While cryptocurrencies continue to be the hype, a newfound interest emerges in private coins. Sure, Bitcoin transactions don’t identify personal information, but they aren’t completely anonymous because the transaction history is in public view on a blockchain, making it possible for others to reveal people’s identities through coin movements and address details. But now, it’s all about the privacy of users. That’s where privacy coins that use cryptographic techniques to obscure transaction details and protect users’ privacy take the stage. This fascinating technology is maintained by a network of anonymous validators. To put it simply, privacy coins successfully protect confidentiality by concealing the flow of cryptocurrencies across their networks. And if you’re a crypto geek like us, the chances are that you’ve heard of the debate between Zcash and Monero.
Zcash vs. Monero: What You Need to Know
As two of the largest privacy-focused altcoins on the market, Zcash and Monero protect senders’ and receivers’ anonymity, along with amounts and balances. However, there’s a reason why people choose one over the other. Despite several similarities, both Zcash and Monero have distinct disparities and underlying protocols suited for different purposes.
Overview of Zcash
It all started when a professor and two of his students—Matthew Green, Ian Miers, and Christina Garman—at Johns Hopkins University teamed up to create a privacy-focused extension to Bitcoin named Zerocoin. The trio collaborated with other scientists and formed the Zerocoin Electric Coin Company, called the “Zcash Company,” but later rebranded to Electric Coin Company (ECC), dropping the “Zerocoin.”
Zcash was launched in 2016 to fix the privacy problems that Bitcoin was facing during that time. Built on the Bitcoin Network, Zcash utilizes cryptography to provide users advanced privacy. The Zcash team made several alterations to the Bitcoin codebase, one of which was adding zero-knowledge proofs to ensure that transactions were carried out by concealing sending and receiving addresses along with the amount transacted. In 2017, the Zcash Foundation was established to create and support financial privacy infrastructure, serving the Zcash blockchain and protocol users.
Zcash and Anonymous Transactions
Although Zcash is built on the original Bitcoin code, it differs from the Bitcoin Network by applying the zk-SNARKS, a zero-knowledge privacy protocol that lets users remain anonymous. So, while Bitcoin boasts transparent transactions, Zcash is all for anonymous transactions. Unlike Monero (but more on that later), the Zcash network allows users to choose between transparent and shielded transactions, allowing them to complete transparent transactions or make them completely private.
To carry out a shielded transaction, users must send their payments privately. Since privacy is optional with Zcash, users must choose between shielded addresses and transparent addresses. The latter is similar to the ones in the Bitcoin Network, whereas the former makes the transaction details completely anonymous.
Does Zcash Have a Maximum Supply
As of writing, Zcash boasts a maximum supply of 21 million coins. Out of the total sum of the Zcash coins, 58% are already in circulation, making it a whopping 12,189,000 million. With more activity by the day, the Zcash Network proves to be a healthy one. Users utilize Zcash for several purposes, i.e., to purchase goods, services, or even exchange to Euros, US Dollars, or any other currencies.
The Zcash team focuses on research and experimentation, which makes the altcoin rewarding for the core team. Developers, investors, and the non-profit Zcash Foundation receive 20% of the block reward.
Zcash Trading Pairs
As of March 3, 2022:
|Yobit||ZEC/BTC||879 BTC||0.002 BTC|
Advantages of Zcash
Like every altcoin, Zcash comes with a slew of advantages and some disadvantages, and you get to decide whether or not it’s a suitable investment for you. Crypto forecasts predict that things are looking great for Zcash since it’s intriguing new traders to break into the market, as well as established traders looking to expand their horizons.
– Zcash coin is easily exchanged for another
– Guaranteed high prices due to the fixed supply of Zcash
– Several levels of anonymity to choose from
– The Zcash blockchain is ASIC resistant
– A fungible privacy coin
– Good long-term investment due to being currently undervalued
– Highly secure zero-knowledge proof technology
– Shift from public to private transactions
– A block time of only two and a half minutes.
While crypto experts and analysts have predicted a bright future for the coin, it’s always wise to also weigh on the cons before deciding to buy Zcash, just like with other coins. A few of the downsides include:
– Restricted to CPU mining
– Mainly designed for Linux users
– Zero-knowledge proof is not unique to Zcash, meaning other cryptocurrencies could potentially implement it
– A privacy coin could potentially raise suspicion.
Why You Should Buy Zcash
Zcash is a promising token launched in 2016. It allows you to make highly secure transactions and has already amassed a whopping $1.2 billion market cap. If you wish to build a profitable crypto portfolio, this is an excellent place to start since the market cap will only increase from here.
Firstly, Zcash’s privacy is what’s needed for cryptocurrency mass adoption. Zcash is a public blockchain with added privacy aspects designed to remove as much data from public view as possible — something that Bitcoin fails to offer. Zcash solves this problem with zero-knowledge proofs and shielded transactions by giving you total control and ensuring a private transaction despite being based on the Bitcoin protocol. As a result, Zcash attracts European businesses looking for GDPR compliant cryptocurrency payment services.
Secondly, Zcash’s low transaction costs attract both new and established traders. In perspective, Bitcoin’s and Ethereum’s high transaction costs make small transactions not worth, whereas Zcash guarantees reasonably low transaction fees even in the long run.
Limited Zcash Coin Supply
Coin supply is yet another factor that puts Zcash in a top-tier position. We all know how it goes— the value is determined by supply and demand. So, with an ever-rising demand, the chances are high that Zcash will boast the same prices as Bitcoin, suggesting it might be the right time to buy Zcash. The long-term Zcash price predictions disclose that the privacy-focused altcoin is expected to reach the $400 mark in 2024, pass the $500 mark in 2026, and skyrocket to almost $800 in 2028. Moreover, Zcash is available on many crypto exchanges, making it easy to buy it and store Zcash securely in digital wallets.
Overview of Monero
Monero first emerged when the Bytecoin network hardforked in 2014. There was much controversy over Bytecoin—80% of the privacy-focused altcoin had been mined before its release. The pre-mining led to disagreements between the project’s developers and the community, which in turn led to the hardforking of Bytecoin as Monero.
Involving highly sophisticated cryptographic schemes, Monero relies on Proof-of-Work mining to fulfill distributed consensus. Monero runs on an opaque blockchain and hides transaction details to facilitate secure, private, and untraceable transactions. Let’s break it down piece by piece.
Monero and Private Transactions
All the transactions in the Monero network are private by default. Monero utilizes a three-prong strategy to privacy: ring signatures, ring confidential transactions, and stealth addresses. Ring signatures hide the spent outputs to protect a user’s privacy in the input side of a transaction; ring signature transactions, also known as RingCT, hide the amount being sent, and stealth addresses disguise the receiver.
The underlying protocol for Monero is based on CryptoNote, which groups several transactions and uses ring signatures and one-time keys to hide the destination and origin of the transaction. Monero transactions are validated through the Moner network that runs a unique Proof-of-Work consensus algorithm called RandomX.
The Monero network exclusively deals with the security of users. It utilizes a combination of a sender’s account keys and clubs them with public keys on the blockchain to produce a ring signature, a type of digital signature in which possible signers are merged together to produce a distinctive signature that can authorize a transaction. This makes it virtually impossible to reveal which public keys were used to generate the ring signature. A Monero ring signature is composed of the actual signer, combined with non-signers to form a ring.
Why Monero Implemented Ring Confidential Transactions
Before implementing ring confidential transactions, Monero used to divide the transaction amounts into denominations to make sure that a sufficient number of ring members were found on the Monero network. Nonetheless, complete privacy wasn’t guaranteed since outside parties could see the transacted amount. To solve the issue, Monero implemented ring confidential transactions.
Monero maintains decentralization by implementing protocol changes to its mining algorithm along with many other features every six months. As for mining Monero, the process is usually made in pools and the cloud. Unlike Zcash, Monero has no maximum supply of coins.
Monero Trading Pairs
As of March 3, 2022:
Advantages of Monero
As a secure, fungible, and untraceable digital currency, Monero ensures the users’ complete and total privacy, and just like with Zcash, the future is looking pretty good for the altcoin. Let’s look into Monero’s pros and cons to help you understand how you can benefit from it.
– Stealth addresses
– Ring signatures
– All the transactions are completely private
– Supported by more than 40 cryptocurrency exchanges
– A block time of only two minutes, making it almost five times faster than that of Bitcoin.
While the abovementioned benefits have resulted in Monero’s rapid growth, there are also certain disadvantages to consider:
– Dark web marketplaces have started using Monero for transactions instead of Bitcoin
– It’s used for fraudulent purposes since it’s completely untraceable
– Despite being resistant to ASIC, three mining pools own 3% of the hash rate
– Few crypto wallets support Monero
– Storing Monero is a lot more difficult than other cryptocurrencies, explaining the lack of its broader adoption in the crypto space.
Why You Should Buy Monero
Monero has been growing rapidly since it first launched, and with a market cap of $2.6 billion, users are only increasing by the minute. Algorithm-based forecasts predict a positive outlook, with Monero’s price going up to $261.55 at the beginning of 2023 and rising to $702.5 by the time 2027 rolls in. This prediction is supported by several Monero forecasts expecting the altcoin to be valued at $191.33 throughout 2022, around $317 in 2025, and $500 in 2028. In any case, it looks like an uphill climb for Monero.
Zcash and Monero Transaction Fees
The Zcash average transaction fee is priced at 0.00001 ZEC. You’ll pay the same fee by default for both transparent and anonymous transactions, not having to reimburse for your privacy. Zcash doesn’t allow you to customize and set your own transaction fees. Mining incentivization on the Zcash network is not a problem at all.
In contrast, Monero transaction costs can come with a hefty price tag since the altcoin shares scalability issues with Bitcoin. At its peak, the cost of sending Monero was recorded to be a little over $20.
Similarities Between Zcash and Monero
It goes without saying that privacy and security are in the lead when comparing Zcash to Monero. Both altcoins have the initial aim to solve transaction privacy issues, but each of them takes a different approach to the problem.
Monero and Zcash have displayed a similar price pattern since their launch. Monero experienced an upward tendency in late 2016, which skyrocketed in 2017. Around 2018, the all-time high of Monero was around $500 per coin.
Zcash price was initially pretty steady, but its value started increasing a little after Monero’s in 2017 and was pretty consistent with Bitcoin. Whenever Bitcoin’s value dropped, Zcash followed suit.
Differences Between Zcash and Monero
Along with similarities between Zcash and Monero, two of the most significant privacy coins on the market, there are also vast differences concerning how they maintain users’ privacy while making transactions. Monero Network uses privacy-enhancing technologies to ensure the complete privacy of every transaction and ensure they are entirely anonymous. ZCash is also focused on privacy, allowing users to choose between making shielded or transparent transactions. Monero transactions are private by default, while ZCash transactions are private when users choose them to be such
Another crucial difference is that in contrast to Monero, Zcash is regulatory-friendly because transactions can be sent publicly on the network. This factor influenced crypto exchanges to add Zcash to their servers. Instead, Monero has come under increased scrutiny from regulators.
The two also have different speeds – new blocks are created every two minutes on the Monero network, whereas Zcash’s block time is around two and a half minutes.
Perhaps the most intriguing distinction between the two is their respective teams. Monero’s team is essentially a mystery — so far, only two of the lead developers are known to the public. Zcash, in contrast, has an open team with some of the biggest names in the crypto and blockchain space serving as advisors. Their contrasting natures — one open to the world and the other hidden from the public eye — are exactly what makes these two of the most exciting projects to keep up with.
Finally, it all comes down to preferences and what you intend to do with the altcoins. Many opt for Monero’s unlinkable transactions; others are attracted by Zcash’s focus on cryptography research and development. At the end of the day, whether it be Monero, Zcash, or any other altcoin, it’s up to you to decide whether you want to go back and forth between transparent and private transactions or go full-on private.
Remember to acquire a hardware wallet or a software wallet that allows you to keep your private keys and a seed phrase for storage purposes.