Cryptocurrency Zcash (ZEC) - what it is and why is it needed in simple words
The privacy of transactions is one of the reasons for the popularity of cryptocurrencies and the widespread adoption of blockchain technology . But in reality, not all digital money is completely confidential. So, through the blockchain, you can track transactions in the Bitcoin network by calculating the wallet address of the alleged sender and recipient, and the amount of the transfer is known initially. This jeopardizes the competition of cryptocurrencies with standard bank payment systems.
Well-known entrepreneur and crypto investor Steve Waterhouse once gave a good example: if Bitcoin is the http data transfer protocol for the financial world, then Zcash is the https protocol (a protocol with encryption support for increased security). Most crypto enthusiasts agreed with the apt analogy - Zcash is traditionally considered the first fully private, secure cryptocurrency. To understand what Zcash is , lets plunge into the history and principle of operation of this digital currency, having examined in detail its advantages and disadvantages.
What is Zcash (ZEC)
Zcash (ZEC) is the worlds first open-source confidential blockchain-based cryptocurrency, as well as a payment system of the same name. Developed by Zerocoin Electric Coin Company in 2016. The coin of the same name with the unofficial trade symbol ZEC is used as a means of payment. The Zcash platform provides complete confidentiality of the exchange of coins within the network or transparency at the choice of the parties. In this case, transactions are recorded in a common block chain, but the sender, recipient and the transfer amount are unknown to the rest of the network participants.
Unlike other pseudonymous digital assets, Zcash uses zero-knowledge proof-based cryptographic techniques. This allows you to verify the mathematical reliability of the translation, but does not provide any information about the second participant in the exchange. In addition, the cryptocurrency uses special transaction block headers, zk-SNARK protocol, notes, JoinSplit descriptions, etc.
A team of scientists from renowned world universities worked on the creation of Zcash: MIT, Tel Aviv University, Technion, University of California Berkeley, etc. In this regard, the internal structure of the coin is thought out to the smallest detail and mathematically substantiated. The protocol for the technical implementation of Zcash can be called a real scientific work, which is a breakthrough along with Bitcoin (you can read about this cryptocurrency here ) and Ethereum (information about this cryptocurrency here ). At the same time, the cryptocurrency borrowed many of the successful developments of Bitcoin, Zerocoin and other digital assets. The minimum transmitted denomination of a cryptocurrency is 10 to minus 8 degrees from the ZEC and is called "zatoshi" - by analogy with a similar denomination in Bitcoin.
The privacy of the Zcash network has been appreciated by many eminent investors, developers and cryptographers. WikiLeaks has donated to the ZEC to keep things safe, and cybersecurity expert Edward Snowden has called cryptocurrency the most successful replacement for BTC. Due to its privacy, Zcash is often used in black markets on the Internet - in a 2017 circulation, Europol even expressed concerns about the popularity of cryptocurrency.
Also, ZEC is often called the new digital gold, by analogy with Bitcoin. Steve Waterhouse, Roger Ver, London Trust media and other investors note the investment attractiveness of the project. Starting at $ 40-50, at the peak of popularity in January 2018, the cost of the cryptocurrency reached $ 600-700 per coin. Many experts predict Zcash will rise to $ 10,000 after the coins rebranding and overall market recovery in 2019.
History of cryptocurrency
The history of Zcash as the first private digital currency requires a story about the origin of the technology itself. Zcash owes its origin to the ZeroCash cryptographic protocol. The method was developed by Professor Matthew Green and his graduate students Christina Garman and Ian Myers of Johns Hopkins University in Maryland. Initially, the project was meant as an addition to the Bitcoin protocol. Therefore, in May 2013, the paper "Zerocoin: Anonymous Distributed E-Cash from Bitcoin" was presented at a scientific symposium in San Francisco. Later, the protocol was implemented as an alpha version for the existing Bitcoin network.
In January 2014, it was announced that Zerocoin would appear as a separate project based on the first cryptocurrency blockchain. But later, the team failed to agree with the Bitcoin developers about granting permission to work with the working protocol. The community of miners and users of the Bitcoin network that had already formed at that time prevented. At the same time, it was not possible to create an addition to BTC - this required the expansion of already existing developments.
On January 20, 2016, the creation of a new cryptocurrency Zcash was announced. The developers assured that it would become an ideological continuation of ZeroCash and an attempt to implement the protocol in isolation from Bitcoin. On September 28, the release of the Zcoin coin took place - a cryptocurrency that had a semblance of a concept of confirmations with a zero level of knowledge. At the same time, the rest of the points: notes, keys and addresses, the transaction protocol, were poorly developed. The coin has not gained the same popularity as the completely confidential Zcash.
Exactly one month later, on October 28, 2016, the Zcash cryptocurrency based on the ZeroCash protocol officially appeared. At the conference, timed to the opening of the project, the developers spoke in detail about the principles of transactions in the network and provided data on the zk-SNARK cipher. The crypto ceremony drew a lot of attention to the coin, causing the ZEC to briefly hit $ 4,000, according to CoinMarketCap. After balancing supply and demand, the value of the digital asset took its normal state - 40-50 USD per coin.
Due to its outstanding technical qualities, in April 17th, Zcash hit the TOP-10 digital assets in terms of capitalization - a direct reflection of the popularity of cryptocurrency. The first serious surge in capitalization and market value of the coin occurred in May of the same year, when the developers entered into a partnership agreement with the American financial holding JPMorgan. This resulted in a price increase of 84% from the previous rate.
The peak of market capitalization was reached against the backdrop of the general popularity of the cryptocurrency market at the beginning of the 18th year. The figure equated to over 2.5 billion USD. At the same time, the price for one coin reached 600-700 US dollars. After the recession of the excitement, the rate bounced back and leveled off to the previous values. Today (for 2019) the cost of ZEC is 60-70 USD, and the capitalization index does not exceed 800 million dollars. Now the currency is ranked 25th in the ranking of the best digital assets, and is included in the TOP-30 of the most significant coins.
Despite its unpopularity and the emergence of new competitors, ZEC remains one of the most investment-attractive digital currencies. Investors highly appreciate the possibility of private exchange of coins and the high speed of transactions - a block is created in an average of 2.5 minutes (faster than Bitcoin). At the same time, a team of qualified scientists, mathematicians and cryptographers of the Zcash Foundation is engaged in the development and maintenance of the currency. In this regard, Zcash has tremendous trust among netizens, especially compared to such dubious projects as BCH, Monero , etc.
Distinctive features of ZEC from other cryptocurrencies
To see how Zcash differs from other digital assets, it is necessary to make a comparison with one of the coins. Easier and more convenient to compare with Bitcoin - ZEC is built on the ZeroCash protocol, which was supposed to be an addition to the existing BTC network.
Like Bitcoin, cryptocurrency has a limited emission limit of 21 million coins. Due to the confidentiality of the currency, it is difficult to know how much Zcash is issued in total. As of 2019, experts believe that about 7.1 million ZEC have been put into circulation. Proof-of-Work is used as a release method - new coins are added to the miner every time he calculates a new block. Today the block reward is 12.5 ZEC, but the amount will decrease every 4 years. By October 2020, the cost of the reward for entering a block into the chain will be 6.25 coins. At the same time, together with the PoW method, a zero-resolution proof protocol was implemented, when one statement is checked dozens of times to prove the probable reliability.
In this case, the reward for the miner consists of several amounts: the reward for the miner himself and part of the reward for the founders. Thus, the creators of Zcash plan to receive funds for the development of the project. Until 2020, the percentage of founders awards is 10% of the total number of ZECs. Maintaining the current course, the total value of the Founders Award will be approximately USD 147 million. The distribution structure of the coins is as follows:
- 75% goes to Zcash Foundation employees and company advisors;
- 65% - guaranteed income for investors and depositors;
- 44% will go to non-commercial expenses of the organization;
- 19% - the amount intended for the strategic reserve Zcash.
The complexity of the PoW method does not prevent the block from being created once every 2.5 minutes - 10 times faster than Bitcoin. At the same time, the block of a transaction in the network weighs 2 MB. This kind of solution to the BTC scalability problem was tested for strength in January 2018 - the ZEC trading volume when translated into dollars was approximately 300 million. Zcash coped well with the load, in contrast to the "big brother", whose network transactions took place within 2 days.
The main difference between the cryptocurrency is the zk-SNARK protocol, ZeroCash and the unique structure of blocks and transactions in the data chain. zk-SNARK ( Zero-Knowledge Succinct Non-Interactive Argument of Knowledge ) is a cryptographic method of verifying transactions for authenticity. Works on a zero-resolution proof basis, coding some of the consensus rules on the web. As a result, a secure data register is formed without disclosing information about the parties and the amount of transactions. The protocol also forms another feature of Zcash: a transaction from a protected address to an open one discloses information about the transfer amount, and a transaction from an open address to a secure address maintains complete confidentiality. This encourages the use of internal ZEC exchanges.
The modified operating principle of the blockchain is formed through the use of notes with transmission traps, as well as tuples for ZEC transmission. A sequence of blocks creates a tree, and each block is linked to the previous one using the hashPrevBlock header. In this way, the validity of the blockchain is checked, and the longest sequence that satisfies the consensus is considered true.
Also, the Zcash system has the following technical features:
- JoinSplit description . This is the piece of data in a transaction that describes the value to be passed. This is one of the key parameters of zk-SNARK, designed to validate transactions on the network. The descriptive part helps to quickly calculate the block of transactions, being a kind of "title" of the exchange procedure.
- Zeroing function . It protects the tree from the known double spend problem and is found in the JoinSplit description. The main parameter here is a nullifier - a unique identifier for the transaction. Nullifier should not be repeated in the course of one transaction, nor in the rest of the blockchain.
- Transfer note tree . It is a merkla tree with specified values, designed to store notes (tuples) in JoinSplit descriptions. Allows faster processing of a block of transactions. The structure is similar to the UTXO function of Bitcoin, but it does not protect against double spending.
Zcash has unique technologies that solve serious mathematical problems. The structure of the cryptocurrency is much more complex than the principle of the Bitcoin network, although it is largely based on the blockchain of the first cryptocurrency. Verifying the authenticity of a transaction is a tricky mathematical trick that creates non-deterministic but probable proof. But the decentralized cryptocurrency network, consisting of millions of users, allows you to quickly and efficiently increase the probability of proof.
How Zcash works
The ZeroCash protocol and the non-interactive zk-SNARK arguments are just the tip of the iceberg for Zcash. To represent the work of cryptocurrency, it is necessary to delve into the basics of the mechanism of functioning of digital cash - blockchain.
Blockchain is a decentralized distributed database. It is presented as a continuous sequence of blocks, or chains. Blocks are small information units up to 2 MB, in which transactions are recorded. In turn, a transaction is a ZEC exchange procedure between users, which can be expressed in the form of data.
Continuity is based on the fact that each block in the chain has a link to the previous block, which points to its parent block, and so on ad infinitum. At the same time, transactions within the block also have such links, which are also lined up in a short chain and refer to the highest authority - the block header. Thus, it is impossible to forge a block or transaction without affecting the entire block chain. This protects the Zcash system from intruders and fraudsters.
If a block cannot be forged, then you can try to pretend to be the one who creates this block - a miner. But here, too, the cryptocurrency system provides for protection - a decentralized proof of Proof-of-Work performed by miners. Miners are independent network users with sufficient computing power. They confirm the authenticity of the transaction: the real belonging of ZEC to the previous owner, record the fact of transfer of a certain amount to the new owner in the block. There are many miners, and they check the validity of the block independently of each other. Thus, in order to legally forge a block, it would be necessary to have the computing power of 51% of all Zcash miners - today this is an indicator of 5-7 power plants. This theoretical network hack is called a 51% attack.
The first cryptocurrency Bitcoin, which was originally positioned as a confidential payment system, has a similar structure. In fact, theoretically, the sender and recipient of BTC in the system can be tracked - their addresses, transaction number and amount are published openly in the general network, but personal data are not indicated. This property of the Bitcoin network is called pseudonymity. Zcash was created to provide users with complete privacy. In essence, Zcash is what real confidential Bitcoin was supposed to look like.
To ensure the confidentiality of transactions, the Zcash protocol uses zero knowledge proof. This is a cryptographic method that allows one of the parties to a ZEC transaction to verify the validity of that transaction without having any information about the other party. The tricky part is proving that one party has a private key without revealing any information about that party. For a protocol to function, it must have three criteria:
- completeness - the proof must be carried out regardless of the specified accuracy;
- correctness - if the statement is incorrect, then no one can convince the verifier of the validity of the statement;
- zero knowledge - if the statement is true, then no one will be able to know anything, except for the fact of reliability.
In a mathematical sense, the operation of the protocol does not seek to prove a statement, but seeks to minimize the likelihood of mistaking an incorrect statement as true. In the course of the protocol operation, the approval is accredited. It consists of three phases:
- Alice sends proof to Bob;
- Bob asks Alice a question;
- Alice answers Bobs question by proving the validity of the proof.
In other words, Alice must choose some element that will become her secret, or private key. Based on this key, Alice computes and publishes the public key. The private key defines a set of questions that Alice can answer correctly. Then Alice again chooses a random element, deduces a proof from it according to a certain algorithm and sends it to Bob. After that, Bob randomly chooses one of the many questions and asks Alice. She sends a response to Bob, on the basis of which he can determine whether Alice really has the correct private key (secret). The accreditation can be repeated many times until the chance of Alice guessing the answer by chance is minimized.
Thus, users of the Zcash network using miners confirm the authenticity of the transaction and send ZEC to each other, while not disclosing information about each other. Such proofs weigh no more than 300 bytes, so they are computed in milliseconds. However, zk-SNARKs requires a large blockchain database (about 1.5 GB), so the operation can take up to 1-2 minutes to complete.
Zcash advantages and disadvantages
For 2019, the average ZEC trading volume in 24 hours is $ 150-200 million. Such significant popularity has come to cryptocurrency due to the reliability of the system and the confidentiality of transactions with digital currency. Zcash is often referred to as "digital gold" instead of Bitcoin - it seems that the cryptocurrency is created the way Bitcoin was originally intended to be. Among the most significant advantages of Zcash, users note the following:
- Confidentiality . Complete confidentiality of transactions is a unique property of the payment system at ZeroCash. Many cryptocurrencies guarantee privacy to their users, but in reality they turn out to be pseudonymous. Even more titles do not have built-in encryption at all and are created by amateurs for amateurs. Zcash is a breakthrough in the confidential payments industry, allowing you to process them quickly and almost free.
- The impossibility of creating compromising evidence on the user . During the ZEC exchange, users do not disclose each others personal data. Moreover, during the exchange, it is impossible even theoretically to calculate the addresses of zcash wallets. In a modern banking system, when every clients action is controlled by the regulator, Zcash creates a convenient payment system that does not store data about its users.
- Network reliability . Decentralized blockchain creates a more reliable financial solution than all modern banking payment systems. Every year, fraudsters and criminals find hundreds of loopholes in ATM algorithms, Internet banking, etc. As a result, people lose their savings, and the responsibility remains with unknown hackers. In the Zcash network, each user is responsible, on whose computer a copy of the blockchain sequence is stored. Hacking such a system is extremely unlikely and requires huge resources to execute.
- Use of evidence-based protocols. The ZeroCash protocol is the result of the work of several dozen mathematicians, cryptographers, and Computer Science specialists. The methods used to create the project are no worse than those used in serious scientific works. The appeal to authority is not an argument, but the creators of Zcash guarantee the stable and safe operation of the system with their own reputation in the scientific community. When creating, the developers were pursued by scientific interest and the desire to benefit humanity, and not by the thirst for income.
- Fast transactions . One transaction takes from 1 to 2 minutes, and block creation is fixed and takes no more than 150 seconds. As a result, the transaction is carried out 4 times faster than in the Bitcoin network (not taking into account the loaded mempool) and 30 seconds faster than in the international SWIFT transfer system. This makes Zcash not only a competitor to the first cryptocurrency, but also modern non-confidential bank transfers that take up to 15 minutes.
- Convenient shopping . When exchanging BTC for ZEC, it is impossible to track the recipient information. This allows you to remain confidential even when logging into the Zcash network. At the same time, there are many online wallets and services accredited by the Zcash Foundation for storing and exchanging cryptocurrency. The original client program requires storing a blockchain of no more than 10 GB in size, which cannot be compared to the official BTC wallet weighing about 200 GB.
- Interchangeability . There is no difference between ZEC coins, regardless of how they were obtained and previous history of use. The value is influenced only by the denomination of the coins and the aggregate supply and demand in the market. This entitles the owner of the coins to receive for one ZEC as much as the second owner of the other ZEC will receive at a single point in time. In this case, funds will not be added to the "black list", as happens with bitcoins on exchanges.
Any monetary and financial model implies certain disadvantages relative to another, unlike it. It is important to weigh the pros and cons of using a particular instrument before investing or transferring cash to another currency. Zcash has the following disadvantages:
- Trade is illegal. Due to the complete confidentiality of transactions, coins are often used for trading on the darknet. Criminals purchase drugs, pornographic materials and even weapons with ZEC. In October 2017, European police have already expressed concerns about the increasing popularity of cryptocurrency and its use for money laundering and the purchase of illegal substances. Also, coins can be used for the illegal export of large amounts of money.
- Possible centralization . The advent of mining ASICs has been a huge blow to the decentralization of many cryptocurrencies. In January 2019, a team of researchers discovered that over 50% of the power of Zcash mining farms belongs to 3 confidential addresses. Users suspect that processor manufacturer Bitmain is behind them. A 51% attack can be a serious blow to Zcash, concentrating the block reward in the hands of one person or a group of people in cahoots.
- Long transactions. Due to the complex encryption protocol, the average processing time for one transfer takes about 2 minutes when the network is congested. The verification of the validity of the evidence is carried out with the utmost care to ensure that the ZEC is not transferred improperly. Unfortunately, this is reflected in the waiting time for the exchange. The creators of Zcash claim that they are already working on an external solution that will speed up transactions on the network.
- Low cost of coins . The average cost of a ZEC does not exceed $ 80, even with the good news agenda. This makes the cryptocurrency unpopular, even for projects without encryption. Investors are not eager to invest in Zcash due to its weak popularity, although they highly appreciate the technology of confidential transfers itself.
- Unprofitable mining. Mining profitability indicators today are 0.11 USD per day for 1 kH / s. Such weak performance has appeared with the arrival of ASIC miners, which are ideal for mining ZEC. This has killed the competition in the market and reduced the earning opportunities for people who do not use ultra-high capacity.
- Lack of brand . The creators of the Zcash Foundation do not work with the marketing attractiveness of the project, but exclusively educate users. Unfortunately, not all crypto enthusiasts can appreciate the value of the technology, which is why ordinary users are more likely to invest in more profitable and expensive coins.
The cryptocurrency has great prospects for the future. At the end of 2018, a successful official network hard fork took place, which made adjustments to the operation of protocols and increased the efficiency of transactions. Despite the shortcomings and unpopularity, users are waiting for new solutions from the founders of Zcash. Zk-SNARK technology is of great importance not only for the project, but for the entire cryptocurrency industry as a whole.
Does Zcash mining exist?
The main algorithm for continuing the chain of blocks in the Zcash network is Proof-of-Work (from the English. Proof of work ). This means that to create a new element in the blockchain, you need to spend some computing power. This process is called mining.
Mining (from the English mining ) is the process of processing a transaction, for which the system pays a reward. The first miner to complete the computation of transactions and create a block will receive a reward of 12.5 ZEC. The more power a miner uses, the more likely it is to receive a reward. Therefore, over time, users began to create mining farms - a computer consisting of several CPUs or GPUs and special software.
With the advent of ASICs, the situation in Zcash mining has changed. ASICs are specifically designed for mining Bitcoin-based cryptocurrencies. These are powerful processors that cannot be compared to conventional CPUs or video cards. With the growing popularity of ASIC mining, it became more and more difficult to mine coins alone. Therefore, users began to unite into mining pools - communities where the capacity of a thousand mining farms was implemented as one miner account. As a result, the likelihood of receiving a reward increased, and earnings were distributed among the pool participants, depending on their contribution to the process.
When mining, it is important to take your pool selection seriously. Evaluate server locations, commission (1% standard, less is better), minimum payout and login conditions. Among the best are:
- Flypool is a confidential 60 mH / s instant payout pool located in the US, China and Europe;
- 2Miners - 1.5% collection for solo mining, there is a server in Russia, as well as a fair payment system depending on the network capacity;
- kratos.biz - a mining pool from Italy, specializing in ZEC and having one of the lowest commissions of 0.9%;
- Poolin.com - the most powerful ZEC pool with servers in the US and China, takes a commission of 1.5% of the reward amount, but finds blocks more often.
Zcash uses Equihash mining algorithm. The development team is confident that in the long term, the algorithm will be able to avoid the excessive influence of ASIC miners. Today, using one ASIC Antminer S17, the income for mining ZEC will be about 14 USD per day. It turns out that the payback for mining coins is 14-13 months - not the worst indicator for a cryptocurrency from the TOP-25.
How to buy or sell Zcash?
Before buying a coin, you must create your own wallet. The wallet will give you the address where your ZEC coins will be stored. In this case, the program or service must meet all encryption and security parameters.
To create a wallet, go to the official z.cash website. You can select a language on the site - up to 90% of all content will be translated into Russian, if you select the appropriate option. Hover the mouse over the "Getting Started" section, a drop-down list appears, in which we need to select the "Wallets" item. A page with all recommended wallets that support ZEC will open.
There are 4 variations of the wallet:
- web version;
- mobile phone application;
- PC program to be downloaded;
- cold storage hardware wallet.
The options are listed in order of increasing reliability. A website with a wallet is fast and convenient, but not entirely secure. It is recommended to choose an intermediate option - a light desktop program for a computer that will reliably save the accumulated coins. This, for example, is the Exodus wallet or the developer-friendly ZecWallet. Ledger and Trezor are represented as hardware wallets, and among web services, ZEC maintains the Bitgo website.
To buy coins, use a special exchanger or exchange. Cryptocurrency exchange is a site where you can buy or sell Zcash at the current market price. The project developers recommend such popular exchanges as Binance, Kraken, Coinbase and Genmini. You can also use the services of the exchanger - it is more convenient if the user does not want to go through the verification procedure on the exchanges. But exchangers can be fraudulent, so you should use the services of trusted services, such as ours.
You can buy Zcash (ZEC) for rubles and other currencies quickly in the following popular directions, according to the statistics of our system:
- rubles Visa / MasterCard → Zcash (ZEC) ;
- rubles of Sberbank → Zcash (ZEC) ;
- rubles Yandex Money → Zcash (ZEC) ;
- rubles Qiwi → Zcash (ZEC) ;
- rubles Tinkoff → Zcash (ZEC) ;
- rubles Alfa-Bank → Zcash (ZEC) ;
- Bitcoin (BTC) → Zcash (ZEC) .
To remain completely confidential on the Zcash network, it is recommended to buy BTC, and then exchange the first cryptocurrency for ZEC. This will ensure the confidentiality of the transaction. It is also not recommended to store Zcash on wallets, in exchangers or on exchanges - this is how the user trusts his cryptocurrency to third parties.
The developers warn that the safest way to work with currency is to use official software. The team emphasizes that even the most popular and trusted service is not immune from external attacks. An example of this is the bankrupt Mt. Gox. The problem is that most of the official clients are very demanding on the users computer.
So, a program with a copy of the blockchain requires from the users hardware from 4 GB of RAM. This is not suitable for traders, investors and other market players who do not want to keep in touch with the Zcash network all the time.
Use software from the development team if you have a productive computer or want to mine cryptocurrency. For advanced miners, there is a special blockchain-base assembly based on the Zcash source code. This provides the greatest stability when synchronizing with the network.
Zcash to ruble rate
As of May-July 2019, the Zcash rate against the ruble ranges from 4-5 thousand rubles. It is recommended to use the CoinMarketCap website to track the status of the ZEC price. The service collects data from more than 10 major exchanges such as Bitfinex, Binance, Bithumb, Kraken, Coinbase, etc. As a result, users are provided with the average ZEC value against the ruble.
As a rule, the current cryptocurrency rate is converted from dollars to RUB, to be reflected in the national currency. But there are exchanges that reflect the real market rate of the coin in relation to the ruble. For example, Russian-language sites Exmo.me, Livecoin.net and others. Here, the price is influenced not only by the price in dollars on other exchanges, but also by the current trading volume on the site.
Zcash to dollar rate
In the economy and cryptocurrency sphere, common national currencies are called fiat or fiat money. The main fiat in the world of digital money is the dollar. All current cryptocurrency rates are displayed through the dollar, the largest and most important transactions are carried out with the help of USD. Therefore, even in the Russian-speaking segment of the cryptocurrency world, most prices are first translated into USD, and then into RUB.
For 2019, the average Zcash rate against the dollar was 60-80 USD. The historical peak in value occurred in January 2018, when $ 690-750 was given for one Zcash coin. At the same time, due to the sharp jump and rapid fall, the cryptocurrency is considered ineffective for early investment - the profitability is -98%. But ZEC is often used for trading - a volatile coin can change its value by $ 5-7 during the day.
Zcash to Euro
Digital assets are rarely compared to the euro because even in European countries, the main operations with cryptocurrencies are carried out in US dollars. Most often, the ZEC / EUR pair is used for exchange trading in order to stop a decline in the dollar rate when the euro rate increases or to play on a repeated exchange. Also, they exchange for euros if they plan to withdraw cash in this national currency afterwards.
Today the Zcash rate to the euro is 55-65 EUR. Zcash is most often exchanged on the Kraken, Exmo.me, Cryptology, etc. Finding a similar pair on other sites is quite problematic.
Like Bitcoin, the Zcash issue is finite and amounts to 21 million coins. At the same time, unlike BTC, the size of the reward is not tied to the number of blocks, but depends only on the time parameter. The reward for calculating a block of transactions is halved every 4 years. At the same time, the initial amount is 12.5 ZEC, when for BTC this figure was 50 coins.
Another feature of the cryptocurrency is the delayed launch mechanism. So, in the first 34 days, the block reward was less than 12.5 coins. In the early days, the reward was equal to 1 ZEC, and after it began to gradually increase. This was done in order to prevent possible attacks on the digital currency and the discovery of serious network vulnerability bugs. Today there are about 7.1 million coins in circulation. According to user forecasts, the final emissions will be reached by 2030. The developers are in talks to slow down the release of the cryptocurrency in order to keep the network active.
The question that worries many cryptocurrency fans is how the emission is tracked and the exact number of coins issued is found. It seems logical that if you cannot know the amount of the transfer between users, then you cannot know the exact number of existing ZECs.
In fact, the current size of the issue is not an exact number, but sufficient, because the system knows that the user has sufficient funds to complete any operation. In this regard, it is mathematically possible to determine the approximate volume of ZEC issued, since users rarely hold cryptocurrency for a long time and prefer to trade it on exchanges.
Like any electronic money, the convict cryptocurrency does not have a gold standard that ensures its value. Also, the coin is not backed by securities, loans or corresponding banknotes, like digital money in electronic payment systems. Instead, Zcash is backed by natural market mechanisms - supply and demand, technological value, popularity, legal status in different countries, etc.
The price of ZEC and similar cryptocurrencies is not a bubble. Any money can be regarded as a commodity, and digital cash is money, because serves as a measure of the value of goods and services, as well as an equivalent. Imagine that a factory produces a product that is of no interest to anyone. In this case, the goods will not be bought, and its value will tend to zero. And vice versa, if there is a demand for the product, then the manufacturer has the right to increase the price for it in order to increase profits and develop production further.
The same applies to cryptocurrencies: their value is formed by supply and demand in the cryptocurrency environment, on exchanges, in exchange offices, etc. At the same time, most digital assets are poorly distributed, do not participate in the life of real exchanges and the global financial sector. This creates the volatility of ZEC and similar coins. During changeable periods, the price of one coin can change by 10-15 US dollars over several days.
But the main security of Zcash is a combination of a unique technology and a means of payment. In the system of this cryptocurrency, a balance has been created between the complete confidentiality of transfers and the efficiency of the transaction in terms of speed and low cost. The financial market is struggling to resist the proliferation of decentralized digital assets and lobbies for its interests in the governments of countries. It is technological systems like Zcash that will replace the existing banking system with a more humane and secure one.
The future of Zcash cryptocurrency
The Zcash team understands the importance of technology, therefore they are actively developing the project in all directions. In mid-2018, an update was released that accelerated the computation and generation of zk-SNARK confirmations by 5 times. Against the backdrop of this event, the ZEC rates jumped to $ 100-110 amid the general recession in the cryptocurrency market.
The developers assure users about the further development of the zk-SNARK protocol. The creators optimize the algorithm and add new complex functions to it. So, the team is developing the ability to add a distributed log to any existing solution as a secure system for corporate use. This will increase the investment attractiveness of the project.
Zcash Foundation scientists are also trying to create new, more effective solutions to the problem of zero knowledge proof. Technological improvements can significantly increase the popularity and value of ZEC in the market. Due to the exceptional functionality of the currency, the future of Zcash looks bright and in demand. But it is still too early to talk about an obvious increase in the exchange rate.