What is Zec (Zcash)

in #zec4 years ago

Zcash (ZEC) is another Crypto currency like bitcoin but with a few different features. Like Bitcoin it is based on a decentralised blockchain but allows for anonymity behind transaction amounts and parties involved. In Bitcoin if you know someone's address you can follow their transactions and you can see which all the addresses and their transaction amounts - so its quite clear how much money is moving around, with ZCash all the information is encrypted.


Zooko Wilcox
Zcash uses a special proof to secure the network called zk-snark - or proof of construction. This allows the network to maintain a secure ledger of balances without disclosing parties or amounts involved in transactions. This happens through the use of zero knowledge proofs - or basically where the person making the transaction has the ability to spend the ZEC and that the values balance and they haven't been spent before. InBitcoin each full node keeps a balance of what is held by each address in the UXTO or unspent transactions output database - with each transaction being verified to unlock that output.
Zcash is set to launch on the 28th of October 2016 and has a hefty heavy weight team working on it and backing it. These include names such as Roger Ver and Barry Seibert as well as Pantera Capital. The code is open source which is unusual as the Company - run by Zooko Wilcox, a 41 year old cryptographer - will expect to give 10% of the coins for funding costs and 1% for non profit organisations.

The Zcash total coin supply is going to be 21 million like Bitcoin, and it even follows the same issuance rate with 21m ZEC being issued over 131 years, but instead of having 10 minute blocks, ZCash will have a 2.5 minute block avarage with 4 times bigger block rewards that halve every 4 years.

How ZCASH is Funded and Distributed

Zcash has caused a lot of controversy for its method of distributing the crypto currency. The organisation is not set up as an opensource community but as a Company. This is the first major difference to Bitcoin and other crypto currencies such as ethereum. The second major difference is how they plan to reward investors and workers in the Company which is by a tax on mining rewards called "Founders reward"

The premine has been the bane of all crypto currency enthusiasts - but the line has become blurred between what is right and what is wrong. But at the same time the digital currency creators need to be incentivised to keep the project running and they often do this by launching a crypto currency and issuing coins to various people which are then dumped on the market depressing the price - the developer soon loses interest and the project is left idling.

With Zcash they have taken a different approach and have taken money from investors in the company to create the crypto currency before releasing it. But here comes the catch - for every unit of Z currency you mine during the first 4%, the Company that runs Zcash gets 20%, which will amount to 10% of the total supply. To some people this has been causing concern and ire as they feel that the investors are using the network to unfairly enrich themselves by the power that they control. The backers include Pantera Capital and various Bitcoin celebrities such as Roger Ver and Barry Seibert.

In some ways though this approach is sensible as it aligns the long-term goals of the Zcash community and the Company - i.e. to make it a success and give it the ability to fund itself to maintain development and research. The flipside is they are not disclosing who gets what from the mined coins - i.e. how much goes towards the investors and how much to the employees and officers of the Company.

The other point is that Zcash is being pushed by one of its investors - the Digital Currency Group, which owns a large percentage of the media outlets involved in the crypto currency space prompting some to accuse ZCash of being a product of corporate greed.

There has been a lot of talk on forums about this - and with the coin being open source, there have been some suggesting they will create their own currency based on exactly the same protocols but without the 10% tax on mining rewards.

How to Buy ZCASH

At the moment there is no way to buy Zcash and once it launches, exchanges will have to wait for a decent amoutn of volume to be mined before adding it as a trading pair.

You can test ZCash out on the test network for free by going to a faucet and then playing around with it. Stay tuned and we will let you know as soon as Zcash is released where to buy it and its live prices on all the markets.

For the time being though none of the ZCash coins can be mined fully which is similar to what happened with ethereum - except with ethereum a lot of the crypto currency was bought in a crowd fund prior to release.

How to Mine ZCASH

ZCash will use Equihash as an hashing algorithm, which is an asymmetric memory-hard PoW algorithm based on the generalized birthday problem. It relies on high RAM requirements to bottleneck the generation of proofs and making ASIC development unfeasible, much like Ethereum. In order to avoid Instamine ZCash will have a slow mining start, where block rewards will be issued slowler than normal. ZCash is currently in beta stage and the testnet is live.

You can try mining Zcash with a cloud mining contract on the Genesis Mining platform.

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