Zcash, oh Zcash. Talk About Hype!
In our previous articles we talked about Bitcoin and Ethereum, the two most used cryptocurrency. This time we will dive into Zcash, a new coin that has a lot of potential. What makes this coin so special and should you invest in it?
What is Zcash?
This has been a coin that’s been blowing up on everyone’s radar and we think that you should be just as excited about it. Released only in the last month, Zcash has seen a good amount of value and implementation across the board for one simple reason: Anonymity. Zcash is a truly untraceable coin (which as we’re sure you can surmise, has it’s ups and downs.) Whereas Bitcoin once touted itself as the untraceable currency of the internet, people smarter than you and I eventually figured out ways to trace it, which started a huge race towards developing a purely anonymous coin. It was revealed that the Bitcoin protocol stores any given sender’s Bitcoin wallet address, the recipient’s Bitcoin wallet address, and the amount of Bitcoin transferred from one account to the other. In multiple cases (most notably the story of Ross Ulbricht), authorities have been able to link together these points of data and create an analysis of financial activity and history that was otherwise hidden.
Let’s start with the most clear cut reason for why Zcash has the potential to blow up. Currently valued at exactly half the value of a Bitcoin (around $350), Zcash draws its main source of relevance from its promise of anonymity. Every coin currently on the market or used by any notable populus has some form of traceability. A pledge of anonymity means that the coin can be used by anyone, and will likely see an early adoption in the darknet. We’re talking everyone from drug dealers to government groups can find a value in the shroud offered. This has all been made possible through the cryptography breakthrough referred to as zk-SNARK, which is a zero knowledge proof. Essentially, this absurdly high level math enables the people operating the network to immediately realize Zcash transactions as legitimate while gathering virtually no private details about any particular transactions… save the time it was traded.
Now, whereas everything may seem rosy on the side of anonymity, Zcash hasn’t been met without criticisms. Zcash, in its anonymous state has an inherent flaw. Designed by a team of six public world class programmers, there is a master private key which could potentially allow for the creation of an unlimited amount of Zcash… and because it’s anonymous no one would ever know. An anonymous writer at Weuse.cash explained it as such:
“ZCash used a “multi party protocol” which means that, according to the team, as long as one of the participants in the generating process is honest and doesn’t keep a copy of his part of the master key, nobody else will be able to get access to the full “master private key” that is needed to create counterfeit coins. Only 6 people participated in the setup. This is a very small group and thus creates a theoretical possibility that these people were conspiring or were being coerced by a TLA to keep a copy of the “master private key”.
Another angle to consider that, as this is a truly anonymous engagement, there is a large incentive for government groups to attempt to influence the creation and implementation of the coin. Imagine that a government group infiltrated the hardware, software, or network early on and has now influenced the setup of the setup. There is a lot of value in a shadow group being able to anonymously produce an unlimited amount of money and these are concerns frequently discussed. Interestingly enough Zcash is also one of the only coins to ever come into existence with backing of an investment group which is being promised a return of 20% of all Zcash transactions. This is called a “Founders Tax.”
Despite the potential worries that having a small centralized and publicized team may bring about, we’re still behind Zcash all the way. We think that it has potential to help shape not only the Darknet, but the way that businesses do business. It may enable low level merchants to trade across borders anonymously but we see a future in large corporations using anonymous cryptocurrencies to accomplish functions such as protecting supply chain flow and data from competitors amongst many other applications.
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