What is Cryptocurrency Zcash? Introduction to its Features
Cryptocurrency Zcash was formerly listed on Japanese cryptocurrency exchanges. After a while, it was delisted due to money laundering concerns. Zcash is a cryptographic asset that is popular globally.
In this article, I will explain the features of Zcash.
What is Zcash
Zcash is a cryptographic asset that is a Privacy Coin with the symbol ZEC.
In general, blockchains are said to have high transparency, and information in Bitcoin (BTC) and Ethereum (ETH) such as “who has what?” or “from where to where?” can be verified. To send crypto assets, you must tell the other party your wallet’s address, so when informing the other party of your wallet’s address you accept that the other person can see the contents of your own wallet.
Zcash is an anonymous currency that was born to solve this quandary. By using Zcash, you will be able to send information such as “how much do you have?” and “how much did you send to where?” so it is not transparent to others.
As of January 26, 2019, Zcash is ranked 21st in total market capitalization.
For the current price of Zcash, please see below:
Features of Zcash
Zcash employs zk – SNARK
zk-SNARK (zero knowledge – Succinct Non – interactive ARgument of Knowledge) making it the most powerful anonymous cryptocurrency among several anonymous currencies. zk – SNARK is based on zero-knowledge proof.
Zero-knowledge proof is a technology to “prove that you know the information without exposing the information content to the other party.”
On a blockchain, the sender approves the transaction by verifying the information to the approver as valid. However, on an anonymous blockchain, the contents of the information are not visible to the approver in order to ensure anonymity. Even under these circumstances, the approver needs to approve the transaction by judging that the information is correct. Zero-knowledge proof is used for that. Generally, in order to use zero-knowledge proof, it is necessary for both the sender and approver to communicate in real time online, but this is not realistic. Therefore, in zk – SNARK, the sender only transmits a message to the approver once, and zero-knowledge proof can be done.
Since the mechanism of zk – SNARK is professional and includes difficult content, if you are interested, please see “What are zk – SNARKs?” on the Zcash official website.
Visible / invisible transaction contents
For Zcash payments, two kinds of addresses are used. A transparent address that starts with a ‘t’ that can be seen by third parties and a private address starting with a ‘z’ that cannot be seen by third parties. A user can remit money of the same type or different types of addresses to each other.
In particular, payments between private addresses is understood only by the fact that a payment has occurred, so we do not know anything about its contents. A point of caution is that although Zcash’s anonymous technology is powerful, it means that anonymity cannot be secured when a transparent address is entered. The amount of payment and the contents of the memo column will be revealed due to the transparent address side.
Also, Zcash will be able to disclose payment information to private addresses by using the browse key. In addition, you can disclose deposit / withdrawal information by using the full browse key.
Recognition of anonymous currencies in Japan
Anonymous currencies bring about a concern of money laundering. Especially with Japan, Zcash was delisted from Coincheck because there was concern of money laundering.
The Financial Services Agency of Japan has discussed anonymous currencies in their organized study groups (6th, 7th) over the cryptocurrency exchange industry. According to the board minutes, the dominating opinion is Zcash and other anonymous currencies are treated as “problematic currencies” and they are prohibited from being handled as they may be used in connection with money laundering and illegal acts. On the other hand, since anonymity is a very effective technology in terms of protecting the privacy of consumers, completely restricting transactions of anonymous currencies going out to overseas exchanges and decentralized exchanges and becoming dark is a possibility and is thus a concern by the Japanese government.
Major cryptocurrency exchanges where you can buy and sell Zcash
Zcash official info