ZCash: What to know before investing | finder.com

ZCash (ZEC): Beyond the Zerocoin project

ZCash (ZEC)

Beyond the Zerocoin project

Everything you need to know about ZCash, a cryptocurrency built to protect user privacy.

ZCash is a cryptocurrency with a strong emphasis on privacy and identity protection. ZCash maintains the benefits of a public blockchain while enabling completely anonymous transactions.

This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

What is ZCash?

IconSymbolInitial release dateAlgorithm typeMax. supply
ZEC28 October, 2016zk-SNARKs21 million ZEC

While cryptocurrencies are often hailed as “anonymous,” in many cases user identity can be traced by following the transaction history on the blockchain. ZCash was born from a project called ZeroCoin, originally geared towards improving anonymity for bitcoin users. Using a specialized form of zero-knowledge cryptography, ZCash makes it possible for fully encrypted transactions to be validated by the network’s consensus protocol.

How is ZCash different from bitcoin?

ZCash, itself, is a fork of the bitcoin protocol. While ZEC is a separate cryptocurrency and maintains its 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.

Bitcoin, and many other cryptocurrencies, rely on private keys to identify users. While these keys are cryptographically generated, an address that is used for multiple transactions over time can become linked to a particular key, leaving a “paper trail” of sorts that is tied to that user. The bitcoin blockchain keeps a record of every transaction, including the addresses of both parties involved and the amount of the transaction, which is accessible to the public. The ZCash blockchain, on the other hand, only shows that a transaction occurred, without revealing the amount exchanged or information about the identity of either the sender or the recipient.

Selective disclosure in ZCash

ZCash grew primarily out of a desire to increase privacy protections for bitcoin users. That being said, within ZCash users can choose whether or not to use certain privacy features. When making a transaction in ZCash, you have the option to opt in or out of publishing information about your wallet address and the amount of the transaction to the public blockchain. The option for “selective disclosure” within ZCash is designed largely to give users the option to comply with anti-money laundering regulations, tax regulations, and audits.

Where can I use ZEC as payment?

Like bitcoin, ZEC can be used as payment anywhere that vendors are willing to accept it. Notably, the multi-currency Jaxx wallet, available for both iOS and Android, has integrated support for ZEC. Services designed to offer users enhanced levels of identity protection, such as certain VPNs, have been some of the first to offer options for ZCash payment.

How to invest in ZEC

You can purchase ZEC on a number of cryptocurrency exchanges, including Bittrex, Poloniex, and Shapeshift. In some cases, depending on the particular exchange, you can buy ZEC directly with fiat currency, otherwise, you will need to use bitcoin or another cryptocurrency for your purchase.

Rates last updated February 22nd, 2018
Details Features
Coinbase Digital Currency Exchange
Coinbase Digital Currency Exchange
Buy and sell bitcoin, Ethereum, Bitcoin Cash and Litecoin on one of the world's most renowned cryptocurrency exchanges.
  • Fees: Varies by transaction
  • Supported countries: 32 countries
  • Payment methods: Bank transfer, Credit/debit card, wire
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LocalBitcoins P2P Exchange
LocalBitcoins P2P Exchange
Trade fiat currency for bitcoin in person or online with this peer-to-peer exchange offering competitive fees and wide delivery options.
  • Fees: 1% commission for each completed operation
  • Supported countries: Exchangers in 248 countries
  • Payment methods: PayPal, Credit/Debit and more
Go to site
BitQuick P2P Bitcoin Marketplace
BitQuick P2P Bitcoin Marketplace
Buy and sell bitcoin fast through a cash deposit at your local bank branch or credit union, or via a money transfer service.
  • Fees: 2% to buy, 0% to sell
  • Supported cryptos: BTC
  • Funding methods: Cash – USD
Go to site More info
Binance Cryptocurrency Exchange
Binance Cryptocurrency Exchange
Trade 60+ cryptocurrency pairs on this up-and-coming exchange based in China. Multi-language support.
  • Trade Bitcoin Cash & Bitcoin Gold
  • Fees: 0.1% trading fee
  • Supported countries: Worldwide
  • Deposit methods: BTC, ETH, LTC, NEO & BNB
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Paxful Bitcoin Marketplace
Paxful Bitcoin Marketplace
Connect with bitcoin buyers and sellers through this peer-to-peer marketplace that accepts cash, credit and more than 300 other payment methods.
  • Fees: Varies by transaction, and PayPal no fees
  • Supported countries: Worldwide
  • Payment methods: Western Union, PayPal and many more
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Changelly Crypto-to-Crypto Exchange
Changelly Crypto-to-Crypto Exchange
Access competitive crypto-to-crypto exchange rates for more than 35 cryptocurrencies on this global exchange.
  • Exchange Bitcoin Cash & Bitcoin Gold
  • Fees: 0.5% + networking fees
  • Supported countries: Worldwide
  • Payment methods: USD, EUR, 35+ cryptos
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Indacoin Cryptocurrency Exchange
Indacoin Cryptocurrency Exchange
Use your credit or debit card to buy bitcoin and other cryptocurrency without having to verify your identity.
  • Fees: Varies by transaction
  • Supported countries: More than 100 countries
  • Payment methods: Payza, Credit/Debit cards (USD) and more
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Cancoin P2P Crypto Exchange
Cancoin P2P Crypto Exchange
Buy and sell bitcoin with privacy on this multi-signature, peer-to-peer exchange that supports a wide range of payment options.
  • Fees: 1% + miner's fee (sellers only)
  • Supported countries: USA & Canada
  • Payment methods: Cash, PayPal, Western Union & more
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Bitit Bitcoin Marketplace
Bitit Bitcoin Marketplace
Buy bitcoin with cash or credit card and get express delivery in as little as 10 minutes.
  • Fees: Card: 8.9%, Cash: 11.9%
  • Supported countries: 50+ countries
  • Deposit methods: Credit card, cash vouchers, Epay
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Coinmama Bitcoin Marketplace
Coinmama Bitcoin Marketplace
Use USD/EUR to buy bitcoin and Ether with credit card or cash on the Coinmama cryptocurrency exchange.
  • Fees: 5.5% + 5% for credit card
  • Supported countries: 226 countries worldwide
  • Payment methods: Credit/debit card, cash
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VirWox Virtual Currency Exchange
VirWox Virtual Currency Exchange
Buy bitcoin through PayPal on one of the oldest virtual currency exchanges in the business.
  • Fees: Varies by transaction
  • Supported countries: Worldwide
  • Payment methods: PayPal, Skrill, paysafecard, uKash
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xCoins P2P Bitcoin Lending
xCoins P2P Bitcoin Lending
Buy bitcoin instantly with credit card, PayPal or bank account on this peer-to-peer lending platform.
  • Fees: Varies by transaction
  • Supported countries: 40+ countries
  • Payment methods: Credit card, PayPal, bank transfer
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Cryptex24 Exchange
Cryptex24 Exchange
Buy and sell crypto and other digital currencies on this global fixed-rate exchange.
  • Fees: Varies by transaction
  • Supported countries: Worldwide
  • Payment methods: Western Union, MoneyGram, Perfect Money & more
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Is ZCash a good investment?

While the cryptocurrency space is known to be a volatile, high-risk space, investors who choose to buy into ZCash have the potential to profit if the value of the currency goes up. Of course, as with any cryptocurrency, there is no guarantee.Historically there has been some stigma attached to cryptocurrencies that place an emphasis on anonymity, fueled by the assumption that anyone who uses them must be engaging in some sort of illicit behavior. However, with the rise of identity theft, ad targeting, data mining, and other forms of surveillance, many people are beginning to take increased measures to protect their identities. As a result, cryptocurrencies that emphasize user privacy, like ZCash, may gain more mainstream support.

It is also possible to mine ZEC. By contributing to the ZCash network, miners can earn rewards by devoting computing power to validating transactions on the ZCash blockchain.

What to watch out for

  • >ZCash can be used as a privacy enhancement tool, but it is not anonymous by default. Furthermore, because shielding transaction data from the public blockchain is an optional feature, it is possible that only a minority of users will take advantage of this ability, potentially making it easier to trace the history of private transactions on an otherwise largely transparent blockchain.
  • ZCash uses a new form of cryptographic algorithm. Like any new technology, zk-SNARKs is still being tested, explored, and developed. The possibility for unknown vulnerabilities to be exploited is something that users should be aware of.
  • Unlike some other cryptocurrencies, there is a company behind ZCash. Zooko Wilcox, generally considered to be the creator of ZCash, is the CEO of the ZCash company. 10% of all ZCash mined within the first four years, called the “Founders Reward,” goes to stakeholders in the ZCash company.

What’s next for ZCash?

  • Collaboration with Ethereum. The team behind ZCash is working with the developers at Ethereum to integrate the algorithms behind ZCash’s privacy features into the Ethereum platform. Ongoing collaboration between these two projects includes a vision to create a larger bridge between the ZCash and Ethereum blockchains.
  • Cross-chain atomic swaps. Often abbreviated to XCAT, cross-chain atomic swaps are on the development roadmap for ZCash. These allow instant trades between cryptocurrencies and blockchains. In addition to integrating with the Ethereum blockchain, ZCash is also working on developing interoperability with bitcoin and other blockchains.

Frequently asked questions

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