For cryptocurrency users, privacy is a very important issue. And in fact, one of the main attractions of Blockchain technology. However, how far can and should you go with user privacy? Our currency today tries to answer that question: Zcash.
Release year: 2016
Circulating volume: 7.751.844 ZEC
Price today: $ 37.79
Market capitalization: $ 292,964,673 (30th place)
Origin: More privacy is always better
Zcash was born in 2016 as an alternative to the, until now, main cryptocurrency when it came to privacy issues. We refer to Monero, a currency created precisely to complement one of the most important aspects of Bitcoin and other cryptocurrencies.
And it is that, although the Blockchain of cryptocurrencies are public and auditable. An attempt is made to provide the highest possible security to the identity of users immersed in transactions within the blockchain. Therefore, the name of the user who owns the address who made a money transfer or who received it is hidden.
However, this method of identity protection is not foolproof. On the contrary, the police and state security organs can, with some work, trace the origin of some funds. Precisely a situation that Zcash tries to avoid with its system.
The base code used by the Zcash developers is that of Bitcoin. And since inception, 20% of ZEC’s total supply (set at 21 million tokens) has been part of a fund for founders. In order to cover the operating expenses involved in the development and maintenance of this Blockchain.
The role of ZEC
Zcash has two main functions as a cryptocurrency. The first of them being the classic one, that is, to serve as a means for the acquisition of goods and services. As well as, for the transfer of funds between users who have ZEC in their digital wallet.
However, the center of Zcash is its second function. We refer to being a currency that serves to protect the identity of users who carry out transactions with it. Using advanced cryptographic technology to make it impossible to find out who is behind a money transfer.
What have you achieved so far?
The greatest achievement achieved by Zcash so far, is to remove the crown from Monero as the safest cryptocurrency in the world. Well, ZEC from the beginning emphasized this feature of its Blockchain. Ensuring that the other cryptocurrencies did not guarantee their holders the ability to protect their data.
Zcash is able to offer this control to its users through an optional privacy system in transactions. Which allows those who prefer it, to hide the sender, recipient and amount of any transaction they carry out on the Zcash Blockchain.
The objective of allowing absolute privacy of a transaction to be optional is to allow users of the currency to display their payments for auditing purposes. So that they can be in compliance with the laws against money laundering in their countries, as well as with the payment of taxes.
This is achieved by creating two different types of addresses within the ZEC blockchain. Transparent addresses or T-addresses, and private addresses or Z-addresses. These addresses are interoperable, that is, funds can be transferred from a Z address to a T. While, when a transaction takes place between two T addresses, their information is displayed as in the Bitcoin Blockchain.
The biggest challenge for Zcash is, of course, the fight against cyber crime. Well, a cryptocurrency that allows to hide beyond any possibility of hacking, the identity of those who carry out transactions on its Blockchain. It is fertile ground for use for illegal purposes.
Thus, money laundering, payment for products and services outside the law, and other crimes of different kinds. They can be done outside the surveillance of the authorities through Zcash. What has even led to the withdrawal of this cryptocurrency from exchanges and wallets of the importance of Coinbase. Concerned about the relationship between ZEC and cyber crime.
This despite repeated efforts by the founders of Zcash to make it clear that their cryptocurrency does not support crime. Rather, it aims to give users power over their own data. A vision that they have not managed to be accepted by the entire crypto community, much less by the State security forces.
Despite the reputation it has due to its use by organized crime. Zcash is supported by several of the leading digital wallets on the market. Among them of course Ledger, Atomic, and Jaxx.
Reviewing Zcash provides us with a unique opportunity to talk about the dangers and liability in the crypto world. Especially when it comes to issues like privacy and cyber crime.
In general, we all recognize that privacy and the proper handling of individual data is a central issue of our time. However, there must be limits within which the right of individuals to handle their personal information. Do not conflict with the right of other individuals to your personal safety.
When the right to privacy is carried so far as to hide necessary information from the State security forces. We are putting society at risk by facilitating illegal activities under the cloak of data protection. Which in any case should be a limit when developing new functionalities for cryptocurrencies.
We wish to say thanks to the author of this short article for this amazing material
Zcash in review