Zcash (ZEC) is a cryptocurrency that addresses security concerns surrounding transaction tracking on Bitcoin's public ledger. By employing the zk-SNARK security protocol, the team behind Zcash focuses on improving user privacy by enabling fully shielded transactions that encrypt sender, recipient, and transaction amounts. ^{[1] [2] [3]}

Overview

Zcash is a cryptocurrency focused on privacy. It enables users to conduct transactions without exposing financial details on the public blockchain. Based on the original Bitcoin codebase, it incorporates zero-knowledge cryptography—specifically zk-SNARKs—to allow transaction validation without revealing the sender, receiver, or amount.

Launched in 2016, Zcash was developed in response to privacy limitations in Bitcoin, evolving from the Zerocash protocol proposed by a group of academic researchers. The Electric Coin Company led its initial development, implementing the Trusted Setup system to generate secure cryptographic parameters. Zcash stands apart from transparent cryptocurrencies by prioritizing user-controlled confidentiality in all transactions. ^{[1] [3] [4]}

History

Zcash originated in 2014 from research focused on enhancing Bitcoin’s privacy features. A group of scientists—including Eli Ben-Sasson, Alessandro Chiesa, Christina Garman, Matthew Green, Ian Miers, Eran Tromer, and Madars Virza—proposed a cryptographic protocol called Zerocash, which evolved from an earlier concept known as Zerocoin. Their work laid the foundation for Zcash, a new cryptocurrency emphasizing private transactions. ^[5]

Zcash officially launched on October 28, 2016, led by The Zerocoin Company (later renamed Electric Coin Co.), which raised $3 million to support protocol development. Planned upgrades, including Overwinter and Sapling, followed the "Sprout" series's initial release. Sapling, activated in October 2018, introduced major efficiency improvements. In 2017, the Zcash Foundation was established with an initial allocation of 273,000 ZEC, and it later organized the Powers of Tau ceremony—a large multi-party computation event. The project also gained attention through partnerships, such as collaborating with JP Morgan. ^{[7] [8]}

Between 2019 and 2020, the company rebranded as Electric Coin Co. to distinguish itself from the protocol and the Zcash Foundation. During this time, the community discussed governance topics like the continuation of the Founder’s Reward. In early 2019, a previously undisclosed vulnerability in the older zk-SNARK system was revealed, though no exploitation was found. The company began work on a new proving system, Halo, to improve scalability. Network upgrades continued with Blossom in December 2019, Heartwood in July 2020, and Canopy in November 2020—each adding performance and privacy features. ^{[9] [10]}

In 2022, Zcash activated Network Upgrade 5 (NU5), introducing full support for the Orchard shielded protocol and Unified Addresses, further advancing the project's focus on privacy and usability. ^[14]

Features

Addresses

Zcash introduces two distinct address types: private (z-addresses) and transparent (t-addresses). While private addresses start with a "z," transparent addresses use a "t" prefix. An important feature of ZCash is the interoperability between these two address types, allowing the transfer of funds between them. This capability presents privacy implications as users can shield or deshield transaction information based on their preferences. Most wallets and exchanges predominantly support t-addresses, but support for shielded addresses is accessible through mobile and desktop wallets. ^[11]

Transactions

Zcash transactions come in various types, depending on the involved addresses. Transactions between two transparent addresses (t-addresses) follow a pattern similar to Bitcoin, with the sender, receiver, and transaction value publicly visible on the blockchain. On the other hand, transactions involving shielded addresses encompass shielded (z-to-z), shielding (t-to-z), and deshielding (z-to-t) transactions, with the primary focus on safeguarding z-address privacy. Among these, the most secure transaction is the shielded (z-to-z) variety, where both sender and receiver addresses and the transaction amount are encrypted. All transactions are recorded on the public blockchain, confirming the occurrence of a transaction and disclosing associated fees. ^[11]

Viewing Keys

Zcash offers a feature allowing owners of z-addresses to share transaction details with trusted third parties by employing viewing keys. These keys grant read-only access to the address, ensuring that third parties can audit transactions without the authority to spend funds. This capability facilitates "selective disclosure," where users control which transactions are revealed. Viewing keys prove invaluable for compliance with auditing requirements, tax regulations, or anti-money laundering protocols, enabling participants to adhere to such standards while maintaining their privacy. ^[11]

Zashi Wallet

Zashi is a self-custody, shielded wallet designed exclusively for private Zcash (ZEC) transactions. Developed by Electric Coin Company, the creators of Zcash, it enables users to send, receive, and spend ZEC without intermediaries or surveillance.

Focused on privacy, Zashi supports only shielded ZEC payments to ensure strong financial confidentiality. It gives users full control of their funds and private keys, emphasizing security and financial sovereignty. The wallet features a user-friendly interface, ongoing improvements, and integrations such as Coinbase for easy ZEC purchases and Flexa for spending at thousands of retail locations. Zashi is designed to simplify onboarding for new users, providing a straightforward way to access private digital payments. ^[19]

Technology

The Zcash protocol uses ZEC as its unit of account, with the smallest divisible unit, a satoshi, equal to 0.00000001 ZEC. This structure mirrors Bitcoin’s shared origins with the Bitcoin codebase.

Zcash’s funding model allocates a portion of block rewards to development. Initially, 10% of block rewards went to the Founders Reward, benefiting the Electric Coin Co., the Zcash Foundation, and early investors. Following Network Upgrade 4, 8% of rewards are directed to the Dev Fund, managed by a grants committee.

Zcash mining began with CPU and GPU accessibility, but as ASIC hardware emerged, it became the dominant method due to greater efficiency. In 2018, the community did not implement ASIC resistance, citing security risks. Leading mining pools include Flypool, Nanopool, and Slushpool. ZIP 213, introduced in the Heartwood upgrade, allows shielded coinbase outputs for miners.

Scalability efforts are ongoing, with research into both protocol-level and application-level improvements. Notably, the Halo protocol—proposed by Sean Bowe—introduces recursive zero-knowledge proofs to improve scalability. Additional proposals, including one by Daira Hopwood, explore sharding to increase transaction throughput. ^{[12] [15]}

ZEC

The ZEC Token is the Zcash network's native cryptocurrency, which manages all transactions and mining rewards. The total supply of ZEC is capped at 21 million, with 80% of block rewards allocated to miners and the remaining 20% distributed to the development fund. Similar to Bitcoin, mining rewards are scheduled to be halved every four years, as a means of controlling inflation. ^[16][17][18]

ZecHub

ZecHub is a decentralized, open-source education platform focused on the Zcash ecosystem. It hosts a range of resources—including newsletters, blogs, and tutorials—created and maintained by a global community of contributors. The platform is designed to support collaborative content creation, validation, and distribution, aiming to strengthen Zcash knowledge and engagement through community-led educational initiatives. ^{[21] [22]}

NEAR Integration

Zcash has been integrated into NEAR Protocol's Intents stack, enabling cross-chain decentralized trading of ZEC with assets such as BTC, ETH, NEAR, and SOL. This integration allows users to perform permissionless swaps without KYC, using NEAR’s infrastructure to abstract away blockchain-specific complexities and reduce reliance on centralized exchanges.

Through this setup, ZEC holders can transfer shielded assets from Zcash’s Orchard pool to a transparent address managed by NEAR smart contracts, preserving privacy while enabling cross-chain transactions. The integration leverages Chain Signatures and opens up possibilities for future developments like shielded swaps using Zcash Shielded Assets (ZSAs). NEAR users gain seamless access to ZEC, which retains its privacy features post-swap, aligning with the project’s focus on financial confidentiality and decentralized self-custody. ^[20]