This is part two of privacy coins and this time I’ll talk about Zcash, however the founders prefer not using the term privacy.  Would you call your paycheck a privacy check?

Purpose of privacy coin

Bitcoin and many other cryptocurrencies expose your entire payment history on the public blockchain.  Coins like zcash pickup an important part of where bitcoin left off and that is to protect the information between receipients.

What is Zcash?

Zcash is the first open, permissionless cryptocurrency that can fully protect the privacy of transactions using zero-knowledge cryptography.

Introduced in the fall of 2016.

Clone of Bitcoin with the addition of encryption

Zero knowledge proofs – ability to prove a transaction without revealing details

JP Morgan taking encryption component and adding it to their own blockchain

The Company

People

• Leading scientists from some of the world’s most prominent universities
• Zooko part of DigiCash in the late 90’s and another company focused on privacy
• Strong technical team with diverse background
• Crypto elite advisors

You can tell a lot about a company based on their hiring standards.  Here are a few snippets from Zcash

• Every line of code is a business decision. Understand the nature of the business challenge really well.
• Think long term
• Siloed knowledge is bad
• The biggest pattern we follow is to reduce complexity. A prime objective of systems architecting is to simplify, simplify, simplify. Design for the simple case first.

History

ZeroCoin (2013)- Originally the team was interested in implementing into Bitcoin blockchain.  Due to overhead and latency it wasn’t accepted

Bitcoin conference met with others that had developed zk-SNARKs

Joined forces to create Zcash

Got Zooko onboard.  With long history in digital currencies and business experience

Investment capital

How does Zcash work?

Ability to send private or public transaction

Public behave similar to bitcoin

Private are encrypted using Zk-Snarks where only sender and receiver can see the transaction.  The public blockchain records the encrypted transaction

What I like

• Zooko long history with digital currencies
• Strong technical teams
• Binance listing
• >1B Market Cap
• Small number of tokens ~3m
• JP Morgan legitimizing Zk-Snarks
• Github very active
• Easy to buy on a large number of exchanges
• Just added to Circle as a payment option
• Very long term strategic company
• Security audit finding and resolving several issues.  Planned future audits with upcoming releases
• Recent hires include marketing director

What I don’t like

• Premine or initial distribution of 10% of coin to founders, investors, devs
• Native wallet on linux.  Requires 3rd party for most users
• High valuation at such an early stage without native wallets, major merchant integration, and adoption
• The company behind it released the code to the community and working on projects that are not directly related to the project (JP Morgan example)

CloakCoin Resources

http://zerocash-project.org/

http://zerocoin.org/

https://eprint.iacr.org/2013/507.pdf