What is Zcash (ZEC)?

Zcash — a peer-to-peer payment system with a high unit of account. Let’s find out how it works!

Who created Zcash and when?

• Creators: Matthew Green, Ian Miers, Christina Garman, Abel Rubin, Eli Ben-Sasson, Alessandro Chiesa, Madars Virza, Eran Tromer (developers of the basic protocols of the coin: Zerocoin and Zerocash).
• The development is carried out by the commercial organization Electric Coin Company. Its executive director is cypherpunk and cybersecurity specialist Zooko Wilcox-O’Hearn.
• Project announcement date: January 20, 2016.
• Launch date: October 28, 2016.

What is the core technology of Zcash?

Zcash is based on the Zerocash protocol, which uses the zk-SNARK (zero-knowledge Succinct Non-interactive Argument of Knowledge) technology, a zero-knowledge proof that uses simple and clear non-interactive arguments of knowledge.

Zero-knowledge proof is a cryptographic protocol that allows one party (the prover) to prove the truth of a statement to another party (the verifier) without revealing any additional information about that other party (neither the content nor the source from which the prover learned about veracity).

The definition was first proposed by researchers at the Massachusetts Institute of Technology (MIT) Shafi Goldwasser, Silvio Micali and Charles Rakoff in the scientific article “The knowledge complexity of interactive proof-systems”(1985).

What are the key features and capabilities of Zcash?

• Transactions
  Transactions with low fee (0.0001 Zcash).
• Addresses and transaction privacy

The protocol contains two types of addresses:

• Transparent ‘t’ addresses
• Private ‘z’ addresses

ZEC can be sent between “t” addresses and “z” addresses, but only transactions between “z” addresses and “z” addresses are completely private.
There are 4 types of transactions in the ZCash network:

• Private: z-address -> z-address
• Public: t-аddress -> t-address
• Shielding: t-address -> z-аddress
• Dashielding: z-address -> t-address

Encrypted memo fields (fields for notes)
The memo field is available for secure transactions, which allows the sender to include information that is relevant to the recipient in a fully encrypted form.

View keys
Protected address holders may disclose transaction details for audit and compliance purposes. The owner of the address can reveal all incoming transactions and the content of the memo field.

Multisignature transactions
Zcash supports multi-signature transactions: the transfer of funds requires the approval of two or more parties. Multisig transactions cannot be used with z-addresses.

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What is the process of Zcash tokens mining?

• Zcash mining uses the Equihash algorithm.
• During the Blossom update, the speed of generating new blocks was doubled (75 seconds instead of the previous 150 seconds). The developers, however, have reduced the reward to 6.25 ZEC.
• The entire 21 million ZEC coins will be mined around 2050.

How is the Zcash project funded?

The project financing model differs from the “fair launch”, premine and ICO.

Zcash developers receive a “founders award”: in the first four years, miners receive 80% of the mined coins and the team — 20%. The Zcash Foundation, a non-profit organization that invests in the project’s development, receives a portion of the “founders’ award.”

How is the Zcash project evolving?

The Zcash developer Electric Coin Company (ECC) plans to make radical changes to the architecture of this cryptocurrency. According to the project’s creators, the Zcash network will be able to process millions of transactions per second and will be able to serve 10 billion people by 2050. This may necessitate the use of a new type of blockchain that supports sharding technology. It will have to be built from the ground up. Efforts will also be required to ensure that the ZEC coin is transferred to the new chain without losing value.

Developers hope that the new blockchain will help them solve another major issue with Zcash: the insufficient use of private transactions (their share today does not exceed 2 percent of the total). In principle, the new Zcash blockchain may be incompatible with transparent transactions.

In January 2020, the Zcash user community decided on a new scheme for distributing rewards for mining on the network through a vote.

According to the decision, miners will continue to receive 80%, coin developer Electric Coin Company will receive 7%, and the organization Zcash Foundation will receive 5%. The remaining 8% will be allocated to grants to third-party developers. If the Zcash Foundation and Electric Coin Company approve the changes, the new remuneration distribution structure will be implemented in November 2020.