In the crypto world, there is an old saying: Bitcoin is an open notebook that anyone can read, though not always understand who owns it. Such openness is a strength of blockchain, but also a vulnerability.
Zcash arose as a response to this dilemma: how to maintain the transparency of the system while giving the user the choice — to be visible or remain private.
📌 Why does cryptocurrency need privacy?
In Bitcoin or Ethereum, every transaction is public: the sender, recipient, amount, time — everything is visible. This means:
anyone can see the business activity of the company;
hackers can choose victims by analyzing wallet balances;
governments can easily profile the financial behavior of citizens;
activists, journalists, volunteers may face risks simply due to the fact of the transactions.
These are not hypothetical threats. In 2022-2023, cryptocurrency became one of the last available means to receive humanitarian aid in Iran and Afghanistan. But the publicity of such transactions could cost people their freedom or lives.
🔍 What is Zcash and how does it work?
Zcash is an open-source cryptocurrency launched in 2016 by the Electric Coin Company team. Its main technological advantage is the use of zero-knowledge proofs (zk-SNARKs), which enable fully private transactions without revealing details.
In other words, in Zcash a user can prove that a transaction is legitimate without revealing the sender, recipient, or amount.
This is the mathematical equivalent of showing the controller: 'I have a ticket' without taking it out of your pocket.
🔗 Zcash Official Site
⚖️ Flexible Privacy
Unlike Monero, where all transactions are private by default, Zcash operates a system of two types of addresses:
t-addresses (transparent) — similar to addresses in Bitcoin;
z-addresses (shielded) — provide complete confidentiality.
This gives the user or business the choice: to use transparent mode for regulatory compliance — or private mode when confidentiality is critically important.
🧩 Who uses Zcash and for what?
📌 Use Case Examples:
Journalists and activists in regions with high levels of control (Iran, China, Russia);
Charities: for example, GiveDirectly used private transactions for transfers in regions at risk of persecution;
Edge, Nighthawk, ZecWallet wallets have already integrated shielded transactions, with mobile support;
Corporate users — to limit the visibility of business relationships and competitive transaction analytics.
🧪 Technological Innovations
Currently, Zcash is transitioning to Halo 2 — a new form of zero-knowledge proofs that:
does not require a 'trusted setup';
reduces the amount of data on the blockchain;
allows scaling private smart contracts.
This opens up the possibility for integrating Zcash technologies into Web3, DeFi, and CBDC solutions.
⚠️ Criticism and Limitations
Zcash is not perfect. Among the challenges:
UX Complexity: using shielded addresses requires a compatible wallet, not supported by all exchanges.
Liquidity and adoption: ZEC does not have the same level of adoption as BTC or ETH, and often faces listing restrictions due to regulatory concerns.
Centralized governance: critics point out that the Electric Coin Company and Zcash Foundation have significant influence over the roadmap and network governance.
"Founders' Reward": a portion of mining goes to fund the team, raising debates about fairness and decentralization.
However, it is worth noting: the Zcash team openly acknowledges these limitations and is working to address them. For example, the updated funding model starting in 2024 involves a shift to more transparent grants.
🔚 Conclusion
In an era when everything — from your IP address to payment history — is turned into a commodity, privacy is not a luxury, but a prerequisite for digital freedom.
Zcash does not promise everyone everything at once. But it proves that in a world of public blockchains, privacy can be an option — not a crime.
This is not a dark web currency. It is a tool for those who want to decide for themselves what to keep visible and what to keep private.
🧾 Editorial Note: Zcash is available on exchanges such as Binance, OKX, Kraken. However, in some jurisdictions (e.g., the UK), its listing is restricted due to financial regulatory requirements.
🔗 Useful Resources:
https://z.cash
https://electriccoin.co
https://zips.z.cash (Zcash Improvement Proposals)
https://messari.io/asset/zcash/profile
