In a world teeming with cryptocurrencies, Zcash (ZEC) stands tall with its distinctive privacy-preserving features, setting a new precedent for digital cash. While it builds upon the foundation laid by Bitcoin, it goes further by providing an additional layer of security and anonymity that makes it a compelling choice for privacy-conscious individuals and entities. 

This comprehensive guide delves into the intricacies of Zcash, uncovering its roots, understanding its unique attributes, comparing it with Bitcoin, and exploring the dynamics of its native token, ZEC. By the end of this exploration, you’ll grasp the unique strengths and possibilities that Zcash brings to the ever-evolving world of cryptocurrency.


Born in 2013, Zcash had its humble beginnings under the name “Zerocoin.” Initially proposed as an experimental add-on to Bitcoin, Zerocoin used state-of-the-art mathematical techniques known as “zero-knowledge proofs.” However, due to the cutting-edge and resource-intensive nature of the Zerocoin protocol, it wasn’t seen as a practical choice for integration into Bitcoin by its core developers.

In the wake of this, Zerocoin’s founding scientists from John Hopkins University joined hands with researchers from MIT and Tel Aviv University to further refine the protocol. The outcome was a substantially more efficient form of zero-knowledge proofs, which they christened as “Zerocash” or “Zcash.” Zooko Wilcox, the current CEO, was brought on board to spearhead the project. This, coupled with raising over $3 million in venture funding over two rounds, marked the genesis of Zcash’s development under the Zcash Company. Their mission: to evolve Zcash into a full-fledged cryptocurrency.

The Zcash Company, in 2017, birthed a separate entity known as the Zcash Foundation. Registered as a 501(c)3 nonprofit, the foundation was established to construct internet payment and privacy infrastructure for the public good, primarily focusing on Zcash protocol and blockchain users. In 2019, the Zcash Company underwent a rebranding process, resulting in its new identity – the Electric Coin Company.

Zcash’s inception was rooted in the understanding that Bitcoin couldn’t offer robust privacy safeguards. Given that Bitcoin transactions were recorded on a public decentralized ledger, substantial amounts of information could be inferred from it. Central to Zcash’s technological framework are zero-knowledge proofs. These allow for transaction data to be verified without divulging details about the amount or the involved parties. Zcash provides its users the option to share transaction and address information selectively, accommodating audit or regulatory requirements via payment disclosures and view keys. Utilizing zero-knowledge proofs, Zcash aspires to establish a genuinely fungible, privacy-centric cryptocurrency.

Zcash owes its strength to solid scientific principles and independent audits. An open-source protocol built on the codebase of Bitcoin Core, it has been developed by a team of engineers specializing in security.

What is Zcash?

Zcash is a distinctive cryptocurrency that places a premium on enhanced privacy features. Although it is built on a public blockchain – much like Bitcoin – it uniquely allows users to manage the degree of public visibility of their transaction details.

By employing Zcash, users not only experience amplified privacy but also enjoy the security and transparency benefits that a public blockchain offers. This clever balance between privacy and transparency is achieved through the use of zero-knowledge proofs, sophisticated cryptographic protocols that enable private transactions to occur on a public blockchain.

Key Aspects of Zcash (ZEC)

  • A cryptocurrency with a keen focus on privacy.
  • Developed on the framework of Bitcoin’s public blockchain, but modified to incorporate selective privacy features.
  • Allows users to opt for certain details of their transactions to be concealed if they prefer.
  • Leverages zero-knowledge proofs to keep personal and transaction data confidential.

Zcash Consensus Mechanism

Zcash employs a proof-of-work consensus mechanism for its operation. This method of consensus is a definitive feature of Zcash, and there are no plans to shift to another consensus mechanism to safeguard the network. In this setup, Zcash miners play a pivotal role in securing the network by solving complex computational puzzles to generate blocks.

For the network to function seamlessly, every miner or node must agree on the sequence in which the blocks are produced. Once consensus is reached, the state of all recorded information is confirmed, and the network progresses to the next block. The next section covers the technicalities in more detail.

Zcash Vs Bitcoin

The Bitcoin community is known for championing transparent transactions while preserving anonymity. However, an interested party or stakeholder can trace the parties involved in a transaction within the Bitcoin ecosystem.

Zcash takes a different approach. It does not eliminate transaction information; instead, it encrypts it to prevent tracking. While the Zcash blockchain remains encrypted, the use of the security protocol zk-SNARK adds an extra layer of user security and anonymity.

Bitcoin employs a hashing algorithm known as SHA-256. On the other hand, Zcash uses Equihash, a different algorithm that’s incompatible with the hardware and software designed for Bitcoin mining. In addition to this, Zcash has larger blocks and extended hashing times, which in turn enhance the network’s hash rate. The hash rate of a cryptocurrency is the processing power of its miners’ network; it indicates how quickly transactions can be verified and validated to open a new block.

Hashing is a procedure used to transform data into a string of alphanumeric characters, referred to as the hash. This string is unique because it’s generated from the data within the block. Once hashed, it cannot be duplicated. The hashing algorithm is the mathematical method employed to create this unique alphanumeric string.

$ZEC Coin

ZEC, the native currency of Zcash, shares several properties with Bitcoin (BTC), including decentralization. However, it goes a step further by better embodying the essence of digital cash.

Just like Bitcoin, there’s a maximum supply of ZEC set at 21 million. The production of new ZEC coins is carried out through a proof-of-work (PoW) mining process, with mining reward halvings taking place at varying intervals.

What sets ZEC apart and adds to its investment attractiveness is the extra privacy features that it offers beyond those of Bitcoin.

ZEC tokens can be earned by miners who contribute to maintaining and managing the network. Interestingly, Zcash didn’t hold an Initial Coin Offering (ICO). The founders chose instead to take a fee from the mining rewards. Over time, 10% of all ZEC coins produced, amounting to 2.1 million, will go to the founders.


As we’ve journeyed through the world of Zcash, it’s clear that this cryptocurrency is more than just another digital coin on the market. With its robust focus on user privacy, innovative use of zero-knowledge proofs, and an inherent desire to improve upon the principles established by Bitcoin, Zcash represents a fascinating evolution in the realm of digital currencies. While it shares the decentralized ethos of its predecessor, Zcash strides forward, providing users with a unique degree of control over the visibility of their transaction details. 

Its native token, ZEC, embodies these values while offering an intriguing investment avenue in the cryptosphere. As the landscape of cryptocurrency continues to evolve and mature, the role of privacy-centric digital currencies like Zcash will undoubtedly be integral in shaping the future of online transactions and financial freedom.