Hello fellow traders. Today I'd like to elaborate a little bit on the topic of Zcash currency. Since we've not covered this type of currency in our blog. So what is it bout Zcash, that's so different from the other currencies? Lets start with definition: Zcash is a type of cryptocurrency which has been developed by Zerocoin Electric Coin Company. ZCash was created based on the Bitcoin Core code that Satoshi Nakamoto developed, and which has been successfully used in Bitcoin for a long time. Programmers refined the code in such a way as to change the anonymity protocol. The innovative ZECC system is the solution that helped create the original code for ZCash. The technology lies in the fact that the system confirms the transaction, but without information about the account holder, the amount of funds or the balance of the wallet. In 2014, the leaders have gathered enough resources which resulted in birth of protocol of another digital currency Zerocoin. Due to processing issues, the amendment was made by eliminating the major flaws, after which Zerocash was released. As a result, a coin was created, The currency itself is as competitive as the other currencies in the whole blockchain and seem in high demand amongst users and its got loads of cool features.
Key functions of Zcash
Non data disclosure is one key feature of Zcash. This function is the most remarkable, because thanks to it, the user can provide proof of the transaction, without disclosing the content of the data. This means 100& confidentiality and user safety. Also, its cryptographic verification function of encrypted data allows the user to maintain full privacy of the transaction and its amount. The authors of the study, who are currently engaged in the development of a proof function with zero disclosure, believe that the main problem that should be solved at this stage of development of Zcash is the speed of transactions. At the moment it takes up to 48 seconds to process transaction however the developers are aiming to reduce that amount of time. However, if the user chooses, he can also make the info visible for public.
Another cool feature of Zcash is hidden addresses as oppose to Bitcoin for example. The point here touches the idea that Bitcoin was originally designed so that the recipient must send the address to the sender. Hidden addresses reverse this process. Any user can create a new wallet and send funds to the recipient. Despite the fact that the address is new, the recipient will definitely have the corresponding key that will open the transaction. Transactions are published in a public chain, but the sender, receiver and amount of the transaction are not visible to anyone.
One more important feature is mining difficulty. Zcash is beneficial for those who want to receive coins for the formation of blocks. Bitcoin mining is constantly becoming more complex, so miners cannot earn enough money on their high power computers which adds difficulty to the whole mining process Mining ZCash is an opportunity to earn a fortune, no doubt there, however to an extent one can argue that significant amount of earnings will be used to cover electricity and power related costs. This task can be performed on a standard power computer.
Disadvantages of Currency "Z"
As any other currency Zcash has few weak points. Let's mention them. As been mentioned before the extent of mining difficulty exists, therefore miner needs to perform a lot of calculations to complete the transaction; Also,there is a possibility that the system will be hacked, or the users themselves will hack the data as it can be taken from another resource. ZCash only supports the Linux operating system, and the creators are not planning to change this yet.
Vulnerability of Zcash
In March 2018 currency was a direct subject of vulnerability, due to which hackers could create an infinite number of fake tokens. The error was discovered by cryptographer Ariel Gabizon who solved the problem with updating the Zcash Sapling protocol, which was activated in late October. The vulnerability was in the system zk-SNARKS, it is used to hide balances and user data. The problem did not affect privacy, it related exclusively to the possibility of creating non-existent coins which could led to potential fraud.
Updates installed in Zcash
The Zcash development team has successfully implemented several updates back in 2018. The first update, Overwinter, was conducted back in June 2018. According to the developers, it should protect users in the course of further updates in the event that a network conflict occurs on the basis of management. The second update has been made in September and includes the Sapling protocol, designed to improve the technical characteristics of Zcash transactions.
To summarise what we've discussed today ZCash is indeed powerful currency on the market as it offers a protection to user privacy. On the other hand if one intends to make profit, it may choose carefully before deciding which currency to use as Zcash may not be best option as it consumes large amount of cost for electricity.