Crypto Academy Week 16 - Homework Post for [Crypto Professor @levycore]

Before looking at our assignment for the week, I will do a review on privacy coins.

What are Privacy Coins?

These are cryptocurrencies whose transactions are not made public like cryptocurrencies like Bitcoin. The destination and origin of the transactions are hidden from the public, only permitted users can have access to the transaction details. In other cryptocurrencies, you can easily get access to the user's wallet balance, with privacy coins, not the case. In all privacy coins as the name is power by anonymous transactions on the blockchain. I know this will be new to many readers, given that we always have the notion that all transactions on the blockchain are open to public consumption.

From our course present to us this week by our professor @levycore on Privacy Coins. I will be looking at a Zcash which is in other words a brother to Bitcoin as some may look at it.

Zcash (ZEC)

ZCash is a cryptocurrency that carries out private transactions on the blockchain. ZCash is one of the most popular Privacy Coins that offer its users anonymous transactions, compared to bitcoin and other cryptocurrency transactions.

Zcash was lunch in 2016, and the history can be traced as far back as 2013. The aim was to developed something different from Bitcoin, which was putting out every detail of its transactions. The Zerocoin white paper, back by Professor Matthew Green and other cryptographers was made public in 2013. This project was to solve the problem of many users wanting anonymous transactions, which Bitcoin could not offer. In 2015, the brains behind Zerocoin decided to step up and create the cryptocurrency Zcash. In October 2016, ZCash was announced and open up to the public.

Zcash team works so hard to make sure this cryptocurrency is unique and completely different from others. Using the "Zcash ceremony" and "Zcash trusted setup" process, which needed to have trust people from around the world. In this method, they had to join to create a master public key for its blockchain, which later asked to be destroyed. Work is still going on as developing the Zcash blockchain, which supports by the Zcash Foundation.

Just like other cryptocurrencies, Zcash is not different. Be its shield or unshielded transactions, both are recorded and verified by nodes on the blockchain. The only feature that stands Zcash different from other cryptocurrencies is its privacy feature. Winners devote an open network of computers to add new blocks. It is done by calculating the amount of RAM using an algorithm scheme called Equihash to secure the blockchain.

Zcash is rank position 54 as of the date of this post, looking very promising with a market capitalization of ~$ 1.93B. (Statistics from the coinmarketcap.com website).
To hold Zcash you need to have a digital wallet to help keep your coins safe. The Electronic Coin Company encourages users to download and used the official Zcash wallet from the website. I will show a step to own the Zcash address.

Create a wallet.

Visit website z.cash
Below the banner, we have "Buy Zcash" and "Get a wallet".

• click Get a wallet

Take us to the wallet page, where we have access to download the app depending on our device. I will be downloading a desktop wallet for Zcash.

• im selecting Zecwallet lite
• click visit site

Here is the official site to download Zecwallet Lite
Website Zecwallet. co

• click download for desktop

I was unable to download directly from the site, so instructed to download from the Github account. Here I downloaded the file in a WinRAR format and unzip.

https://github.com/adityapk00/zecwallet-lite/releases

• click the Zecwallet app to run the application.
• Click creat new (to create a new wallet)

The next page will demand you to copy seed phases, which you can use to recover your funds

• Click start wallet

Wallet dashboard

My wallet is unluck and no password is set, meaning I can carry out transactions without the need for passwords. We are talking about funds here, So I will be encrypting my wallet.

• Click wallet
• Select Encrypt wallet

• Set my password

• Click enter to validate the password set.

• Password has been set.

Remember this encryption can be removed following the same step and using the password.

I choose Zcash because of its popularity and resemblance to bitcoin. Zcash still stands as one of the cryptocurrencies that have not yet been hacked.

Advantages of Zcash

• One aspect when researching to invest in a cryptocurrency, is the teams. The reputation of the team counts a lot, and with Zooko Wilcox as CEO, Nathan Wilcox and others have boosted the reputation of Zcash. Next, has been the network downtime and breaches, which Zcash has not experienced like other cryptocurrencies (Monero came close to hacked).

• The winning feature of Zcash is the ability to hide and shield the transactions of both senders and receivers on the blockchain. Privacy makes users anonymous and so will reduce the rate of attack to the user address. It is of great advantage to many enterprises as most of the company information can be confidential from public consumption.

• The use of the privacy technology called "zero-knowledge proofs" has boost transaction security. The technology can be used to verify data without leaking information which could be of risk to any transaction on the blockchain.

• With the use of the algorithm scheme Equihash (proof of work system), which I mentioned above, it is easy to mine ZEC. GPU hardware is affordable, and its energy consumption is low.

Disadvantages

• The privacy technology used is not unique to Zcash, which means some other cryptocurrency can decide to implement the technology as well.

• The competition is very high in the privacy coins. The presence of, well to do cryptocurrencies like Monero, DASH, and many others have created stiff market competition for Zcash.

• Zcash is not a fully decentralized system, it is run by Electronic Coin Company which is a decentralized enterprise.

• I mention the "Zcash trusted setup" process, which was used during creation. This process is not 100% secure as you rely on trust given that you can not prove if everyone followed the instructions to destroy the remaining data.

Conclusion

One thing that stands with Zcash is the ability to Trust. You must be ready to extend to trust that this is where you want to be as a Zcash user. Given that more and more people want to anonymous with their transactions on the blockchain, Zcash is moving in the direction. While fighting the competition with other privacy coins, Zcash with its zero-knowledge proofs is securing the transaction of its users.

Cc: @levycore