Crypto Academy Week 16 - Homework Post for @levycore │ Privacy Coins
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Zcash is a decentralized cryptocurrency focused on privacy and anonymity, conceived by scientists from MIT (Massachusetts Institute of Technology), Johns Hopkins University and other prestigious academic and scientific institutions. It was first launched on October 28, 2016 and was originally based on the base code of bitcoin, Zcash was founded by the hand of computer security expert and entrepreneur Zooko Wilcox-O'Hearn, he is also the founder of Electronic Coin Company being this company the one that manages the development of Zcash
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• Transparent transactions work in the same way as in bitcoin on whose base code Zcash was originally based, they are sent between public addresses and recorded in an immutable public ledger what is known by blockchain, all the essential information about These transactions are available online for anyone to view, including the receiving shipping addresses and the amount sent.
These public transactions do not reveal the identities of the users in an open way, the only identifiers that an external observer can access from the blockchain are the public addresses, however, through the efforts of data scientists and the application of the law in recent years blockchain analysis methods have developed to such an extent that a stakeholder can quite reliably connect a public address on the blockchain to the real-world identity of its owner, essentially making transactions impossible private and that is not surprising, sooner or later that was going to happen
Protected transactions on the other hand take advantage of the technology of non-interactive knowledge arguments, knowledge 0 or zk-SNARKS, which allow completely anonymous transactions to be sent through an immutable public blockchain. The fact that the transaction has occurred is recorded in the general ledger, yes, but the shipping and receiving addresses and the amount sent are not disclosed to the public, this allows Zcash to offer its users the right to privacy without leaving to enjoy the advantages of a decentralized and permissionless digital currency.
Zcash is a rare token that can be mined with a supply limit of 21 million, the same amount as in bitcoin. The new ZECs are created in the form of block subsidies each time a new block is mined and added to the end of the blockchain a certain amount of coins is minted and a mining subsidy and a reward from the founders are divided, at a proportion from 80/20. The block subsidy is halved at regular intervals to lower the emission rate as the total supply of ZEC approaches its limit of 21 million, more or less like the halving in bitcoin.
In this process there are two beneficiaries, the miner subsidy, goes to the miner who has extracted the last block and the founders' reward is distributed among all the founders of Electronic Coin Company, the foundation of Zcash and its employees.
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Zcash claims to have created a new distribution book which they called a "zero-knowledge security layer" or ZSL. ZSL can be placed on top of the existing blockchain to add enhanced functionality to it. It allows semi-transparent transfers, which can be used in financial markets. These operations allow you to view previously selected data. For example, they can show basic data, such as the date and time of the transfer, for a public blockchain, but they do not disclose essential data, such as the identity of the parties involved and the value of the transfer.
•Low-priced transactions: Transactions on Zcash have a value of 0.0001 ZEC.
• Encrypted Memos: Zcash has the ability to send encrypted memos. Very useful to leave a secret message in the transaction.
• Display Keys: This feature allows Zcash users to allow audits on their accounts.
• Multi-signature transactions: Zcash allows multi-signature transactions. This represents that a transfer may require two or more parties to confirm the transaction before it is executed. It should be noted that multi-signature transactions cannot be done privately
At the time of writing the task, Zcash is # 56 in the ranking of the cryptocurrencies with the highest capitalization, with a price of $ 157.26. This coin had a historical value of $ 5,941.80 in October 2016.
Before starting the explanation I want to say that Zcash in addition to having its own wallets is also supported by other multi-currency wallets, such as Trust Wallet, Atomic Wallet, Exodus, Coinbase, among others.
1.- We must go to the Zcash page and go to the wallets section, there we can see different options to choose from, in my case I will use Zecwallet Lite in its version for Windows operating system.
2.- Now we must select the option of our preference and the download will begin. Once it is downloaded, we execute the program and other data necessary for its operation will begin to download.
3.- When the download is finished, the program gives us two options, the first is to create a new wallet and the second is to restore an existing one, we will select the option to create a new wallet.
4.- The next thing it shows us is our seed phrase, which must be kept in a safe place since it is used to recover the wallet in case of logging off, deleting the program, changing devices, among others. Once the phrase is backed up, click on ‘’ Start wallet ’’, we will wait a few seconds for it to load and voila, we have our wallet created, and in it we can see the common options that a wallet offers us
Lo que me motivo a elegir esta moneda fue la opción de poder elegir entre hacer transferencias totalmente publicas o hacerlas privadas, sin embargo, no todo es perfecto ya que Zcash tiene su ventajas y desventajas y hablaremos de ellas a continuación:
• Zcash guarantees safety with its zero-knowledge proof (PCC) Technology.
• Zk-SNARK certify the integrity of the network contrary to the fact that the transfers are completely encrypted
• Many wallets support Zcash, including Ledger, Trezor, and many other wallets available on the Internet. So ZEC can be widely used more.
• Zcash has the ability to become a strong anonymous currency. This is due to encryption software that can approve transfers without providing data publicly.
• Zcash create a space of time between the blocks of 2.5 minutes, generating speed when placing a transaction in the blocks
• In theory, if the Shielded wallet address is used, no one would be able to keep track of the transfers.
• Because transfers cannot be traced, they can be used illicitly, to launder money, extortion, among others.
• The safety factor is little used by users and has different degrees of anonymity that depends on the sender and the receiver.
• The distribution of miners' rewards is not to the liking of the Zcash community
• Support for Shielded wallets is only found in few wallets and no exchanges support them
• Governments can limit the use of this cryptocurrency due to its privacy, we all know that governments like to know everything.
The function of private cryptocurrencies in the crypto ecosystem is of utmost importance, the founders of Zcash realized the non-existent privacy in the cryptocurrency blockchains and decided to solve them, however, little by little we will see that governments and regulatory entities, They will impact against the cryptographic assets of the users and at that moment we will see cryptocurrencies such as Zcash, monero, among others, have an increase in their. If we take into account the evolution of the value of the cryptocurrency and its important technological advances, comparing them with bitcoin, we will be able to see the Zcash with a very good price at the end of 2021