While everybody knows what Bitcoin is, there are not so many users among non-specialists who have heard about Zcash. Zcash is a fork of Bitcoin, thus, to understand it better, let us check the main features of Bitcoin.
Bitcoin is the oldest and the most successful cryptocurrency in the world. Now, its price is around 56,000 USD, and it is moving upwards.
Bitcoin is decentralized, runs on the blockchain, every transaction shall be confirmed by miners who get a reward for every mined block.
The Bitcoin blockchain is open-source which means that all the transactions can be seen by all users. This coin is regarded as money and performs all the functions of money: it can be bought and sold, exchanged on https://letsexchange.io/ or any other platform, or you can pay with it for goods and services.
Now, when you know what Bitcoin is and what are its specific features, it will be easier for you to understand the Zcash basics of functioning. Zcash is a Bitcoin fork. When we speak about a fork, we mean that the Bitcoin code was taken, and then modified to make it better.
Thus, let us have a look at how the Bitcoin code was modified to bring to life Zcash.
- Transactions performed on any ZEC to BTC exchange are verified based on zero-knowledge proof. It means that neither sender nor the recipient of the funds cannot be tracked. All you can see is that a transaction has happened and the time when it has happened. In this regard, Zcash offers an incomparably higher anonymity level than Bitcoin.
- In the case with Zcash, miners confirm a new block every 2,5 minutes. In the case of Bitcoin, a new block is confirmed within around 10 minutes. In this regard, Zcash is much more convenient if one wants to send funds or to trade.
- Mining works differently. For Bitcoin mining, ASICs are used. For Zcash mining, GPUs or CPUs are used. They are incomparably cheaper. Thus, everybody can mine Zcash.
The Potential of Both Coins
Both Bitcoin and Zcash seem to have some potential in the market. Bitcoin has always been cryptocurrency No 1, while Zcash is among the top 50 cryptocurrencies. However, Zcash has made some advancements that cannot be disregarded.
First of all, its partnership with JP Morgan who wishes to install a zero-knowledge proof protocol on the company`s blockchain is quite promising for both the technology and the coin. It boosts the interest of investors and provides the company a higher credibility level.
Second, the popularity of Bitcoin from which Zcash was forked has also a positive impact on the forked coin.
However, the main benefit of Zcash is at the same time its main drawback. Non-trackable transactions can be easily used for illegal activities. It is difficult to find out whether the origin of Zcash coins is legal or whether it is better to avoid buying specific coins. Zcash though has a solution to this issue. This solution is called the View Key. With it, a transaction can be tracked, and this key can be shared with law enforcement authorities if needed.
Thus, we can conclude that Zcash has some potential to move up.