What is ZCash (ZEC)? Explained for Newbies

The cryptocurrency market is filled with coins that promise speed, decentralization, and innovation. However, one topic that never seems to stop resurfacing is privacy. While Bitcoin is celebrated as the pioneer of digital currency, every single Bitcoin transaction is visible on its public blockchain. 

This lack of privacy has prompted many to seek an alternative that offers stronger protection for sensitive financial information. For individuals and businesses alike, the idea of every payment being permanently recorded and traceable raises concerns about security, surveillance, and economic freedom.

This is where Zcash (ZEC) comes into play. The ZEC cryptocurrency stands out thanks to its privacy-focused blockchain technology. Zcash is designed to provide users with financial confidentiality without compromising the benefits of blockchain technology. But what exactly is ZCash, how does it work, and why has it garnered significant attention in the crypto market? This guide will unpack all you need to know.

What is Zcash (ZEC)?

ZCash is a decentralized cryptocurrency built to give users control over their financial privacy. The network was designed as an improvement on Bitcoin’s model by adding optional privacy features. This means that users have the option to use transparent addresses for public transactions. 

They can also use shielded addresses for private transactions, where the sender, receiver, and amount data are encrypted. This flexibility makes ZCash different from other privacy coins, such as Monero, where every transaction is private by default. With ZCash, you choose how much privacy you want.

At its core, Zcash operates on a decentralized, open-source blockchain, similar to Bitcoin. However, unlike Bitcoin, which makes every transaction public, Zcash’s cryptographic protocol enables the verification of transactions without revealing the underlying information, thereby providing strong privacy. 

Brief History of Zcash (ZEC)

Zcash (ZEC) has a history dating back to 2013, when researchers proposed a protocol called Zerocoin. This idea later evolved into Zerocash, which introduced more advanced cryptography for hiding transaction details. 

Building on this foundation, cryptographer Zooko Wilcox, the founder of Zcash, launched the project in October 2016. He and his team developed it through the Electric Coin Company (ECC), the organization leading the project.

The Zcash Foundation was created in March 2017 with 273,000 ZEC from the “Founders Reward.” The foundation also organized the Powers of Tau Ceremony, a significant event to create secure cryptographic parameters for Zcash.

Since its launch, Zcash has gone through several upgrades. In 2018, the Sapling upgrade significantly enhanced the efficiency of shielded transactions, making them faster and more user-friendly. Later, the Heartwood and Canopy upgrades further enhanced scalability and security.

How Does Zcash Work

At its core, Zcash operates similarly to Bitcoin. It’s a digital currency that runs on a decentralized blockchain, meaning no single company or government controls it. Transactions are verified by a network of computers (miners), and new coins are created through a process called mining.

Let’s take a closer look at other features.

Addresses

But here’s where Zcash stands out: it gives users the option of privacy by offering two types of addresses:

Transparent Addresses (t-addresses)

Function similarly to Bitcoin. Anyone can see the sender, receiver, and amount on the blockchain.

Shielded Addresses (z-addresses): Keep all transaction details private, hiding the sender, receiver, and amount. This flexibility enables you to utilise Zcash in a manner that best suits your needs. You can choose to make transactions public and transparent, or private and hidden.

zk-SNARKs: The Privacy Tech

Zcash utilises a privacy protocol known as zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge). zk-SNARKs enable one party to prove that a transaction is valid without revealing any of its details. It’s like showing proof that you paid for something without showing your bank statement.

Mining and Consensus

Like Bitcoin, Zcash currently uses Proof-of-Work (PoW). Miners solve cryptographic puzzles to confirm transactions and add them to the blockchain. In return, they earn ZEC coins.

However, at the time of writing, the Zcash community is discussing a shift to Proof-of-Stake (PoS) in the future. If this happens, people will be able to stake their ZEC (lock it in the network) to help secure it and earn rewards, instead of relying on mining.

THORSwap Integration

In 2025, Zcash integrated with THORSwap, a decentralized exchange (DEX) that lets users trade assets across different blockchains without relying on centralized platforms. Thanks to this update, Zcash holders can now swap their ZEC directly for popular cryptocurrencies like Bitcoin, Ethereum, Dogecoin, and more.

This integration enhances Zcash’s liquidity and accessibility, providing users with additional options for utilising their coins. It also strengthens Zcash’s role in the growing DeFi space. In the past, trading ZEC often required the use of centralized exchanges, which could result in higher fees, restrictions, or increased security risks. With THORSwap, swaps are non-custodial, meaning you stay in control of your funds at all times.

At the time of writing, only transparent addresses are supported, not shielded ones. Still, this is an important step that makes Zcash easier to use and more connected in the crypto world.

Tokenomics 

ZEC’s tokenomics is designed to closely mirror Bitcoin’s scarcity model, with some unique adjustments to fund continuous development. It has a fixed supply of 21 million coins, ensuring scarcity and protection against inflation. As of late 2025, about 16 million ZEC are already in circulation. 

New ZEC is created through block rewards, given to miners who secure the network. The reward started at 12.5 ZEC per block in 2016. Every 4 years, Zcash undergoes a halving, reducing the reward. 

At launch, 20% of Zcash rewards went to the founders and the Electric Coin Company (ECC) for development, while miners received 80%. But in 2020, this was replaced with a new system that funds the Zcash Community and ECC.

As of 2024, 80% of each block reward is allocated to miners, 8% to the Zcash Community Grants Committee (ZCG) to support ecosystem projects. The remaining 12% is placed in a “lockbox” for future community-determined funding.

Features 

Zcash boasts a set of unique features that distinguish it in the world of cryptocurrencies. They are: 

Privacy with Choice

Unlike most cryptocurrencies, Zcash offers users the option to choose between transparency when needed and privacy when desired. This balance makes ZEC both privacy-friendly and compliance-ready.

zk-SNARKs Technology

The backbone of Zcash’s privacy is zk-SNARKs (Zero-Knowledge Proofs). This technology enables transactions to be verified as valid without revealing any sensitive details, thereby ensuring both privacy and security.

Fixed Supply

Like Bitcoin, Zcash has a maximum supply of 21 million coins. This built-in scarcity makes ZEC resistant to inflation and attractive as a store of value.

Fungibility

Because shielded transactions hide the history of coins, every ZEC is essentially equal and interchangeable. This avoids the problem of “tainted coins,” where some coins are considered less valuable due to their transaction history.

Community-Driven Development

Through its development funding model, a portion of the block rewards is allocated to the Zcash Foundation, Electric Coin Company, and Community Fund. This ensures constant upgrades, innovation, and governance support.

Cross-Chain Integration

With integrations like THORSwap, Zcash can be traded directly across different blockchains, such as Bitcoin or Ethereum, without relying on centralized exchanges.

ZCash (ZEC) Vs Monero (XMR)

When it comes to privacy coins, Zcash (ZEC) and Monero (XMR) are often compared side by side. Both were designed to offer stronger privacy than Bitcoin, but they go about it in very different ways. Let’s examine their similarities first.

Similarities

Privacy-focused cryptocurrencies: Both ZEC and XMR are designed to protect user privacy and keep transactions confidential.

Decentralized networks: They operate on decentralised blockchains, meaning no central authority controls them.

Cryptography-based security: Both use advanced cryptography to secure transactions and prevent fraud.

Mining: Both can currently be mined using specialized hardware, although Monero is more resistant to ASICs.

Differences

Privacy approach: ZCash offers optional privacy. Users can choose transparent (t-addresses) or shielded (z-addresses) transactions. On the other hand, Monero’s privacy is default. All transactions are private and untraceable by design.

Transaction visibility:

ZCash’s transparent transactions are publicly visible; shielded ones are private. In contrast, all transactions in Monero are automatically hidden.

Technology: ZCash uses zk-SNARKs for shielded transactions. Monero, on the other hand, uses Ring Signatures, RingCT, and stealth addresses to anonymize transactions.

Adoption and trading volume: ZCash has lower overall trading volume compared to Monero, but is listed on most major exchanges. Monero generally has higher trading volume in privacy coins and wider use for confidential transactions.

Community and Governance:

ZCash is governed by the Electric Coin Company and Zcash Foundation, with periodic network upgrades. Monero is fully community-driven with decentralized development and no single governing body.

ZCash (ZEC) Vs Bitcoin (BTC)

Bitcoin (BTC) is the pioneer of cryptocurrencies, while Zcash (ZEC) is a privacy-focused evolution built on Bitcoin’s foundation. They share some similarities, but also have significant differences that set them apart.

Similarities 

Fixed Supply: Both have a maximum of 21 million coins, creating scarcity.

Halvings: Both undergo a halving every 4 years, reducing miner rewards and slowing the new coin supply.

Proof-of-Work: Both currently use a Proof-of-Work (PoW) system, where miners validate transactions and secure the network.

Digital Money Vision: Both aim to provide an alternative to traditional financial systems, offering peer-to-peer transactions without banks.

Global Recognition: Although Bitcoin is more widely known, Zcash is also listed on major exchanges and has been integrated into the global cryptocurrency ecosystem.

Differences

Privacy: All transactions on Bitcoin are transparent and traceable on the blockchain.

On the other hand, Zcash offers optional privacy — users can choose transparent or shielded transactions.

Fungibility: BTC can be “tainted” if linked to illegal activity, but that’s not the case with Zcash. Shielded ZEC coins are fully fungible since their history is hidden.

Compliance: Bitcoin is accepted by regulators and institutions as the leading cryptocurrency, although governments keep a close eye on it. However, Zcash offers optional transparency, making it easier to comply with regulations while maintaining privacy protection.  

Adoption & Usage: Bitcoin is the most widely adopted and accepted cryptocurrency, often seen as “digital gold.” On the other hand, Zcash is not as widely adopted, but it is carving out a niche as digital cash with privacy.

Technology: Bitcoin is built with a simple, transparent blockchain model. Zcash uses advanced zk-SNARKs cryptography to enable shielded transactions.

Zcash Price Prediction 

ZEC, the native cryptocurrency of the Zcash network, is used for transactions, rewarding miners, and as a store of value. At the time of writing, the token trades at $139.13 with a market cap exceeding $2 billion. The current market price reflects a significant 411.4% surge from the previous year.

Its price is projected to reach between $185 and $196 by the end of 2025, supported by network upgrades and the launch of cross-chain swaps. Looking further ahead, some analysts predict that ZEC could reach $1,000 or more by 2030, if demand for privacy-focused cryptocurrencies continues to grow. However, cryptocurrency prices are very volatile, so these predictions are uncertain and should be seen as speculative.

How to Get Zcash (ZEC)

There are several ways to get Zcash, and the method you choose depends on whether you prefer using exchanges, earning, or mining. Here are the most common options for beginners:

Buy on a Cryptocurrency Exchange

The most popular way to obtain Zcash is to purchase it from a trusted cryptocurrency exchange, such as Binance, Coinbase, and others. These platforms enable users to purchase the asset using fiat currencies such as USD or EUR.  You can also swap with other cryptocurrencies, such as Bitcoin or Ethereum.

To get started, simply create an account, complete the identity verification process (KYC), deposit funds, and place a buy order for ZEC.

Decentralized Exchange (DEX)

Thanks to the THORSwap integration, you can also obtain ZEC directly through decentralized cross-chain swaps, eliminating the need for centralized exchanges. This is useful if you want to stay in control of your funds and avoid middlemen.

Mine Zcash

You can get Zcash (ZEC) by mining using powerful computer hardware (ASICs). Miners solve cryptographic puzzles to validate transactions and are rewarded with new ZEC coins

Earn ZEC as Payment

You can also receive Zcash as payment for goods or services. Some merchants and freelancers accept crypto payments, and ZEC can be a convenient option for private transactions.

Crypto ATMs (in Some Locations)

In certain regions, cryptocurrency ATMs allow users to buy ZEC with cash. However, availability varies, and fees may be higher than those on online exchanges. 

ZCash Mining Explained 

Like Bitcoin, new Zcash (ZEC) coins are created through a process called mining, which confirms transactions and secures the network. Mining uses the PoW system, where miners compete to solve complex puzzles. The first to solve a puzzle adds a new block to the blockchain and earns a block reward in ZEC.

Moreover, Zcash uses the Equihash algorithm, which was originally more GPU-friendly than Bitcoin. Block rewards started at 12.5 ZEC per block in 2016 and are halved roughly every 4 years. As of 2025, rewards are 3.125 ZEC per block, dropping to 1.5625 ZEC after the 2024 halving. This system is designed to make ZEC scarcer over time. The two methods of mining are: 

Solo Mining: This system requires powerful and expensive hardware since it’s done individually

Pool Mining: Miners join together in pools, combining their computing power and sharing rewards. This is currently the most common method for mining ZEC. 

Challenges Affecting ZCash

Zcash (ZEC) faces significant challenges, with regulation being one of the biggest. Because it’s a privacy-focused cryptocurrency, governments and regulators worry that it could be used for illicit activities, such as money laundering. This has led to stricter oversight and even exchange delistings in some regions, limiting user access and reducing liquidity.

Another challenge is competition, especially from Monero (XMR), which consistently has higher trading volumes and broader adoption. New privacy projects using advanced cryptography also compete for attention, making it harder for Zcash to maintain its position. While Zcash’s optional privacy feature is unique, it has yet to translate into mass adoption compared to its rivals.

Furthermore, Zcash struggles with technical and community hurdles. Mining is now dominated by specialized ASICs, making it harder for regular users to participate. 

Frequently Asked Questions (FAQ) 

Who created Zcash (ZEC)?

Zcash was launched in 2016 by the Electric Coin Company (ECC), led by Zooko Wilcox-O’Hearn.

What makes Zcash (ZEC) unique?

It supports both transparent and shielded transactions, offering users the choice between privacy and openness.

Can I make money mining Zcash?

Yes, but it requires ASIC hardware and cheap electricity, and some education which requires extra effort from beginners.

Does Zcash have a wallet?

Yes. Options include ZecWallet Lite, mobile wallets, and hardware wallets, such as Ledger.

Is Zcash legal?

Yes, in most countries. But some regions have restrictions due to its privacy features.

Final Thoughts

Zcash (ZEC) is a privacy-focused cryptocurrency that gives users the option of shielded transactions through advanced cryptography. This flexibility sets it apart in a market where most blockchains are fully transparent. With features like zk-SNARKs, a fixed supply, and ongoing development, Zcash continues to position itself as a leader in the privacy coin sector.

At the same time, it faces challenges such as regulatory scrutiny, competition from other privacy projects like Monero, and limited mainstream adoption. Still, with potential upgrades like Proof-of-Stake and growing interest in financial privacy, Zcash remains a project worth watching for both beginners and experienced crypto users.

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