Bitcoin and Zcash
Bitcoin is a crypto-currency that would offer greater anonymity. However, it is possible to trace certain transactions across the blockchain; a publicly shared bitcoin ledger. This makes it possible for one to figure out the sender and recipient of the Bitcoin. For this reason, Zooko Wilcox developed a new digital currency called Zcash, alternative to Bitcoin. The crypto-currency offers absolute payment confidentiality. Zcash transactions normally hide the recipient, sender and value of the transactions. It is only the people with the right view key who can see the content of that particular transaction, which gives them absolute control.
Features of Zcash
Some of the main features of Zcash include;
1. The Zero Knowledge Feature: This untraceable digital currency uses the mathematical “zero-knowledge proof” formula, which offers the same anti-forgery assurance like Bitcoin. This means that no one can either counterfeit or even spend the same coin twice. This feature also enables the spender or receiver to either keep their transaction entirely secret or not.
2. Decentralized: It is an open-source decentralized crypto-currency, which is aimed at setting new standards for anonymity and privacy, using groundbreaking cryptography.
3. Mining: Just like Bitcoin, this currency will be mined by users who want to transact in them.
How it Works
Since all the contents of the Zcash transactions are well encrypted and private, the whole system normally uses a novel cryptographic technique in order to verify the payment. The currency uses the zero-knowledge proof construction known as zk-SNARK, which is developed by a team of experienced cryptographies. The construction enables the network to easily maintain a more secure ledger of balances without necessarily disclosing the amount or the parties that are involved. The transaction metadata is well encrypted while zk-SNARK help in ensuring that nobody is cheating on the system.
Using Zcash to Transact
I. The currency guarantees you of absolute anonymity and privacy. Unlike Bitcoin, you do not need to funnel it through other intermediaries or special software in order to become anonymous.
II. Just like Bitcoin, a user cannot counterfeit or even spend the same coin more than once.
III. As a user, you also have the option of choosing whether you want to remain anonymous or not, a feature that Bitcoin lacks. This means that you can transact over the internet without any fear of your private information or amount involved in the transaction leaking out.
IV. It will help in preventing cases of corruption, abuse and oppression from dictatorial regimes and governments that want to monitor each transaction that a person makes. This is an aspect that Bitcoin is yet to achieve.
V. Zcash’s untraceability feature makes it impossible for one to carryout blockchain analysis, a tool that most law enforcement surveillance units use.
Drawbacks
I. The crypto-currency can be used by criminals who want to remain anonymous when transacting online. For instance, it could be misused by those people who want to engage in money laundering, poaching, etc., who may not want their identity revealed.
II. At the moment, Zcash only works on Linux, which means that those people using other types of operating systems may find it hard to use the system.
Although it has a few shortfalls, some of the features that this crypto-currency promises will place it at a more advantageous position than Bitcoin. For instance, the fact that Zcash can offer you maximum privacy means that you can transact using the currency without any fear of your identity ever leaking out. It will offer the best solution to the aspect of control and interference from banks and governments. The currency is still at the alpha testing stage and it is bound to become fully functional in just about six months.
With the emergence of crypto-currencies as a means of transaction, there have been attempts to develop better digital currencies which offer better features and greater anonymity. However, even with these attempts, no rival crypto-currency has come even closer to gaining widespread attention and the acceptance of Bitcoin.
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