: Zcash offers a structure suitable for different use cases that require both privacy and transparency. Users can adjust their privacy levels according to their preferences. This gives users flexibility in situations where payment transactions need to be completely private or transparent.
4. **Transparency Options**: The Zcash network also allows users to use transparent addresses like traditional blockchain transactions. This allows users to make their transactions transparent whenever they want.
5. **Mining and Reward Structure**: Zcash uses the Proof of Work (PoW) mining algorithm. Miners receive ZEC rewards for processing transactions and securing the network. Rewards are also given to "Proctors" who will analyze bulk data by revealing Zcash's private addresses.
Zcash has an important role in this field by focusing on privacy and anonymity issues in the cryptocurrency world. This makes it a preferable option when users demand more privacy.
Since Zcash uses a modified version of the Bitcoin code, it shares some features. Like Bitcoin, ZEC's total supply is limited to 21 million coins. New ZEC, Zcash mining or proof of work (PoW) consensus protocol.
Bitcoin is designed to be “pseudonymous” and not completely anonymous, as transaction and wallet address information is recorded on the Bitcoin blockchain and can be viewed by anyone. A greater anonymity solution with Zcash is an option for users to choose “shielded addresses” that are not visible on the Zcash blockchain. Alternatively, users can stick to explicitly recorded “transparent addresses”.
Another unique feature of the Zcash blockchain is the “Zcash ceremony” or “Zcash trust setup, which occurs when the blockchain is created and requires a trusted group to create a master public key for the blockchain.”
Once the installation was complete, the group needed to destroy the data related to the master key to protect Zcash from manipulation at later stages. Criticisms of this design stem from concerns that there is no evidence that the installation process was performed as expected or that sensitive information was destroyed.
