Zcash is a cryptocurrency with a strong emphasis on privacy and identity protection. Zcash maintains the features of a public blockchain while enabling completely anonymous transactions.
Bitcoin Protocol
Zcash utilizes Bitcoin’s own protocol and while it is a separate cryptocurrency with own blockchain, the infrastructure is built on top of bitcoin’s core code. Additions to the underlying code that are specific to Zcash include updating the proof-of-work consensus model and introducing zero-knowledge proofs to enhance user privacy.
Genesis Block
Zcash’s genesis block was mined in October 2016, since then the cryptocurrency has aimed to provide enhanced privacy and security to its users. Zcash uses advanced cryptography, so-called zk-SNARKS or Zero-knowledge proofs, to shield transactions. It enables one party to prove to another that something is true, without revealing any information, apart from the fact that this specific statement is true.
The founder and CEO of the Zcash Company is Zooko Wilcox. The Company is described as "the creators and stewards of the Zcash currency." Notable advisors included Bitcoin developer Gavin Andresen, Ethereum founder Vitalik Buterin, and Tezos' Arthur Breitman. Roger Ver was also one of the Zcash Company's initial investors.
The Zcash Foundation, created in February 2017, is an independently operated 501(c)3 whose mission is "dedicated to building Internet payment and privacy infrastructure for the public good, primarily serving the users of the Zcash protocol and blockchain." Current foundation members include Andrew Miller, Peter Van Valkenburgh, Amber Baldet, Matthew Green, and Ian Miers. Green and Miers were both part of the original ZEC founding team.
The ZEC protocol leverages zk-SNARKs, or Zero-Knowledge Succinct Non-Interactive Argument of Knowledge, which are based on zero-knowledge proofs. The protocol uses zk-SNARKs for optional privacy elements. ZEC addresses beginning with a "t" are transparent, and addresses that start with a "z" include privacy enhancements and are referred to these as "shielded addresses." The issue with this system is that Moreover, when coins move from “unshielded” to “shielded” and back to “unshielded” addresses they may lose some of the anonymity they had, which is a big problem for a project that aims to be a top privacy pick.
ZEC also employs a fail-safe security system in place called The Ceremony to prevent the production of counterfeit coins. “The Ceremony” is a name of a process where multiple parties generate a parameter through a multi-party computation protocol. The protocol used has a feature that prevents the transaction from becoming compromised.In order for the transaction to fail, all participants would have to be dishonest or end up compromising themselves.
Zcash utilizes the Equihash proof-of-work algorithm. It was chosen for its efficient verification, which could be important for the future development of light clients. Equihash is a memory-oriented Proof-of-Work algorithm, which means mining is constrained by RAM.
As of May 2018, Zcash Equihash parameters have been implemented in ASICs. The emergence of ASICs has been the source of division in the Zcash community as ASICs centralize mining power in the hands of a few large corporate players because the equipment is expensive and not easily available for retail miners. Such centralization is very off-putting to small individual miners and many are forced to discontinue mining the coin. This led to a huge drop in the number of active accounts from around ~80,000 to ~20,000.
The ZEC protocol is based on Zerocoin, which was developed in 2013 and later turned into Zerocash, and a difficulty adjustment algorithm adopted from DigiShield v3. The ZEC cryptocurrency went live in 2016. Trading began in late October 2016. The ZEC blockchain currently targets a 2.5 minute block time and a block size limit of 2MB. The total supply is 21 million, with a current daily (chart below) and an annual inflation rate of 0.12% and 44% respectively. The ZEC inflation rate is one of the highest among any cryptocurrency. In contrast, Bitcoin's current annual inflation rate is 3.59%.
Hardware wallets are the safest way to store your Zcash and other cryptocurrencies. The main drawback (for now) is that they only support Zcash Transparent Addresses and that they're not free.
The two options, as always are the Ledger and Trezor. Both of these offer ZEC support.
ZEC Ledger Guide
As for using the Nano Ledger S, the first step towards setting up your device is unboxing your device and checking if you have received all the accessories with the device. Once you have unboxed your device, you need to configure it and initialize it before being able to use it.
The process is quite simple and will hardly take about 20-30 minutes, post which you will be set to use your Ledger Nano S device.
This video does a pretty good job of explaining how the setup works.
ZEC Trezor guide
As for Trezor, installing is really simple. To properly install it users should attach the unit to the computer. After that continue with installing the bridge which allows the Trezor to join with the computer.
The first step is to connect the Trezor to the device’s USB slot with the cable given in the box. After that, go to myTrezor.com and proceed with installing the browser extension. Trezor can also be used on Android or an iPhone, or on a Windows or Mac computer. Now, initiate the extension and myTrezor will direct you to pick a PIN.
After this, you will notice nine buttons but the numbers are hidden. After this, users should check the Trezor’s screen to recognize which numbers are in which place because it switches every time. Now set the PIN. Shortly after, Trezor should present a 24-word wallet “seed”. In short, one word at a time. Note down this seed and save it carefully. If your Trezor device malfunctions or is lost, you can utilize the seed to reconstruct the complete wallet.
This video explains how to set up your trezor quite well.
List of Desktop Wallets for Zcash (ZEC):
ZEC wallet
The official ZEC wallet can be used for Desktop.
This desktop GUI wallet is not for everyone, particularly not for those new to cryptocurrency or the world of tech. However, it could be a good choice for experienced users or anyone who wants to mine ZEC.
Built for Linux operating systems (though there are Windows and Mac options available from the Zcash community), it allows you to run the Zcash client and a full network node on your computer. The client allows you to send funds to private Zcash addresses, but it’s worth keeping in mind that you may need at least 2GB of RAM to generate a shielded transaction.
Jaxx
For more regular users that don't plan on mining, we have Jaxx.
What's really great about this wallet is that it doesn’t store the private keys on its servers but on the device of your choosing. Another reason to love Jaxx is cross-platform functionality. It is available on 9 different platforms and can be interlinked with all these platforms which means that the same balances and wallet is available when a different device is being used.
List of Online or Web Wallets for Zcash (ZEC):
Guarda
For an online wallet, we have Guarda.
Guarda offers a non-custodial wallet to its users. The wallet is available for desktop, mobile, web and a chrome extension is available as well. The company is registered in Estonia (Europe).
As a multi-currency wallet, Guarda supports a huge variety of assets (over 40 major blockchains and over 10,000 tokens at the moment). The development team managed to tame and integrate even extremely challenging coins like Monero, Verge and Zcash.
Guarda became one of the pioneers of ZEC Shielded technology by implementing ZEC's anonymous transactions in its open-source Android wallet.
How to buy Zcash (ZEC):
CoinSwtich
For credit card purchases, we have CoinSwitch.
CoinSwitch is a middleman service that finds the best possible exchange rate from a plethora of reputable cryptocurrency brokers and exchanges that offer credit card purchases.
Other than that, you can always go the route of buying ZEC with BTC, by first going trough Coinbase and then sending the BTC over to an exchange like Binance, Bittrex or Bitfinex and exchanging it for ZEC.
