ZCashZcash is an open-source, decentralized cryptocurrency offering a high level of privacy along with selective transparency of transactions.
What is Zcash?
Zcash is an open-source, decentralized cryptocurrency offering a high level of privacy along with selective transparency of transactions. While Zcash transactions are published and stored on a public blockchain, the sender, the recipient, and the amount of the transaction remain private. As Zcash is an open-source protocol, the developing organization Zcash Company does not control the network, including controlling the distribution or the mining of the cryptocurrency, or have any kind of special access to private or shielded transactions.
How does Zcash work?
In contrast with the Bitcoin network, Zcash encrypts the contents of shielded transactions. Since the payment information is encrypted along with other parts of the transaction, the Zcash protocol utilizes a novel cryptographic method to verify the validity of the transactions.
Zcash uses a zero-knowledge proof construction, a zk-SNARK, which was developed by the Zcash team. zk-SNARKs allow the Zcash network to maintain a secure ledger of balances without disclosing the parties and amounts involved. According to the Zcash Company, instead of publicly demonstrating “spend-authority” and transaction values, the transaction metadata is encrypted and zk-SNARKs are used in the Zcash network to prove that nobody is cheating, stealing or abusing the network.
Other than private transactions, the Zcash network also allows the users to send public payments in a way similar to Bitcoin transactions. By supporting both shielded and transparent addresses, users can choose between private and public Zcash transactions. While sending Zcash payments from a shielded address to a transparent address will reveal the received balance, a payment from a transparent address to a shielded address will protect the receiving value from the eyes of the public.