Project basic information
Zcash is a cryptocurrency aimed at using cryptography to provide enhanced privacy for its users compared to other cryptocurrencies such as Bitcoin.
Zcash is based on Bitcoin's codebase. It shares many similarities, such as a fixed total supply of 21 million units.
Transactions can be "transparent" and similar to bitcoin transactions in which case they are controlled by a t-addr, or they can be "shielded" and are controlled by a z-addr. A shielded transaction uses a type of zero-knowledge proof called zk-SNARKs, which provides anonymity to the coin holders in the transaction. Zcash coins are either in a transparent pool or a shielded pool. As of December 2017 only around 4% of Zcash coins were in the shielded pool and at that time most cryptocurrency wallet programs did not support z-addrs and no web-based wallets supported them. The shielded pool of Zcash coins was further analyzed for security and it was found that the anonymity set
can be shrunk considerably by heuristics-based identifiable patterns of usage.
Zcash affords private transactors the option of "selective disclosure", allowing a user to prove payment for auditing purposes. One such reason is to allow private transactors the choice to comply with anti-money laundering or tax regulations. "Transactions are auditable but disclosure is under the participant's control. The company has hosted virtual meetings with law enforcement agencies around the U.S. to explain these fundamentals and has gone on the record of saying that "they did not develop the currency to facilitate illegal activity".
While miners receive 80% of a block reward, 20% is given to the "Zcash development fund": 8% to Zcash Open Major Grants, 7% to Electric Coin Co., and 5% to The Zcash Foundation.