Zcash Has Arrived!
New cryptocurrencies aren’t launched every day. And when they do launch, very rarely do they see the amount of attention Zcash has been getting.
Zcash is a form of digital currency, built from the spirit of Bitcoin, but different in a few fundamental ways.
First, Zcash is anonymous. For some, that may be a surprising statement, as the prevailing assumption is that Bitcoin enjoys the ability to keep its users anonymous. Not so. Bitcoin is pseudonymous, which means that transaction IDs are more of a pen name than an identity. Transactions are easily linked with one-another via public keys. Zcash is a bit different in that it uses something call zk-SNARKs to ensure a zero knowledge proof.
(sic) proofs that say computation over inputs have been performed without revealing all of the inputs. Zcash uses these proofs to verify transactions while protecting users’ privacy.
— z.cash blog
Second, Zcash is implementing a slow start for the earliest days of its block reward implementation. For cryptocurrencies like Bitcoin, miners are rewarded for creating blocks with a set amount of currency. This serves a double-purpose, as it’s a way to bring new money into circulation. When Bitcoin started, the block reward was highest. On the contrary, for Zcash, they chose to start with minimal block rewards, eventually getting up to 12.5 ZEC (the Zcash currency unit) after 20,000 blocks or approximately 34 days. Slow starting creates scarcity, which does good short-term things for the price of Zcash, but it also dissuades large mining operations from swooping in and controlling large parts of the network. It is yet to be proven if either of these things will really happen, but Zcash has certainly taken the time to think it through.
At the time of writing, 1 ZEC is worth 0.81 Bitcoin, or $581USD. Before launch, BitMex was selling 2-month futures contracts to the tune of 1.5 Bitcoin, which is basically a bet that 1 ZEC will be worth 1.5 Bitcoin by December 30th. Exchanges like Kraken and Poloniex have already launched Zcash support in the hope that at least short-term volume will bring in brisk business.
1 ZEC = 0.81 BTC (14:20 EST, 31/10/2016)
For all the hype and optimism surrounding Zcash, there is also a good measure of skepticism. Crypto-experts and competing parties argue that Zcash is too centralized to be able to claim its worth as an anonymous currency. Peter Black, co-founder of Monero, an alternate form of anonymous cryptocurrency, weighed in on Twitter:
There are 2 sides to each coin, and for all of the good things Zcash did to audit their security and plan for soft release, there are equally important criticisms as to the relevance of such a centralized method.
There’s a battle going on over the spirit of decentralization and the role it will play in the future of cryptocurrencies like Bitcoin, Etherium and now Zcash. Only as new technologies are introduced and interests with deep pockets start to pay attention will be truly know where things are headed.
Until then, take everything with a healthy pinch of salt continue to remain skeptical.
