Zcash

2017-02-12 00:00:00

A feature of the modern financial market is the ability to send payments online: all operations are carried out from a work or home computer. For mutual settlements on the Web, special monetary units are required - cryptocurrency. Recently, the number of Internet payments has increased significantly, which means that the demand for electronic money has also increased. New payment systems have emerged that issue their own digital coins.

One such service is Zcash. It was launched in 2016, in the fall. It cannot yet be said that the payment system is completely ready for work: developers will still have to work on improving some of its functions. There has been a lot of controversy around this system. Some experts argued that the payment system would not be able to survive in the face of fierce competition, others spoke of Zcash as a promising system capable of creating a liquid and efficient electronic currency.

The technical part of the service needs to be improved. Now the task of programmers is to provide reliable protection for transactions and funds stored in electronic wallets of system participants. You also need to work on performance.

Naturally, flaws are bait for hackers who are not averse to getting "quick money". But it is unlikely that scammers will be able to penetrate the system. It is already clear that the developers of the project are making every effort to prevent treacherous interference.

It is also difficult to talk about how difficult Zcash mining is. The creators of the cryptocurrency want their service to be available to all Internet users. People who want to make money on the "extraction" of coins do not have to purchase expensive devices. For mining, you can use an ordinary laptop.

Features and algorithm of the Zcash service

The Zcash online platform provides users with the ability to make remote payments over the Internet. ZEC currency units are used for intrasystem settlements. The service guarantees its users complete confidentiality. Zcash operates on a decentralized basis. A public distributed ledger (blockchain) is used.

Any transaction that has passed through the system is closed from prying eyes. Data about recipients and senders are classified information, it is almost impossible to calculate them. Access to information is open only to those participants in the system who have a unique key (i.e. account owners). If necessary, the user can transfer his key to someone.

How does the system work?

Absolutely all transactions are passed through a special program that encrypts information. To identify payments, a special technology is used, which is a proprietary development of Zcash cryptographers.

Another author's development is the zk-SNARK technology. This is a "0-knowledge proof".

In many services specializing in electronic currencies, transactions are available for public viewing. Zcash provides its customers with complete privacy. This is possible thanks to the technologies listed above. It is this feature that distinguishes Zcash from other cryptocurrency platforms.

Components of transactions

Payment components

When carrying out financial transactions, many consider the most important components of payments, such as:

• number (or address) of the account of the payer and the addressee;
• the size of the balance;
• the cost of the operation (commission fees).

But there is another component that is no less important. This memo Field is an additional field. It is on this component that the safety of the client's payment data depends.

Zero-knowledge proof is used to verify the veracity of a payment transaction. This component is required both when receiving funds and when sending them. Thanks to this technology, encrypted messages can be checked without decoding.

The system uses hidden and public addresses. Recognizing them is very easy. The hidden address will begin with the Latin letter z. These addresses are called z-addrs.

For transactions made from open addresses, a special Transparent Value Pool (TVP) technology is used. Data about the sender and addressee will be available for public viewing. You can recognize an open address by the letter t. Open addresses are called t-addrs.

All commission fees that are charged for payments made also go through TVP. They are stored in a distributed ledger (blockchain). In the event that the transaction was carried out by the owner of the hidden address (z-addrs), the commissions reflected in the payments are hidden from the public.

Do Zcash users change their addresses?

When carrying out a financial transaction, the amount of which differs from other transactions, the user must understand that the entire balance will be debited from the account. To receive change, you must generate a different address. This scheme of work is typical for protocols based on a distributed ledger (blockchain).

Of course, funds can be returned to the same account from which they were sent. But if you don't want to expose your payment information to the public, then it's better to create an additional address.

In Zcash, no additional addresses need to be created. If the funds were transferred from a hidden address, then confidentiality is maintained even if the change is returned to the sending account. Hidden addresses are meant to be reusable.

Can I transfer funds from a public address to a hidden address?

Zcash has another feature that is not found in other cryptocurrency systems. These are differences in the characteristics of balance sheets. Address properties are affected by the following factors:

1. the type of account (hidden or open) on which the funds are located;
2. the type of account from which the coins were transferred.

Let's analyze several options:

1. The money is kept in a public address. Any client of the system can view the balance. No matter what address the payments are transferred to, the information will be open for public viewing.
2. Sending money from an open account to a hidden one. This method poses the least threat. Communication between open addresses is interrupted. Once the money is credited to the hidden account, the payments will be kept private. Third-party users can only see that the money was transferred to a hidden account, but no one will know anything about the details of the transfer.
3. Sending cryptocurrency from a hidden address to a public one. In this case, confidentiality is guaranteed only to the sender. Information about the owner of the public address is available to the Internet community: payment data will be recorded in the blockchain.

Updated security system

After the launch of the service, security weaknesses were discovered. Errors appeared at the time of deleting the cache. As a result, a branching of the chain could occur, and the system would become easy prey for scammers. In this regard, the Zcash administration decided to update the security system and strengthen the protective functions.

The updates fixed the issue. The developers have asked Zcash customers to update the software on their computers.

Zcash Wallet Features

An e-wallet is an integral part of working with cryptocurrency. The creators of Zcash electronic money offer to download virtual wallets to computers running Linux. But this does not mean at all that owners of devices with the Windows operating system will not be able to work with the client program. You just need to go to any cryptocurrency exchange (for example, Poloniex) and download the software from there. Just a few steps and the user can send confidential payments.

Step 1. First you need to create an account on the exchange website. The registration procedure is standard, so there should not be any difficulties.

Step 2. Now you should open your personal account, find the Balances category and select Deposit & Withdraw.

Step 3. In the window that opens, you need to find Zcash electronic money. After pressing the Deposit button, the system will generate a virtual wallet address.

That's all - the e-wallet is ready to go. Personal accounts of users are equipped with the following options:

• tracking payment history;
• deposit / withdrawal or exchange of Zcash for other cryptocurrencies.

Place of Zcash in the cryptocurrency market

Zcash digital coins entered the financial market just a few months ago. But, despite their youth, they managed to take their rightful place. The cryptocurrency of this system is in great demand among consumers. It is bought and sold. It is presented on major exchanges that sell electronic banknotes.

An interesting trend is observed among investors: they tend to buy back tokens even before they enter the exchange services. On many exchanges, this can be done quite legally. The BitMEX exchange has entered into a partnership agreement with the management of Zcash.

Is it necessary to buy Zcash?

To become the owner of tokens, it is not necessary to buy them. Cryptocurrency can be obtained using a special miner program.

Mining (extraction) of Zcash coins is carried out using the Equihash algorithm. At the beginning of autumn 2016, even before the launch of the system, a test version of the miner started. The money mined using the test version could not be used for payment, but users liked the newly minted cryptocurrency.

The administration of the payment system decided to announce a competition among its users to create the best program for generating virtual coins. There were many participants, but there were only five prizes. The winners received a monetary reward. The miner was tested and approved by the mining organization Genesis Mining, whose clients began to buy programs and use them to receive Zcash currency units.

Zcash mining model: distinctive characteristics

The Zcash mining model, although somewhat reminiscent of the Bitcoin model, has its own characteristics. First of all, this is the time allotted for the creation of the block and the gradual change in complexity. Mining starts slowly. The fee increases gradually. When creating the first 20 thousand nodes, the cost of 1 block will rise from 0 to 12.5 coins.

Slow start is a necessary measure. Using this mechanism, developers were able to eliminate security breaches and take protocol risk management into their own hands.

After 4 years, the fee reduction will begin. At first, the creators of the cryptocurrency will receive part of the mined monetary units: 20% of the coins earned by the miner will go to their accounts. After 48 months, users will receive all the ZEC they managed to mine. The developers plan to issue 21 million monetary units. A tenth of them will belong to the administration of the system.

Claymore Zcash

Claymore Zcash is a ZEC mining program. The miner can be installed on Windows computers. You need a video card to work. The program has excellent quality characteristics such as stability and high performance.

Why should you mine Zcash coins?

1. At the beginning of November 2016, for 1 created block, users received 4.2 The price is low, but it is not final. The cost of blocks grew daily: in just a few weeks, miners began to receive 12.5 ZEC / block. This price will be fixed for 4 years.
2. Mining Zcash requires little energy input. There is a small load on the equipment.
3. Coins are transferred to the e-wallet after each pool payout.

Rate volatility

Zcash is a very young cryptocurrency, and its rate is very volatile. After the first issue, the coins were very expensive - 1 unit was estimated at 3,000 BTC. Demand for ZEC was strong. But then the price dropped to 48 BTC for 1 ZEC.

Within a few months of the existence of the cryptocurrency, there were sharp jumps in the rate up and down. Now the currency is estimated at no more than 0.8-0.9 BTC for 1 ZEC.