ZCash (ZEC) has seen a tremendous rise in popularity and fame over the course of the year as its development team made the platform more secure and efficient hence a highly private ZCash network. The platform however has faced stiff competition from the field of privacy coins including Monero (XMR), Verge (XVG) and ZCoin (XZC).
What is ZEC?
ZCash is a minable coin through the proof of work consensus mechanism. The privacy coin uses a public blockchain but transactions amounts and sending and receiving addresses remain private. However, users can decide to keep the transactions public as it is not a default private setting. The platform uses the CryptoNote technology to ensure that all transactions are settled privately with the transaction data obscured.
ZCash Privacy mechanism: zk-SNARK
The privacy mechanism of ZCash is based on the zero knowledge proof network named zk-SNARK. The technology simply allows the transactions to go through from one user to the next without revealing the data. Zero knowledge proof can be illustrated with a user who is supposed to reveal that a certain account is theirs by showing they know the password without giving out the password.
zk-SNARK vs Monero’s RingCT
Monero (XMR) currently boasts as the largest privacy coin in the cryptocurrency market. In terms of market capitalization, XMR is top at $1.73 Billion USD worth of XMR tokens, however how does its privacy mechanism compare to that of ZCash?
Monero uses the Ring confidential transactions (RingCT) technology that involves a mixing’ system that collects user data from both senders and recipients together. This disassociates information that could be used to identify a user from their transaction history. This combined with the stealth addresses obfuscate the transactions details.
Whilst Monero’s RingCT system is ‘sophisticated’, it is nonetheless vulnerable. The transaction details are not hidden as they can be tracked back on the public blockchain. The specific user information such as wallet addresses and amounts still remain hidden.
Digital Asset Research (DAR) Director of Technology Research, Lucas Nuzzi, did a research between the two privacy coins and had this to say about ZCash’s zk-SNARK and Monero’s RingCT technology,
“Monero does not hide anything at all. Technically, there is no obfuscation in Monero transactions; privacy is simply achieved by disassociating the identities of senders and recipients. While this approach has certainly contributed to Monero’s user adoption, it relies on the robustness of the heuristics used in the mixing process,” Nuzzi said. “While a hack on the ZCash platform would be a catastrophic event for ZCash, it guarantees of privacy are much stronger [than Monero],” he added.
Price analysis of ZCash (ZEC)
The privacy based coin is trading 2% up from the close on Tuesday, October 16, 2018 at a price of $114.54 USD per token. Privacy coins are known for their expensive nature and the price of ZEC does fit the bill. The coin lies 20th after dislodging Dogecoin (DOGE) earlier in the week on the market capitalization rakings. The coin has a total of 5,031,331 ZEC coins in circulation with a total market capitalization of $576,296,777 USD.