What is Zcash and how does its privacy work?
Zcash sends public or private payments on one blockchain. It uses zk-SNARKs to hide shielded details, while transparent ones stay public like Bitcoin.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- It launched in October 2016 as a fork of Bitcoin's code.
- Shielded addresses hide sender, amount, and recipient.
- Transparent addresses stay public, like Bitcoin's.
Zcash is a cryptocurrency with optional privacy, used for private payments and donations. Its code began as a fork of Bitcoin's, and a shielded payment hides the sender, the amount, and the recipient with a zk-SNARK.
How does Zcash hide transactions?
A Zcash wallet holds two kinds of addresses. Transparent addresses work like Bitcoin's, so anyone can see the sender, the amount, and the recipient. Shielded addresses encrypt those details, and the network checks a zk-SNARK proof that the payment is valid.
Who created Zcash and when?
Zcash was created by Zooko Wilcox and the team that became the Electric Coin Company. It launched in October 2016 as a fork of Bitcoin's code, and the company took the name Electric Coin Company in February 2019. In 2020, it became a subsidiary of the nonprofit Bootstrap Project.
In 2017, JPMorgan Chase added the technology to its Quorum blockchain for confidential business transactions.
How is Zcash different from Bitcoin?
Bitcoin publishes every transaction by default. Zcash gives you a choice of address types, so its privacy is optional. Monero hides every transaction, which makes Zcash less private than Monero unless you shield. Zcash runs on its own blockchain and shares Bitcoin's proof-of-work consensus.
What legal issues has Zcash faced?
US regulators and exchanges watch privacy coins closely, and some platforms restrict Zcash, though no nationwide ban exists. What is allowed varies by state and platform. In September 2023, the mining pool ViaBTC gained more than half of Zcash's hashing power, raising worries about a 51% attack.
Frequently asked questions
The IRS treats crypto as property. Buying it with dollars is not taxable, but trading it for another crypto or paying with it usually is.
Yes. Miners who find blocks earn new units, and anyone with the right hardware can join the network.
Wallets that handle shielded addresses can send private payments. Others support only transparent addresses.
