As part of a continual bid to bring more currencies onto their trading platform, CEX.io has announced the release of Zcash as a trading option on their platform. The trading platform has recently added other currencies such as Dash, and will likely continue to do so as a means of expanding their product offering and making it more appealing for aspiring traders.
Almost every cryptocurrency has its unique offering, or the investment thesis behind it that gives investors reason to put money into it. Zcashs competitive advantage is the privacy and selective transparency it offers. In the Zcash blockchain nothing is visible except for the time of making a transaction. The sender, recipient and the amount sent remain private.
Even though Bitcoin is relatively private compared to a bank transaction, the public nature of the blockchain tends to reveal where the money is getting sent and who by. This makes it quite easy to track funds, and should give pause to those who say Bitcoin is just a means of laundering money. It is not that hard for authorities to keep track of where all the money is flowing and what is being done with it. Silk Road was really an opportunity because of the early adopters having such a strong competitive advantage.
So with Zcash having a strong advantage in terms of privacy, it tends to attract a certain type of user. There are lots of people who value the idea of the government not being able to track them and their use of funds. This could be interpreted as their desire to hide suspicious behaviour or the intention of performing illegal acts, but is often just a sign that privacy has become a priority in this digital age where everyone knows what everyone else is up to. Especially with all the fears about the government monitoring everyone in an illegal manner.
Whats it all about?
Zcash originated as Zerocoin, which was meant to serve as an improvement on Bitcoin in terms of privacy and anonymity. Zooko Wilcox-OHearn, the inventor of Zcash, founded the cryptocurrency in October 2016. The name evolved over time from Zerocoin to ZeroCash, and eventually becoming Zcash.
It is important to note what exactly the privacy features of Zcash are. The blockchain is still published publicly, but with every transaction is the option to obscure certain information. As an additional feature, there is the option of selective disclosure, which allows participants to have an auditable trail of funds for submission to the government. This makes it possible for someone to engage in private transactions while complying with anti-money laundering laws and tax regulations.
Bitcoin vs. Zcash
Everyone knows that in a Bitcoin wallet you have a private and public key. One is for sending Bitcoin, and the other is for receiving. With Zcash, each user has a private and a transparent address, and can use either at will. The type of transaction varies based on whether one or both of the participants are using their private addresses.
The question would then become how the blockchain is verified if neither party has given their private address. This is where the concept of zk-SNARKs is introduced. Zk-SNARKs are proofs that allow one to prove certain information without revealing this information. It solves the double-spend problem without revealing who the sender/receiver is.
All money is equal
Fungibility matters for the key reason that it makes everyones money equal. No history is attached to a certain money, which means it cant be discriminated against and will be treated exactly the same as everybody elses money. Many users of Bitcoin have had the issue of using coins that were previously stolen from other users and then eventually ended up in their wallets. By no fault of their own, these coins become blacklisted and their money becomes essentially worthless. This is one more reason to further the cause of fungibility and create a market where all money is equal.
Is there a place for Zcash?
To be clear, not all currencies are directly competing, they are just filling different needs. Some users will always want coins that are widely accepted, whereas others will care about the privacy aspects, and that will create numerous different segments within the industry. There is expected to be an aggressive amount of competition within these segments, but as one looks to the broader markets, these segments will have less of a reason to compete since they are providing for different customers. Just like hotdogs and hamburgers are never truly competing with each other, Ethereum and Zcash are geared towards a completely different need, making it possible for them to coexist.
There are other cryptocurrencies with similar privacy features, such as Dash and Monero, however Zcash holds the gold standard of privacy. This currency is the most fungible of all the currencies due to the zk-SNARKs, and this makes it impossible for transactions to get blocked just because they come from a certain private key or spender.
Zooko has stated before that the purpose of Zcash is not to facilitate illegal activity, and has continued to develop the currency in such a way that supports these statements. Zcash, much like Bitcoin, is planned to max out at 21 million coins, which will have the same deflationary effect that is expected for Bitcoin at the time of completion.
Zcash is gathering pace
In April 2017, Zcash gained a market capitalization that put it in the top 10 list of cryptocurrencies everywhere. This is a major vote for the power of anonymity, and even though Monero offers similar privacy features, the quality of Zcashs development, as well as the backing it has received from several famous investors, has been enough to bring into the upper echelons of the cryptocurrency world.
CEX.io will continue to add promising cryptocurrencies to their stables as they go through significant growth and aim to create a comprehensive trading platform for everyone who sees the value in blockchain and the cryptocurrencies that are being developed using it.