Beginner’s Guide to Zcash: Anonymous Privacy Coin

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While the majority of cryptocurrencies show your complete payment history on a public ledger, Zcash aims to deliver privacy to users. This is the very first permission-less and open cryptocurrency that can completely protect transactional privacy via zero-knowledge cryptography. Zcash is a type of open-source and decentralized cryptocurrency that has incredibly strong protections for privacy.

Zcash uses peer-reviewed cryptography research and has been built by an engineering team specializing in security. It uses an open-source platform that was based on the Bitcoin Core codebase, which has been rigorously tested.

ZCash Website

Who Created Zcash?

The team of engineers, scientists, and advisors at ZECC worked to develop and launch the complete Zcash protocol. The team behind Zcash includes nearly all creators of Zerocoin protocol and all authors of Zerocash protocol. The team behind Zcash is made up of Scientists, engineers, advisors, investors, and outside counsel. The founder and chief executive officer, Zooko Wilcox, has over 20 years’ worth of experience working with open and decentralized systems, information security and cryptography, and startups.

ZCash Team

The scientists include a professor from the Computer Science Department at Technion-Israel Institute of Technology, faculty in computer science at UC Berkley, a PhD student in cryptography and computer science at John Hopkins University, an assistant professor at John Hopkins Information Security Institute with numerous awards for research, a computer security PhD student at the same university, a faculty member from the Tel Aviv University’s School of Computer Science, and a PhD student in computer science at MIT. The team also includes nine engineers and seven advisors, including those from Bitcoin and Ethereum.

There is also a Zcash Foundation, a nonprofit entity that improves and maintains the Zcash protocol to further the interests of all users, both current and in the future. Over four years, the foundation will receive 1.44 percent of the monetary base to complete this work. The Zcash Foundation launched in March 2017.

How Does Zcash Improve Security?

Zcash features shielded transactions so the blockchain doesn’t show the sender, recipient, or value of the transaction. The developers explain it this way: Think of Bitcoin as an http for money, in which case Zcash would be https, a secure transport layer.

For cryptocurrency units to be equally interchangeable, they have to unlink from their specific history, ensuring any unit has the same value as others. Zcash allows for this fungibility in cryptocurrency via its ability to unlink shielded coins, separating them from their history shown on the blockchain.

Zcash essentially combines the benefits of anonymity and confidentiality from the world before digital currency with all the advantages associated with the public blockchain.

It is important to note that because Zcash uses an open-source protocol, even the Zcash Company cannot control its distribution or mining or access the information in shielded or private transactions. This adds yet another layer of security for users, keeping their personal information and transactions truly private.

How Does Zcash Work?

Zcash works by encrypting the information within shielded transactions. As the payment information isn’t visible due to encryption, the protocol relies on a new cryptographic method. This is zk-SNARK, a zero-knowledge proof construction. The team of cryptographers behind Zcash developed this proof, getting inspiration from recent cryptography breakthroughs. The system allows for encryption, while the zk-SNARKs prove no one has stolen or cheated.

ZK-Snarks Guide

When using Zcash, the system is very similar to Bitcoin. The main difference is that users can choose to encrypt or shield their information. Zcash supports transparent and shielded addresses, so you can choose whether you want to send the Zcash publicly or privately. Payments can even be sent from a shielded address to a transparent one or vice versa. In the first situation, the received balance will be visible, while it will be hidden in the second.

Based on the wallet address, it is easy to tell whether the address is transparent. If the address begins with “t,” it is transparent and functions just like Bitcoin. If it begins with “z,” it has the privacy enhancements that come from zero-knowledge proofs and is a shielded address. You can also use Zcash with multi-signature transactions, but these will not include the enhanced privacy. Any type of transaction that can be done on Bitcoin is also supported with Zcash.

What New Technology Does Zcash Use?

To better serve clients, Zcash uses new applications, pioneering the world of cryptocurrency. This innovation is particularly true in terms of zero-knowledge proofs. Zcash takes the existing blockchain technology and then applies cutting-edge cryptography. The zero-knowledge proofs allow for transactions that are fully encrypted to still receive confirmation as valid. That property allows for the construction of new classes of applications for the blockchain.

One of the most important technologies in Zcash is zk-SNARKs, and Zcash is the very first application of these that are widespread. Zk-SNARKs are a novel type of zero-knowledge cryptography. Zk-SNARK represents Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. This is a proof construction that allows the system to prove it possesses information (in this case, the secret key), without having to actually display it. It also doesn’t require any interaction between the verifier and prover.

How Do You Use Zcash?

To use Zcash, you will first need to ensure you have a wallet for it. There is an official Zcash client built for Linux users. Community members have created modified versions of it for MacOSX and Windows. You can also opt for a third-party wallet application.

ZCash Wallets

Another option for storing your ZCash is the Rahakott Multi-Currency wallet which allows you store different coins such as Zcash, Bitcoin, Litecoin, Bitcoin Cash and Dash. It’s an online wallet which allows you to create as many wallets and addresses as you need and access them securely using 2FA authentication as well as generating a backup seed should you need to recreate the wallets.

Zcash Wallet

If you are storing a significant amount of ZCash, we recommend a Hardware wallet, the Trezor and Ledger wallets both support ZEC.

You can then get Zcash either by purchasing it via an exchange or mining. There are several dozen exchanges that include Zcash. Companies who want to accept payments in Zcash can contact the developers for assistance. Users can also get involved in the community via the forum or community chat.


For those who appreciate the convenience of cryptocurrencies, like Bitcoin, but would like additional privacy, Zcash offers an excellent alternative. Since it provides all the same functions as Bitcoin with the option of shielded addresses, it can easily be used in a similar way without sacrificing the privacy of users. As such, it should have a bright future and expand. The use of innovative technologies also shows promise as these methods expand and Zcash grows in popularity.

Useful Links

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Editor-in-Chief of Blockonomi and founder of Kooc Media, A UK-Based Online Media Company. Believer in Open-Source Software, Blockchain Technology & a Free and Fair Internet for all. His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More. Contact

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