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Zcash ZEC

Zcash ZEC

Zcash ZEC is a review of the Anonymous Cryptocurrency Zcash.

Confidentiality is a guarantee of personal freedom and security when making online payments. The first Bitcoin cryptocurrency, despite all its uniqueness, is pseudonymous. The BTC blockchain ecosystem is absolutely transparent and anyone can open a web browser and see the balance of any address and the number of completed transactions. Of course, passport data are not published in the distributed registry, and no one will require them from you when creating a personal bitcoin wallet.

The identity of the wallet owner is unknown to the network administration and wallet developers, but it is impossible to hide the rest of the information. Having determined the IP address, you can try to establish the identity of the holder of cryptomonets. This situation did not suit many, and blockchain engineers developed the first truly anonymous Zcash payment network. What kind of cryptocurrency it is and how it guarantees the privacy of transactions, we will tell you now. So, let me introduce ZEC, a cryptocurrency that Edward Snowden and Wikileaks employees called the most interesting altcoin.

Features

Zcash is the first decentralized network in which a new form of cryptography, zk—SNARK, is used to ensure confidentiality. Anonymous transfers are encrypted and inaccessible in the Zcash Blockchain Explorer, but despite this they are checked for validity according to the consensus rules of the network, using the "zero disclosure" proof.

Each user of the network, thanks to ZK-Snark, can confirm ownership of certain data (for example, a private key), without disclosing them and constantly interacting with the validator. The zk-SNARK proof algorithm compiles the hash sum of the transaction into a scheme for solving algebraic equations. A quadratic asymmetric program (QAP) developed by a group of cryptographers in 2013 is used to verify the authenticity of the arithmetic scheme. QAP generates a random verification point, which is not known in advance to the sender, nor to the validator. For this purpose, such forms of cryptography as homomorphic encryption and elliptic curve pairing are used.

The recipient of the funds creates a set of keys or a key tuple, it includes

Expense Key;

View Key;

Billing address.

When creating a hidden transaction, the key tuple is not available in the browser, information about these keys is provided only on request.

The sender of the hidden transaction forms a note that includes:

Payment key;

Transfer amount (calculated in Satoshi);

Zeroing set;

Transmission trap.

The note confirms that the amount indicated in it can be spent by the recipient who has an expense key that corresponds to the payment key. Notes created using the JoinSplit technology are stored in an incremental Merkle tree of a given depth.

In the blockchain, a certain part of the chain is assigned to each complete node, forming a tree in which each block is connected to the previous one using the hash block header. The path from the root to the nodes in the structure of valid blocks is called a valid block chain. Each complete node creates a function that resets all elements of the array, which is logically related to the state of the tree. Unique zeroes, which can also be found in the JoinSplit descriptions, protect against double spending. The zeroizer is never duplicated in the blockchain.

Zcash increases user privacy by encrypting information about the participants of the transaction and the amount of the transfer with one signature, published in the public registry for transactions using secure addresses. Zcash does not encrypt data for multi-signature, does not protect against correlations in public transactions, and does not hide the IP address of the sender and recipient.

When sending funds to the Zcash blockchain ecosystem, more preliminary work needs to be done. But the transaction itself can be confirmed within a few seconds, and its volume will not exceed several hundred bytes.

Main features of the ZEC crypto network:

Transactions with a low commission fee (0.0001 ZEK);

Privacy of addresses and transactions;

Encrypted fields for notes;

Viewing keys for voluntary disclosure of payment information;

Fixed validity period of unprocessed transactions (20 blocks);

The possibility of using multi-signature.

If the transaction is not confirmed within an hour, it becomes invalid, and the funds are returned to the sender.

Public keys are divided into two types:

Z-addresses are encrypted, always start with the letter z;

T-addresses are open. start only with t.

Information about the transfer between Z wallets and the amount of the fee is available in the public blockchain, but there are no addresses, not the transaction amount. The owner of the wallet, if necessary, can inform the IP address and transaction information to a third party, for example, regulators for auditing and ensuring the requirements of local legislation using the viewing key.

Transactions between two t-addresses are transparent and all information about them is publicly available, just like in the bitcoin network. Open and closed addresses easily interact with each other and there are no problems with transactions from, Z to T, or vice versa.

Transactions in the Zcash cryptocurrency ecosystem can be divided into 4 types:

Public: t-address/ t-address;

Protected: t-address/z-address;

Unmasked: z-address/t-address;

Confidential: z-address/z-address

When making a secure transaction, the sender can transmit the necessary information to the recipient in encrypted form using a memo field for notes. At the same time, the owner of the z-address can provide auditors with the details of the completed translation and all the content of the memo field to check for compliance with regulatory standards. When using t-addresses, it is possible to make a transaction with a multi-signature. The Sapling network upgrade has provided new secure addresses to improve efficiency and functionality. Legacy addresses started with "zc", and new Sapling addresses start with "zs". More detailed information about the various types of transactions of the Zcash altcoin can be found on the developer's website https://electriccoin.co/ru/blog/anatomy-of-zcash .

The Zcash cryptocurrency has an open source code developed by a team of computer security specialists and has passed an independent audit.

In the spring of this year, the ZCash Developer Alliance (ZDA) was created under the auspices of the Electric Coin Company (ECC). A team of specialists will work on the implementation of privacy options in the Lightning Network system and the blockchains of Ethereum, Cosmos and some other projects. On April 18, 2022, the developers of Zcash plan to implement NU5 updates. This is the largest update of the Zcash protocol since the launch of the project. NU5 consists of a number of significant improvements, including unified addresses and the deployment of Halo 2 on Zcash. Halo 2, is an improved version of the zk-SNARK protocol, written in Rust, which eliminates the need for trust configuration and increases the bandwidth and scalability of the Zcash network.

The following companies became members of ZDA:

  • ECC;
  • Agoric;
  • Bolt Labs;
  • ConsenSys;
  • Iqlusion;
  • Kyber;
  • Thesis.

The functional compatibility of Zcash with the protocols of the Ethereum and Cosmos cryptosystems is the primary task of the alliance.

The Ethereum Foundation team is exploring options for implementing anonymous transactions in Ethereum 2.0, and Bolt Lab employees are working to increase the confidentiality of the Lightning Network protocol. According to the head of Bolt Labs Ayo Akiniele, alliance specialists are looking for a single solution that can be adapted to any ecosystem.

Bolt Labs has already launched a test network for anonymous transactions of the Bitcoin cryptocurrency, called zkChannels.

ZDA is also working on providing access to the Zcash protocol to companies that do not use the Zikesh cryptocurrency, but are interested in ensuring anonymity.

The development team

The Zerocash protocol, on which the ZEC cryptocurrency is based, was created by 4 groups of blockchain engineers representing:

  • Johns Hopkins University;
  • Massachusetts Institute of Technology;
  • Technion (Israel Institute of Technology);
  • Tel Aviv University.

The launch of the Zcash crypto network took place on October 28, 2016. The executive director of the project is Zuko Wilcox, a computer security specialist from the USA. The team consists of programmers, engineers, designers, programmers, scientists, lawyers, financiers.

Special mention should be made of: Nathan Wilcox, Dira Hopewood, Jack Grieg, Christina Garman, Ian Myers. The list of project consultants includes the creator of the Ethereum cryptoplatform Vitalik Buterin.

How Zcash is created, mining

The Zikesh ecosystem works on the Proof-of-Work consensus algorithm. Miners are engaged in transaction processing and generation of new crypto blocks. This is the name of the owners of computing equipment that support the operation of the blockchain network for a reward in cryptocurrency.

Zcash mining has long been carried out only on specialized devices. The owners of the rigs used Nvidia to mine Zcash, switched to other coins. Creating a new block takes about 2.5 minutes.

The hashing algorithm used for mining Zcash is called Equihash. It was developed by programmers Alex Biryukov and Dmitry Khovratovich on the basis of the theory of computing machines. When creating the Zcash algorithm, much attention was paid to protecting against collisions of cryptographic hash functions called the "Birthday Paradox" and other potential blockchain vulnerabilities.

At the end of 2019, a network update codenamed Blossom took place on block 653,600 in the Zikesh ecosystem. Its implementation made it possible to reduce the block generation time to one minute and 15 seconds and increase the network bandwidth. At the same time, the reward for the block was reduced to 6.25 ZEC, and the amount of the processing fee remained the same. In the fall of 2020, another halving took place on the Zikesh network, and now the reward for the block is 3,125 ZEC.

In the future, the creators of the Zcash cryptocurrency plan to add support for sharding technology and then the system will be able to process "thousands or even millions of financial transactions per second." But implementation may require a radical change in the entire blockchain ecosystem. And then the period of using open t-addresses will most likely be completed. The new chain will be ultra-fast and completely anonymous.

In January 2020, a vote was held in the community of the privacy-oriented digital currency Zcash. A new scheme for distributing rewards for mining in the ecosystem was put on the agenda. Miners will still be deducted 80% of the premium for each block found. Employees of the Electric Coin Company, which oversees the development of the Zcash cryptocurrency, will receive 7%, and another 5% will be transferred to the Zcash Foundation. It was decided to direct the remaining 8% of the award to the creation of grants to attract third-party programmers. The new structure of distribution of payments will be introduced in the fall of this year, if the Zcash Foundation and Electric Coin Company approve the adopted changes.

Pools

ZEC cryptocurrency mining is supported by 19 pools of collective mining. The most powerful ones are:

Poolin.com — it accounts for 28% of the network hashrate;

Viabtc.net — a stable multi-currency pool with a large number of participants;

Antpool.com — the official pool of the largest manufacturer of ASIC miners Bitmain.

You can see the full list of resources for mining Zcash at https://miningpoolstats.stream/zcash

Programs

At the time when Zcash was mined on GPUs, miners used Claymore's Zcash Miner, EWBF Miner and dstm's ZCash/Equihash Nvidia Miner programs. The development team has released its own version of crypto mining software for Linux OC.

Since mining on video cards is absolutely unprofitable, it makes no sense to talk about program settings. Quite a lot of forks have been released on the Zcash algorithm, which are successfully mined on green GPU devices. The profitability of mining a particular model of equipment can be calculated on the WhatToMine online calculator.

Equipment

The most productive mining devices are ASICs:

  • Bitmain Antminer Z15 — profit of $ 12.79 per day (at an electricity price of $ 0.05).
  • Bitmain Antminer Z11 — profit of $ 2.99 (at an electricity price of $ 0.05).
  • Innosilicon A9++ ZMaster — profit 3.01 $ (at the price of electricity 0.05 $).

The income depends on the current value of the ZEC coin on the market. You can order the equipment directly on the manufacturer's website or from regional dealers. If you have not worked with ASICs before, please note that devices on air-cooled integrated circuits, due to very high noise levels, cannot be kept in residential premises.

How to purchase cryptocurrency

The cryptocurrency is traded on 100 exchanges. The largest of them are

  • Binance;
  • Bitfenix;
  • Coinbase Pro;
  • Kraken;
  • Huobi Global;
  • Pemex.

We recommend using only popular and reliable exchanges to buy any cryptocurrency.

Conclusion

The main reasons for the fall of the Zcach exchange rate are stagnation in the market, high inflation and the tough position of regulators in relation to anonymous cryptocurrencies. The South Korean exchange Upbit and the British division of Coinbase conducted a delisting of the Zcach cryptocurrency, the same intention was announced by the OKEx trading platform. However, then the hype subsided, and now the OKEx exchange, which, by the way, recently rebranded and changed its name to OKX, is quietly trading Zikesh, as well as the Coinbase Exchange platform, and dozens of other trading platforms.

Lamassu, a crypto ATM provider, has integrated Zcash privacy features, giving ATM users the opportunity to receive ZEC to wallets with shielded "Z-addresses" and send funds from a secure address to a Lamassu ATM for cashing out. Link to the source of information https://www.cryptoninjas.net/2021/04/21/lamassu-crypto-atms-offer-shielded-zcash-zec-support /.

There is no talk of a total ban on confidential digital assets yet and, most likely, the authorities will have to come to terms with their existence. As if to confirm our words, the Coinbase crypto exchange has provided customers from the state with the opportunity to deposit and auction the anonymous Zcash currency in New York state. And one more curious fact. The founder of the Ethereum cryptocurrency Vitalik Buterin said that in addition to ETH, he holds digital currencies in his investment portfolio: Bitcoin Cash, Dogecoin and Zcash.

Timeline

April 18, 2022

he developers of Zikesh plan to implement NU5 updates.

October 28, 2016

The launch of the Zcash crypto network took place

Patents

Further Resources

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References

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