Based on a decentralized blockchain, Zcash tries to provide anonymity for its clients. Just like Bitcoin, Zcash is also an open-source cryptocurrency. The prime distinctions between Bitcoin and Zcash lie in the degree of anonymity and exchangeability each one delivers.
The rising popularity of Bitcoin led to the introduction of other altcoins, including ZCash. As the use of cryptocurrency became more common, users started to demand better degrees of privacy regarding their transactions.
Zooko Wilcox-O'Hearn launched ZCash in the October of 2016, following the demands for a decentralized financial system with more privacy options. Bitcoin might be the sole pioneer in the cryptocurrency market, but ZCash is seeking to bring more privacy and exchangeability into the system.
Exchangeability is simply the degree of facility when exchanging one commodity with the other. For instance, money is fungible because you can get anything in return for it. Exchangeable assets are susceptible to fraud and theft, which why gold is in underground vaults, and fiat currency requires constant surveillance by central banks.
Bitcoin's solution to overcome fraud and theft threats was to make all transactions transparent in a way, that anyone can have access to the records. Unfortunately, the solution is at odds with privacy concerns and has led to various problems through the years.
Some users believed their identities will be anonymous because Bitcoin wallets are known to be pseudonymous. But the Darknet and SilkRoad cases revealed it is not impossible to obtain real-life identities of Bitcoin wallet holders.
Adopting Bitcoin's open ledger system, ZCash encrypts information about the ledger's user. Unlike Bitcoin, in ZCash, all transactions are encrypted with access only given to users who have been allowed to view the information.
It is usually the case with most cryptocurrencies providing anonymity to rely on private keys generated with alphanumeric characters. A unique public address like the case of internet protocol or IP will replace your identity. Your particular address is your way to receiving funds from other users.
You cannot access your funds without your private keys, and these keys are attached to your transaction data. As you make more transactions, you can link your address to your transactions. Having access to different public addresses will give you a better image of how reliable the buyer is.
By holding their public address, you can browse through the purchase history of different users and decide if you want to trade with them. Although very useful, the access to public addresses can be troubling if they fall into the hands of bad actors.
Employing a Zero-Knowledge-Proof protocol, ZCash enables users to engage in transactions but not reveal their public addresses to each other. Zk-SNARK also helps make ZCash transactions untraceable by mixing the payment addresses and the amount involved as well.
By recording a faux payment address on the blockchain, ZCash makes it impossible to trace any individual transactions. The method is the main difference between ZCash and Bitcoin, as Bitcoins make user addresses and the amount of transactions public.
Prokey hardware wallet combines security with a modern design to take care of your ZCash. Prokey offers some exceptional features as follows: