Bitcoin was the first to market, and since its inception, no competitor has unseated it as the market leader. Many early users of bitcoin, however, noticed major flaws in the cryptocurrency and created new cryptocurrencies to address these challenges.
Founder and CEO of Zcash Zooko Wilcox-O’Hearn and his team of cryptographers and researchers spent three years working to launch an alternative that would fix a key problem with bitcoin - privacy.
Maybe you’re a long-term user of cryptocurrency, or perhaps you’re brand-new and want to know which option is best. A good starting point is understanding the key differences between bitcoin and Zcash so you can better determine which cryptocurrency is right for you. Here is a quick guide to better understanding each cryptocurrency and the key differences between them.
One of the benefits of cryptocurrency is complete visibility into the blockchain so that nobody can double-spend coins. With bitcoin, you can view the complete history of a coin and also view the balance of a specific user’s wallet. Although you can’t instantly connect personal details with either of these items, it’s within the realm of possibility that you could uncover a user’s true identity with some forensic research. This is a key differentiator between Zcash and bitcoin.
Zcash uses "Ak-SNARKS," which is a proof that allows one party to prove to another that a statement is true without revealing any details beyond the validity of the statement itself. This prevents double spending and keeps a user’s identity safe at the same time. Zcash also has optional privacy features that provide additional safeguards.
The mining reward for Zcash cloud mining is currently the same as for bitcoin, which is set at 12.5 ZEC per block, but the value of ZEC compared to bitcoin does vary. For example, the current bitcoin value is $11,503 and the value of ZEC is $326.10.
Another key difference is that Zcash was created with a founders award. Ten percent of each reward is distributed to stakeholders in the Zcash company, including investors, advisors and employees. This occurs for the first four years, and after this time, miners receive the full 100 percent of the award.
The proofs of work that bitcoin and Zcash use are also different. Zcash uses the Equihash algorithm, which isn’t compatible with ASIC equipment, a high-powered mining rig commonly used with bitcoin. Instead, Zcash relies on RAM requirements, making it incompatible with ASIC. This allows Zcash miners to use a more basic setup, including CPUs or GPUs, which decreases potential startup costs.
The reward for Zcash mining is currently set at 12.5 per block. Bitcoin has the same reward per block, but the values of BC and ZEC are different. Both coins have a total cap of 21 million, and the reward amount is halved every four years, or about every 840,000 blocks mined.
For example, today the ZEC reward is 12.5, but during 2020 it’s estimated that reward will halve to 6.25. During 2024, the reward will halve again to 3.125, and so on every four years.
Zcash has received much support and a strong launch into the cryptocurrency market, and it was trading at $4,000 per coin the first day. Because it has a design similar to bitcoin and key differentiators such as anonymity and security, many investors and miners are taking a second look at Zcash. But what’s the future for this cryptocurrency?
There is discussion of bringing smart contracts, which is a feature similar to that of Ethereum, to Zcash to provide additional functionality for users. Bitcoin has the first-to-market advantage, but as privacy features have become increasingly important, people will turn to alternatives such as Zcash to meet those needs.
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