ZCash: ZEC basic principles, its advantages and drawbacks, ZEC mining. Where you can buy ZCash, review of digital wallets. Analysis of its competitors and ZEC prospects.
ZCash is steadily at the bottom of TOP-30 list of the largest cryptocurrencies by market cap, being far behind its major rivals, Monero and Dash. However, none of the cryptocurrency forks could achieve such results. Miners like ZCash and its rate is quite volatile for you to get your lucky chance and make a profit. Although, ZEC almost full privacy is at the same time its flaw, due to the restrictions by exchanges and regulators. From this review, you will learn what ZCash is like, what its advantages and disadvantages are, where you can buy and store the cryptocurrency, how it can be mined and what it is promising in future. Read and make money!
ZCash - a new step towards confidentiality or a good clone?
It seems that a new original idea should yield the startup at the stage of ICO incredible success and promote it into at least TOP-30 list. But experience proves that investors are not that willing to buy new ideas, preferring more reliable, tested classes of startups: payment systems, decentralized networks and privacy-based cryptocurrencies. Especially since more and more positive comments are heard about the latter. Some people think that Bitcoin is not confidential and the present wallets can be identified.
Among the cryptocurrencies, providing the highest level of confidentiality, ZCash (ZEC) is one of the most successful projects. According to CoinMarketCap (coinmarketcap.com), the coin steady ranks at the bottom of TOP-30 cryptocurrencies, featuring moderate volatility even during deep market drawdowns. However, the startup’s closest competitor, Monero is included in TOP-12. Read on about the differences in these two startups, Zcash advantages and its ZEC flaws, where to buy ZEC and how to mine ZCash cryptocurrency, what Zcash prospects are.
ZCash - ZEC cryptocurrency with a positive outlook
ZCash cryptocurrency was presented to the crypto community in January, 2016. The startup developers treated the project in a responsible and unique way; having offered something that nobody had designed before. ZCash is a cryptocurrency based on open-sourced code, offering a much higher standard of privacy through a sophisticated zero-knowledge proving scheme. ZCash closest competitors are Monero and Dash.
ZCash is the first cryptocurrency based on "Zerocash" protocol, a zero-knowledge proving scheme. It is designed so that one of the transaction participants can verify the reliability of the mathematical statement, having zero information about the second party in the transaction. Simply put, you can confirm the transaction, but you will learn nothing about the amount of money or about the receiver. User data encryption is based on zk-SNARK protocol (instead of common PoW or PoS). ZEC issuance volume is 21 million tokens.
- Interoperability. Irrespective of the way, you acquired the coins, all them have equal status.
- Confidentiality. Only two parties of the deal know about the transaction, but at the same time, they know nothing about each other.
- Compromising is impossible. The coins origin can’t be traced.
ZCash drawbacks include remuneration distribution system that originally overvalued the cryptocurrency. At present, supply/demand ratio has been balanced already.
To carry out payments, there are two types of wallets: public (open source) -”t” and private “z” (upon the wish of the transaction participant). Therefore, there are four types of making transactions, which are shown in the picture.
Where you can buy and store ZCash cryptocurrency
ZEC has been in TOP-30 list for a long time already and is among the most popular cryptocurrencies; but it has comparatively little turnover on large exchanges. For example, on Binance, ZCash daily turnover is about just 0.15% (107th place in the list), according to CoinMarketCap. These data can vary, and a lot depends on the cryptocurrency pair, ZEC is quoted to; but the coin is definitely behind not only LTC and DASH, but its direct rival Monero as well.
Among the exchanges, the turnover is relatively equal, there is no such exchange that would feature more than 50% of ZEC trading. It is a positive moment, meaning that different traders are interested in ZEC. The proportion is like this:
- a little over 20% is traded on Lbank, comparatively small crypto exchange in Hong Kong. They sell ZEC for ВТС, ЕТН, USDT;
- about 13.5-14% is traded on Estonian exchange HitBTC. There, you can buy the coin for Bitcoin and USDT (digital symbols associated with U.S. dollar);
- 10% of ZEC is traded on YoBit; where you can buy it mostly for ВТС;
- there rest of turnover is allocated between Bit-Z, Binance, Huobi, Bitfinex, WEX, Bittrex and other crypto exchanges.
There are few exotic currencies, traded to ZEC: ZEC/TRY (Turkish lira), ZEC/PLN (Polish zloty), ZEC/ZAR (South African rand). The fact that you can buy this cryptocurrency for the local currencies means people’s trust in it, but, compared to other cryptocurrencies, ZEC can be bought only for freely convertible currencies.
You can keep ZCash on crypto exchanges accounts (the best way for those, who trade crypto every day and look for transaction speed). But amid the bankruptcy BitConnect in 2018, and all those hacks, including Coincheck and Binance, I’d recommend digital wallets. You can download official wallet form the cryptocurrency official website; you can install other wallets with multi-currency support as well.
Important! Whatever wallet you chose, it must be synchronized with the official ZCash platform. So, I recommend right away visit the official website and select supported wallets from the list:
- Online wallets: JaXX, Coinomi, Bitpie, Guarda Wallet, HolyTransaction, FreeWallet, Cryptonator, Waterhole Pool, Stratum SmartWallet, Carbon Wallet;
- hardware wallets: Ledger, Trezor;
- cold wallets: ZCash and WinZEC (Linux, Windows), Kozyilmaz (MAC).
The most popular is JaXX (hjaxx.io). It has an attractive, user-friendly interface, adjusted to both desktops and mobile gadgets. It supports multiple currencies (about 7 cryptocurrencies). In terms of safety, JaXX is thought to be one of the best: secret keys are stored on a user’s computer; there is fast-track mechanism of backups and recovery.
In terms of mining, ZCash is rather appealing, compared to BTC. It is originally protected from ASIC (expensive, special equipment). Compared with Monero, ZCash graphic cards mining is more cost-effective. Coins are issued in the same way as BTC mining when new blocks are created. The reward for making a block is divided into two parts: reward for transactions and reward of a founder, which is about 20% of the block cost in the first four years; later it will be down to 10%. The time of making one block is about 150 seconds, block-size is about 2Mb.
To start ZCash mining, you need:
- buy a graphics card;
- connect to a pool (developers recommend: Coinmine, Suprnova, Flypool, Nice Hash);
- download software and synchronize it. A detailed manual for miners is on the site.
Those, who are not willing to engage with either wallets or crypto exchanges, have an alternative – Forex. ZCash is a popular cryptocurrency and is enlisted by many brokers. LiteForex offers Trading ZEC as well. LiteForex provides a set of cryptocurrency pairs that include ZCash; you can learn more by clicking this link.
There have been and will be attempts to develop completely confidential cryptocurrencies. However, ZCash leaves other clones and forks, according to the market cap, far behind. The most successful followers are:
- ZenCash. This coin can be compared to launching BCH. The cryptocurrency appeared in mid-2017 and is a direct ZEC fork. The difference from the original is in the way the miners’ reward is distributed and its multi-level safety system. The tools of encrypting and transmitting data are Zen Talk, Zen Pub, Zen Hide. It is hard to assess the prospects of the fork, as by the market cap, it is steady ranking between the 120th and 130th.
- ZClassic. This fork appeared in November, 2016, having separated due to the community arguments about the encryption mechanism. ZClassic supporters though that some blockchain elements remain open-sourced, which shouldn’t be featured by a private cryptocurrency. However, according to its market cap (below the 200th position), ZClassic isn’t promising much. Its price surge in January, 2018, was followed by a 80% crash and was reasoned by investors’ will to acquire Bitcoin Private.
- Bitcoin Private. The coin appeared in March, 2018 and was soon included into the TOP-30. Is a combination Bitcoin blockchain and ZClassic. It is still too early to dwell about its advantages and disadvantages; investors welcomed the startup idea.
ZEC (ZCash) prospects for investors
The ZEC cryptocurrency features rather positive prospects, but not without some flaws: The present cryptocurrency problems can be divided into two groups:
- A tougher competition. In addition to that the most projects are forks or clones of successful cryptocurrencies, in 2018, there is emerging a new trend – joining of the advantages, suggested by different types of cryptocurrencies in a single blockchain. Bitcoin Private is just one of the examples of such combination.
- Confidentiality. It is the main advantage and, at the same time, the main flaw of ZCash, The global community is not yet ready for cryptocurrencies and especially suspicious about completely confidential payments, which may be used for illegal transactions. People will accept sooner coins like Ripple, ВТС or ЕТН than the privacy-based cryptocurrencies. And so, their prospects are limited.
Recently, there has been information that Coincheck, hacked in January, delisted Monero, Dash ZCash in mid-March. The main reason is that transaction addresses are impossible to track, which makes money-laundering much easier and increases risks. The transfer on the exchange will be executed only from the checked accounts, whose owners have been verified.
ZEC rate is quite appealing for investors. ZEC price chart features some buyer interest, local drawdowns and growth, as well the general influence of the cryptocurrency market. ZEC is rather responsive to the news.
In terms of the future updates, developers arise no questions. ZCash team manages their project development and is working on its updating all the time. For example, they have planned the first in the cryptocurrency history fork “Owerwinter” aiming at the unprecedented protection of the network and the following updates.
Conclusion. ZCash is a really interesting cryptocurrency with quite promising future prospects. Unlike its forks, it is developing and updating; the original idea of its protocol is the advantage over other payment networks. Although its privacy can hinder its full-scope application, in a way, the cryptocurrency technology can be useful in the field of data transmission. The cryptocurrency price is influenced by both external factors (regulators’ decisions, exchange hacks), and the internal ones (updates, joining by new participants). ZEC is quite appropriate as a risk diversification in 2018 for an investment portfolio, including BTC and ETH.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.