Zcash: 5 years prior, 5 years ahead

    09 Jan 2022
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    The Electric Coin Company (ECC) has been working on Zcash cryptocurrency for five years and has recently presented a new project roadmap. It contains a plan for the transition from the currently used Proof-of-Work algorithm to Proof-of-Stake, as well as a lot of other interesting developments.

     

    A short while ago, on October 28, 2021, the privacy-focused Zcash cryptocurrency (ticker ZEC) turned five years old. The coin’s main network launch in 2016 caused quite a lot of hype. Unsurprisingly – the crypto boom was just starting.

    Today Zcash is just a well-known (and popular with miners) cryptocurrency, with an established community, its own market niche, a good reputation among users of anonymous cryptocurrencies, and a dislike for centralized crypto exchanges. It is regularly featured in the crypto Top 100 (often in the Top 50), there are 13.6 million ZEC coins in circulation, and the current price is $ 274 per token with a $ 3.61 billion market capitalization.

    As you may know, Zcash is based on the Zerocash protocol: it uses the zk-SNARK – zero-knowledge Succinct Non-interactive Argument of Knowledge – technology. This cryptographic protocol allows one party (the prover) to confirm to another (the verifier) that a statement is true, without revealing any information beyond the validity of the statement itself (neither the content nor the source from which the prover learned about the truthfulness).

    The creator of Zcash is the Electric Coin Company and its CEO, Zooko Wilcox. The project can be safely called actively developing – Zcash network had a halving a year ago, with the simultaneous launch of the Canopy update. The next major update – Halo Arc – took place in April 2021. It was meant to significantly increase the system’s scalability and eliminate the need for “trust installations”. The developers described Halo as “a trustless, recursive version of zero-knowledge proof”.

    Electric Coin Company also made deals with Protocol Labs, Filecoin Foundation, and Ethereum Foundation. The new partners are researching the Halo technology to increase the scalability and privacy of their ecosystems.

    However, the most significant shift, perhaps, in Zcash’s entire history, is still ahead – it has just been announced. In mid-November 2021, the ECC published its ZEC development roadmap until 2025. The developers describe the plan as “aggressive, but achievable”.

    The main innovation revealed is the transition to the Proof-of-Stake consensus algorithm. Income for ZEC holders will be generated through staking and access to on-chain control mechanisms. In addition, the solution will improve Zcash’s interoperability and dramatically reduce power requirements for mining – an issue that makes it difficult for any PoW-based coins to fit into the modern “green agenda”.

    Another advantage of switching to Proof-of-Stake, according to the developers, is lower pressure on the price since most of the miners will sell their ZEC right away. And, of course, a different transaction mechanism will allow Zcash to better interact with other blockchains. The ECC considers it essential, as they anticipate the transition to Web3, where all networks form a single ecosystem of interoperability.

    The move to Proof-of-Stake is scheduled for 2024. Leading up to it, from 2023, the network is supposed to run on a hybrid consensus protocol.

    Furthermore, the development of the official ECC wallet will allow the company to interact directly with Zcash users, which means they can quickly deploy and test new functions. The wallet is slated to launch in 2022 and will feature a host of new user functions from the outset. Third-party teams will also be able to create their own wallets following the release of a toolkit (SDK).

    The market clearly hoped for something like this: immediately after the roadmap’s publication, the price of ZEC began to climb from $ 116 to the current $ 271, and the growth continues. From this, we can safely assume that well-established anonymous coins will be in high demand in times of rising regulatory pressure on the crypto market.

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