What is ZCash? A Beginner's Guide To Zcash and Tips For Investing In ZEC

Last Updated July 23rd 2021
12 Min Read

When fathoming the cryptocurrency world, one cannot avert the rising fame of Zcash, and the adherence to power it has experienced in the last few years. It has evolved from the great minds of a few developers and now has become a giant in the blockchain with proof-of-work on chain-governance.

Zcash offers the ability to transact privately on the private blockchain. Moreover, it offers something which not many cryptocurrencies currently stand in line with, hence it operates as unique and special in the aforementioned hierarchy. 

While it is constantly attracting an abundance of attention from people all over the globe, for many individuals Zcash remains a mystery and an unknown phenomenon. It is quite easy to manoeuvre with, and it is even easier to invest in; in regards to profit, it is bound to bring back a good amount of investment. It is rather easy to understand, thus through the upcoming paragraphs, we will provide you with an overall overview of where Zcash stands.

Here is a short biography of Zcash: Where it started, how it operates - and how to invest in it.

What is ZCash?

what is zcash

ZCash is a cryptocurrency that has a decentralized blockchain, which mainly operates through offering complete privacy for the ones who use it. If you are familiar with Bitcoin, then you can imagine ZCash to be quite similar to it, however, the grounds of privacy is where they differ from one another. The level of anonymity ZCash provides in the blockchain cannot be compared to the one that Bitcoin offers on any ground since the former is way more grandeur. Another major difference is when it comes to matters of fungibility.

“ZCash just received a major boost. Through a process known as ‘wrapping’, a synthetic version of Zcash is now available on Ethereum that is compatible with all of its major wallets and applications. This means that Zcash is much more widely available than it was a few weeks ago.” comments Forbes’ Cryptochain writer Steven Ehrlich. 

According to Investopedia, “Cash increases user privacy by using zero-knowledge proofs (zk-SNARKs) to validate transactions without revealing information that could compromise a user's privacy.” This is what mainly ensures the anonymous grounds for users of ZCash. It encrypts what the shielded transactions behold and since the payment information is encrypted, the protocol uses a novel cryptographic method to actualize and see through their validity.

 

History Behind ZCash

It all started out around 8 years ago as a project initiated by Matthew Green. It was immensely successful and it ended up raising more than three million dollars from investors. This was where Zcash was initially born. Moreover, the first mining took place three years after the launch, and it was met with unusually high demand from traders and miners from all corners of the globe. The launch of Zcash was followed by the initiative for the Zcash Foundation, which is a non-profit organisation that raises money for benevolent causes. 

Now, it stands as a hegemon among digital currencies, and its fame is on a hyperbolic rise ever since it came out in 2013. Although Bitcoin is the pioneer in the cryptocurrency world, ZCash is aiming to reach the same heights through the usage of the fungibility feature. 

While the financial system still lags on the journey of complete digitalization, it is foreseen that it could happen in the near future. Cryptocurrencies all over the world keep being developed, all in the visualization of a digital tomorrow. Additionally, the pandemic has created quite a gap with the physical and digital world, and people are gravitating towards the latter more each given day. 

In the course of a decade, the financial realm will come upon many changes, one of them being the situation of online currencies versus physical monetary values. Whether it’s gold or fiat currency, you can always exchange it for other amounts of good, however, whether the former will be completely abolished as an idea is yet to be witnessed. 

Would you consider investing In Zcash?

Early Uses of ZCash

According to CoinGecko, at the moment of writing Zcash price is $147. It has a circulating supply of 11 million ZEC coins and a max supply of 21 million. But the story of its initial transactions cannot go unnoticed, with the earliest ones dating back to 2013. 

For a trading coin to achieve the heights ZCash has risen to within a period of eight years is an understated achievement. While Bitcoin has many faults when it comes to privacy, ZCash is a leader in the field, “Zcash uses a zero-knowledge proof construction called a zk-SNARK, developed by our team of experienced cryptographers based on recent breakthroughs in cryptography. These constructions allow the network to maintain a secure ledger of balances without disclosing the parties or amounts involved.” as communicated by CoinGecko

Read Also: What Will Drive The Zcash Price in 2021?

Concerns Over ZCash

Concerns do not simply revolve around ZCash, but namely every digital currency out there. This realm of online transactions is still rather new to the world audience, which is why there will always be an air of scepticism hovering around. 

ZCash as a digital coin is mostly made for Linux users and is strictly confined to CPU mining. It can also be used on Windows or MAC, but the mining option is definitely not one of the best for profit. This is one of ZCash’s biggest issues up to date.

Why Invest in ZCash?

zcash investment

Investopedia has listed ZCash as one of the safest and most private cryptocurrencies, along the line with Monero, DASH, Verge, Horizen and Beam.

When defining itself, ZCash sticks to the following statement and bases its argument on the given facts, “If Bitcoin is like HTTP for money, Zcash is HTTPS," underlining its enhanced security and privacy features.

Zcash has implemented a cryptographic tool called Zero-Knowledge Proof and grants participants an option to shield transactions. It allows participants to transact without any of them revealing their addresses to the other(s). Zero-Knowledge Proof also obfuscates the transaction amount.” On another note, Zcash is mined in a similar way to most other cryptocurrencies.

When investors want to channel their money in the virtual world, privacy is one of the feats they cannot do without. Hence, ZCash as a cryptocurrency remains a trustful operator, and it diverts many malicious hacking attempts due to the cryptography it is built on. Moreover, all of the transactions are shielded and cannot be penetrated by unknown users.

We are all witnessing the rise of crypto values in the last decade, especially after the COVID-19 pandemic. Bitcoin adoption is consistently on the rise, and it may continue rising all through the year 2021. The latest updates, on the other hand, only enhance this fact, such as the $1.5 billion Tesla investment in Bitcoin. From now on, this only incentivizes banks and institutions to take action and join in these newly formed circumstances.

The compatibility of the above-mentioned facts along with the well-done research upon which ZCash is built on shows all interested investors that there is no harm in channelling their money this way. The security-specialized engineering team in charge of the hegemon which ZCash has lately become makes sure that this platform is safe for all parties involved, and no loss of money awaits.

The validity of the information which is posed by the company along with the security lines makes it a great place of investment for future-oriented thinkers who would like to become part of the crypto world. 

Digitalcoin predicts that Zcash price could increase in 2021 and go up to $216. It is even more optimistic when it comes to long term forecasts, predicting ZCash to reach $439 in 2025. 

The stigma regarding cryptocurrencies is bound to linger on until the hacking attempts are diminished or at least heard of in a small manner. On the other hand, ZCash as a crypto channel remains one of the safest from the aforementioned malicious attempts and one of the cryptocurrencies with the highest growth potential according to forecasts.

Don't Miss: Zcash Price Prediction Forecast

 

How to Invest in ZCash?

One of the ways people always revert is to buy ZEC through a crypto exchange. There you can ZCash and other cryptocurrencies, and even use different types of fiat currencies for the purchase. 

When you are through with your purchase, then you should search for ways to finalize the transaction in terms of security and store your ZEC. Buyers use digital wallets or physical ones. Crypto wallets are a go-to gadget for crypto traders all over the globe, but it all comes down to personal taste and preference.

Ready to invest In Zcash?

Tips Before Investing in Zcash

1. Consider using a safe wallet

As we mentioned above after purchasing the coin you will need a crypto wallet to store it. It is crucial to pick a safe wallet as you want to keep your coins secure. Especially if you are going to invest a large amount of money. It is best to use 2 factor authentication and a PIN code. You can use a software or a hardware wallet, depending on your preference.

2. Invest only what you can afford to lose

The age of cryptocurrencies is applicable to any sort of investment, especially the coins mentioned throughout the text such as ZCash and Bitcoin. Their price is consistently going through an upward parabola of price, and many times swinging downwards. Cryptocurrencies including ZCash have proven to be profitable during bull markets, but bears sometimes can be ruthless. Therefore, only invest what you can afford to lose.

3. Think long term

As with most cryptocurrencies, ZCash can be described as volatile as well. Day traders like volatility as it gives them opportunities for profits. But unless you want to get in day trading investing long term and HODLing creates less risk. Therefore if you buy ZCash and its price increases after your purchase, then you will earn profits if you decide to sell it after hodling it for a certain amount of time.

4. Watch the crypto market

It’s important to stay up to date if you want to make the investment at the right time. For example, we are going through a bull run and those that invested prior to the bull run taking place, are earning profits now. Most cryptocurrencies are correlated to Bitcoin, therefore if Bitcoin grows in price so will the others. But, it is crucial to stay updated as various events around the world might have an impact on cryptocurrencies’ price. You don’t want to buy at their peak. Always remember the rule; Buy low, sell high!

5. Be aware of tax liabilities

In the United States, cryptocurrencies are taxable. You must be aware that you are liable for capital gains tax when selling the currency at a profit. If you spend it and the price has appreciated since you bought it then you are liable for capital gains tax. So, ensure you keep a note of your transactions.

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Key Points

  • One cannot avert the rising fame of Zcash, and the adherence to power it has experienced in the last few years.
  • If you are familiar with Bitcoin, then you can imagine ZCash to be quite similar to it, however, the grounds of privacy is where they differ from one another.
  • For a trading coin to achieve the heights ZCash has risen to within a period of eight years is an understated achievement.
  • The stigma regarding cryptocurrencies is bound to linger on until the hacking attempts are diminished or at least heard of in a small manner.
  • One of the ways people always revert is to buy ZEC through cryptocurrency exchanges.
  • Digitalcoin predicts that Zcash price could increase in 2021 and go up to $216.
  • Digitalcoin is even more optimistic when it comes to long term forecasts predicting ZCash to reach $439 in 2025.
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