dinbits.com was among the first, if not the first, to start following ZCash a back in January of 2016 and we've featured them in a handful of articles over the past year. Over time they've gained allot of attention due to their all-star team.

They've also blasted into the 2nd (to bitcoin) spot for value with an impressive volume for a new asset and actively trading on exchanges such as Poloniex now.

Courtesy Poloniex

What Is ZCash

This is not your ordinary digital asset. ZCash is based on bitcoin, but adds more privacy for truly anonymous transactions and the ease of satisfying regulatory requirements at the same time. For financial institutions to transact with bitcoin and other digital currency, dealing with regulatory requirements requires recognition data called watermarks. Think of watermarks like sending your drivers license number with each transaction. However, instead of a drivers license number it's a hash that is encoded into the transaction that identifies you and links you to the transaction.

The transaction can then be tracked to its destination and there's a record of you ending this forever locked on the blockchain. Not to worry about companies doing this today, this is encrypted and what they do send wouldn't make any sense to anyone even if it were readable anyway. This has been going on for years.

ZCash makes this a standard feature and takes it a step further where you can choose who can access this information. They call this "selective transparency".

Proceed With Caution

Now, before you sell the farm to invest in ZCash, in their own words:

This technology is still an experiment and it is not yet shown to be safe and stable.

Consider a cautiously optimistic approach to investing or mining ZCash. Just look at the Ethereum disaster with the DAO and the hack that spawned two Ethereum networks that nobody agrees on which one should be called the actual Ethereum. Even bitcoin itself faced a hard-fork its first year. Hardly anyone was paying attention during the latter, and in fact Satoshi himself was still working on the project, the Ethereum debacle is still a mess.

Mining ZCash

Currently, mining is only available for Linux and uses the Equihash proof-of-work model. You can get the mining client and instruction for installation here

ZCash is an exciting new asset and only time will tell if it goes anywhere, but from the looks of things, this coin appears to have allot of potential. Let's face it, it's unlikely that any network will become as powerful as the blockchain (bitcoin) within any reasonable expectation of time, however that doesn't mean other assets cannot be successful and ZCash might be the next Ethereum as far as adoption levels go. There's already cloud mining companies poised to embrace ZCash and there may even be ways to use ZCash with bitcoin's blockchain, that would be very useful.

ZCash is what companies like R3 CEV should have been working on and the financial institutions involved with them should be paying attention to because ZCash is exactly what would be perfect for those entities. Its what banks are trying to build, the difference is that instead of an eventual strong and secure environment, they are planning to privatize their own network to maintain full control of it. The problem with this is that it promote a very dangerous environment lacking security and subject to internal foul play combated by mere paper contracts. They basically want to have their cake and eat it too and with complete disregard to the safety on those trusting them with their financial assets.

Banks are building private networks that have no business in this space, however ZCash certainly has a place in the industry. It does all of the above while allowing the entire population to support the strength of its network. Like bitcoin, its not an actual person or group that does anything when it comes to mining, they only supply the electricity, the software does the rest and over time even simple changes that affect anything are major events. Just look at the bitcoin block size debate. This may seem as a nuisance, but ultimately it is a truly positive thing because making any change to any network that deals with people asset values should be a major event that's not easily accomplished without full consensus.

It's not often dinbits.com says anything positive about a new altcoin, but with ZCash there's simply nothing negative to say with one exception being that the CEO has a unique name (Zooko) but last I checked, that doesn't count against them. Just look at the Winklevoss twins and Gemini. Case in point.

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Image by dinbits.com staff

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