Zcash is a decentralized cryptocurrency focused on privacy and anonymity. It was launched in 2016 as a fork of Bitcoin, with the added feature of shielded transactions that allow users to transact without revealing the sender, receiver, or transaction amount on the blockchain. Zcash uses advanced cryptographic techniques, namely zk-SNARKs (zero-knowledge succinct non-interactive arguments of knowledge), to ensure the privacy of its users. This feature makes Zcash unique among cryptocurrencies by offering users the choice between transparent transactions, similar to Bitcoin, and shielded transactions for privacy.

Consensus Mechanism

Zcash uses the Proof-of-Work (PoW) consensus mechanism, similar to Bitcoin, to secure its network. Miners compete to solve complex cryptographic puzzles, and the first to solve the puzzle gets to add a new block to the blockchain, receiving Zcash tokens (ZEC) as a reward. The PoW mechanism ensures network security and decentralization but also means that, like Bitcoin, Zcash requires substantial computational resources for mining. Zcash initially used the Equihash algorithm, designed to be ASIC-resistant to encourage more decentralized mining; however, ASIC miners have since been developed for Equihash, leading to debates within the community about mining centralization.

Protocols

The core protocol feature of Zcash is its implementation of zk-SNARKs, which allows the network to maintain a secure ledger of balances without disclosing parties or amounts involved in transactions. This technology enables Zcash to offer two types of addresses: transparent addresses that operate similarly to Bitcoin, with the full details of transactions visible on the blockchain, and shielded addresses that hide transaction details. The ability to choose between transparent and shielded transactions gives users control over their privacy.

EVM compatibility 

Zcash (ZEC) itself is not directly Ethereum Virtual Machine (EVM) compatible because it operates on its own blockchain with a different consensus mechanism and architectural design focused on privacy. The Zcash blockchain is built to support private transactions using zk-SNARKs, without the EVM's smart contract capabilities.

However, there are ways to bridge assets between Zcash and EVM-compatible blockchains or to create wrapped versions of ZEC that can operate on EVM-compatible networks. These solutions involve third-party services or specific blockchain protocols designed to enable cross-chain interoperability. This allows ZEC or its equivalent value to be used within the Ethereum ecosystem, enabling ZEC holders to interact with decentralized applications (dApps) on EVM-compatible chains.

Use Cases

Zcash's primary use case is as a privacy-centric digital currency that allows users to make transactions with a high degree of anonymity. This feature is particularly appealing for individuals and organizations that require privacy for their financial transactions due to concerns over surveillance, corporate espionage, or personal safety. Beyond its use as a cryptocurrency, the underlying technology of Zcash, particularly zk-SNARKs, has potential applications in secure voting systems, confidential business processes, and various other use cases where privacy and the integrity of data are crucial.

Distinctive Features

Zcash's most distinctive feature is its strong emphasis on privacy, enabled by zk-SNARKs. This sets it apart from other cryptocurrencies that record all transaction details transparently on the blockchain. Zcash offers users the ability to transact without exposing sensitive financial information, providing a level of privacy that mirrors the discretion of traditional financial transactions while benefiting from the security and decentralization of blockchain technology.