Z-Cash Explained.
Zcash is a crypto-currency which has an unbelievable history. It was started on October 28, 2015.
Short after its release to the stock exchanges its value reached 3299 bitcoins. (which meant 2.000.000 Euro for only one tokens). Already the next day a token was worth only 580 EUR, only to rise again on 30.10.2017 again 1750 EUR and finally on 14.11. to fall below 100 EUR.
I will explain how these crazy price fluctuations came about, what makes Zcash so special and which criticism Zcash has to put up with.
How did the initial hype surrounding Zcash come about?
The extreme hype and the price explosion were mainly triggered by a broad media campaign. Even before the Initial Coin Offering (ICO), huge expectations were raised by (well) dependent media and experts who had themselves invested in ZEC and of course would benefit from a price increase. Among the influential "influencers" were Bitcoin.com, Coindesk magazine and Bitcoin developer Gavin Anderson.
The focus of the media campaign was above all on the high level of anonymity, which up to this time was not to be guaranteed by any other Altcoin . Also, the growing awareness of the fact that Bitcoin is not anonymous and third parties can see the transactions recorded on Bitcoins Blockchain made for the extreme hype.
What is Zcash?
The focus at Zcash is on anonymity and privacy. Although payments are also stored on a public block chain (such as Bitcoin and Ethereum), users have the ability to encrypt senders and recipients, as well as the transaction amount. For this purpose, Zcash uses two special cryptographic methods: the "zerocoin protocol" and "zk-SNARKS" - zero-knowledge succinct non-interactive argument of knowledge (zero-recognition method).
While the Zerocoin procedure allows full anonymity, zk-SNARKS is responsible for verifying the validity of the transaction.
Incidentally, Zcash relies heavily on bitcoin codebase. This is not surprising since the group of developers around founder Wilcox was made up of former Bitcoin developers. According to Zcash website, the developers have been guided by the principle of conservative innovation. The guiding principle of the development was therefore: "Avoid changes to Bitcoins design, if there is no good reason for it.".
What is the Zerocoin Protocol and Zero Knowledge Proof?
Zero-Knowledge Proof simply means that a calculation or result can be proved without repeating it. The statement can still be considered true.
The Zerocoin protocol encrypts the addresses of the sender and recipient and the amount cryptographically for private transactions on the public Zcash block chain.
Similarities and differences between Zcash and Bitcoin
The most striking common feature is probably the limited number of tokens amounting to 21 million. But it was also the "Reward Halvening",halving the reward for mining every 4 years.
The biggest differences compared to Bitcoin are:
The introduction of zk-SNARK that allows a second optional and completely anonymous transaction format.
The imposition of a compulsory levy equal to 10 percent of the mining revenues to the founders ("Rewards of the Founders"). This will be automatically forwarded to the founders.
The introduction of another mining algorithm.
A slower adaptation of the mining difficulty.
Zcash allows both private (encrypted) and transparent transactions to be sent. Here is a brief explanation: Transparent transactions take place almost like the Bitcoin protocol. The details of sender, recipient and amount can be determined on the blockchain. Private transactions, on the other hand, offer the described anonymity. However, they can also be subsequently discovered with the consent of both parties, so that the transaction can be viewed by other parties. The goal of this feature, according to founder Zooko Wilcox has been to ensure compliance with criminal law on money laundering and taxation. According to Wilcox, Zcash's goal has never been to support illegal activities.
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source: https://coin-hero.de/zcash/