In this series of articles I want to put a spotlight on a specific cryptocurrency and write about the details in all these aspects:
Aim of the currency
Technical details
Market position
Forecast
The cryptocurrency in focus will be chosen at random, although I am for sure following all recent news in the cryptocurrency world and am taking always one of the most interesting ones.
In this 2nd article of the series, the spotlight will be on ZCash
What is this currency about? What does it do differently than the rest?
Where is the unique selling point and at what audience is this coin targeted.
All that questions and more will be answered in the following paragraph.
ZCash is advertising itself with the statement "If Bitcoin is like http for money, ZCash is like https - a secure transport layer".
To cut a long story short, Zcash implemented a method of transferring money in a private way, this allows all transaction data, sender, receiver and amount to be private. This is made possible by using a very specialized cryptography called zk-SNARK, which allows verifying the correctness of a transaction without knowing the transaction details.
Apart from this private transaction possibilities, it is also possible to transfer money in a normal transparent way, the differentiation is already done on address level.
ZCash bases on the code of Bitcoin, but with a lot of additions especially in the cryptography section.
So like Bitcoin ZCash is PoW (Proof-of-Work) Coin, meaning that the new blocks are getting mined by using computational power. The mining uses an algorithm called Equihash, which is deemed ASIC-Proof and can best be mined with modern GPUs (graphic processing units).
It is still possible to have a positive ROI when mining ZCash, even though prices have settled a bit already if you want to check for yourself take a look at this link.
It also shares the same maximum amount of coins, 21 Million ZEC can be mined. 10% of the mining rewards are going to be distributed to the stakeholders within the ZCash Company as founders reward.
The main difference between ZCash and Bitcoin is basically the possibility to send or receive money in a private way. This means that all of this transaction data is stored encrypted on the blockchain, only readable by the sender and the receiver.
At the time of writing this article(10/22/2017) ZCash is placed 18th in market capitalization, with the total value of 520.582.844 $.
What can be said for sure is that currently a concentration of investments is taking place in Bitcoin, therefore most altcoins have recently experienced quite a drop in price. Reasons for this can be seen in the upcoming fork of Bitcoin and Bitcoin Gold. It seems to be very attractive for investors to get another coin for no additional price.
This movement can be clearly seen by taking a look at the 1-month chart.
If we are looking back further than that we see the general rise in April-July (happened all over the crypto market) and a quite bumpy road from there on. The Spike that can be seen ending September has been caused by the listing of ZCash on Bithumb, a big south Korean exchange.
Generally, the idea behind ZCash is absolutely valid. Having the possibility to keep transaction data private is for sure a big asset in the crypto market. Just recently Ethereum also implemented this into the toolbox, but up to now, all transfers on Ethereum are as private as they have been before.
This clearly shows that there is a market for secure transactions.
ZCash itself currently focuses on bringing up a new generation crypto, enabling also smartphone users and they are also still working on the connection between ZCash and Ethereum.
Once the Bitcoin hype is fading again, after the fork, I personally think that investors will share again some love with Zcash.
ZCash was the first cryptocurrency in which you are able to hide transaction details and encrypt the entries on the blockchain. This is a huge advantage compared to Bitcoin, where all transaction details are stored readable on the blockchain.
If the ZCash team can deliver the new generation crypto fast and enable smartphone users, there is for sure going to be a raise in price.
Last but not least there are also some drawbacks and they should not be unmentioned:
PoW Coin, mining can be seen as a waste of energy.
10% Founders reward on mining directly going to ZCash Company.
Privacy of transaction has been also viewed with criticism.
