Zcash is a fork of bitcoin and is similar to it in that transaction data is recorded on a public blockchain. However, Zcash offers users the choice of utilizing transparent transactions or private transactions.
Zcash obscures personal and transaction data through zero-knowledge proofs called zk-SNARKS. Zero-knowledge proofs make it possible for one party to prove that they know the value of something to another party, without revealing any information beyond that they know that value.
Launch and Issuance
After the team released two audits conducted by NCG Group and Coinspect, the Zcash network launched in October of 2016. The network’s maximum supply, like bitcoin, is 21 million coins. For the first four years of Zcash’s existence, 50 ZEC will be mined every ten minutes.
Zcash also has a ‘founder’s reward’, which means that over time, 10% of the total zcash supply will be distributed to investors, founders, employees and advisors. The reward is taken from each block reward for the first four years of the project: 80% of the block reward goes to miners and the remaining 20% goes to the founders. After the project’s first four years, 100% of the block reward will be given to miners. Some founders have committed to donating a portion of their rewards to the Zcash Foundation, the sum of which amounts to more than 10% of the founders’ reward and 1% of zcash’s monetary base.
Network Design and Security
Zcash is a fork of bitcoin, but its developers have modified the code in several ways. Features of Zcash different from bitcoin include its proof-of-work algorithm, its block time (2.5 minutes) and its block size.
Perhaps most notably, Zcash aims to offer more privacy than bitcoin and provides users with the option to use private transactions, keeping transaction information private. It does so by utilizing zero knowledge proofs, also called zk-SNARKS, which obfuscate the addresses of transacting parties as well as the amounts transferred. Zero-knowledge proofs make it possible for one party to prove that they know the value of something to another party, without revealing any information beyond that they know that value.
The total possible supply of zcash is 21 million coins. Eventually, 10% of total zcash supply will be allocated to the founders’ reward. Of that allotment, 1.44% will be distributed to the non-profit Zcash Foundation and 1.19% will be distributed to the Electric Coin Company strategic reserve. In addition, 5.72% of the allotment will go to the founders, employees and advisors. The final 1.65% of the allotment will be distributed to investors.
Users must choose between two types of transactions when utilizing Zcash: Transparent transactions or private transactions. Transparent transactions make data publicly visible on the blockchain. In contrast, private transactions do not reveal data. It is possible to send funds between transparent and private addresses.
Transactions between two transparent addresses work the same way as transactions in bitcoin, and the transaction data is visible on the public blockchain. Transactions between private addresses are recorded on the blockchain so that it is verifiable that they existed and that associated transaction fees were paid, however the rest of the transaction data is encrypted and not visible on the blockchain.
Zcash is mostly coded in C++, Rust, Python, TeX and Kotlin.