by Tanzeel Akhtar
The cryptocurrency Zcash (ZEC), formerly referred to as 'Zerocash' or 'Zerocoin' was launched in October, 2016. Earlier that year, founder and CEO of Zcash, Zooko Wilcox, laid out the mandate for the new cryptocurrency, which he said at the time was "inspired by Bitcoin...[but with] the addition of privacy" since Bitcoin is an open financial software system.
ZEC's market cap is at $595,261,984 currently, with a circulating supply of 2.31 million coins right now. ZEC was trading at $246.30, at time of publication, after having spiked to as high as $410 last week on news that South Korea's Bithumb exchange will soon enable Zcash trading.
Since that surge, however, the price has been dropping though it's not completely clear why. Speculation is the crypto market's reaction to the news clearly mirrors what happened when Bitcoin Cash, Monero and Litecoin were each added to the same exchange: after trading on Bithumb began, investors bought the rumor then sold the news but later bought the dips. It's expected that ZEC trading will behave similarly.
Wilcox says that Zcash is a decentralized and open-source cryptocurrency and his team of cryptographers and engineers have made scientific advances in the underlying mathematics giving additional privacy that goes beyond what's provided by Bitcoin software. zk-SNARKs are the cryptographic tool underlying Zcash.
Yet another factor which sets Zcash apart from Bitcoin and Ethereum is that Zcash is set up as a company. Here's the company's 'sell' on Zcash:
“Bitcoin and most cryptocurrencies expose your entire payment history to the public. Zcash is the first open, permissionless cryptocurrency that can fully protect the privacy of transactions using zero-knowledge cryptography.”
Zcash on a Roll
Is Zcash hitting on all cylinders? Rob Viglione, co-founder of another privacy- and security-oriented cryptocurrency ZenCash thinks so. He believes it's worth looking at the recent jump in the price of Zcash.
”Zcash has been on a roll lately, and that’s reflected in the recent price jump. It initially more than doubled, then settled back down to about 50% higher than where it was a week ago. This comes from a combination of nice roadmap execution, a major exchange listing with Bithumb on the South Korean market, and greater assurance that the somewhat controversial 'trusted setup' wasn’t gamed.”
Viglione points out that the cryptocurrency's most interesting tech feature is 'XCATs,' the acronym coined by Zcash management to describe its ability to be used for cross-chain 'atomic trades' between two different digital currencies without a centralized exchange or counterparty, meaning trades can take place off-exchange.
Notes Viglione:
“[There] is tantalizing potential for massive reduction in computational requirements for shielded transactions. These are bread-and-butter of any zk-SNARK-based coin. The current downside, however, is that it requires a ton of computation to execute. The Zcash researchers have actually created a new elliptic curve called JubJub that drops proving times 80% and memory usage 98% for shielded addresses, opening the door for mobile support. In general, though, there’s good reason for optimism on the project."
Says Ted Moskovitz, a former SEC lawyer now involved with SaaS, genomic-based medicine, and blockchain technology is the founder of DecentraNet, a blockchain consulting firm:
”Zcash may be down, but is certainly not out. Like many cryptocurrencies, Zcash has been experiencing a wild ride over the last few weeks, but it still remains one of the leading cryptocurrencies with huge upside potential. Price fluctuations are to be expected when there are so many rumors abounding (such as rumors of Zcash being added to leading Korean exchange Bithumb). Zcash’s strong team, and unique anonymity features as compared to Bitcoin perfectly position it to gain market share over the coming years. Zcash will be sure to reward investors more focused on long-term value than short-term profits."
Another factor driving ZECUSD after it reached its $410 high, then fell back to $290 levels and currently even lower, are rumors investors may have manipulated the price of Zcash.
Moskovitz responds:
“Buy the rumor, sell the news is a classic refrain for any cryptocurrency investor. In this case, we saw just that—rumors that Zcash would be added to leading Korean exchange Bithumb prompted a large influx of capital into Zcash. Then, once the rumor was confirmed and ZCash was added to the exchange we saw traders selling and taking profits, driving down the price from it's all-time high. Ultimately, the price will recover as this single event fades into the background narrative. If anything, these events draw attention to Zcash and will lead to higher adoption, and therefore higher prices.”
Zcash, Bithumb and Future Fundamental Drivers
Zcash CEO Wilcox recently officially announced, lauded and promoted the addition of Zcash to the cryptocurrency exchange world via Bithumb of South Korea.
“With the evolving regulatory situation in China for all cryptocurrencies, it's promising to see the Zcash ecosystem continuing to grow in the greater Asian market and around the world. This announcement not only opens up access to Zcash for more people but also allows users to benefit from Bithumb's listing of ZEC through a promotional "cash back" program."
Bithumb VP Jung-A Lee, detailed four reasons it's worth supporting Zcash:
- Strong, stable network.
- Tons of transactions already sent.
- World-wide mining and trading.
- Zero-knowledge proof technology.
Last Friday there were reports that South Korea has banned ICOs due to concerns over the potential for financial scams. Though the digital currency hasn't appeared to react to the news just yet, we could be seeing another volatile week ahead for Zcash.