As a barrier between the fusion of virtual currency and traditional finance, Zcash It is gaining recognition as an alternative to Bitcoinsaid Will Owens, research analyst at Galaxy Digital.
Although the privacy-focused cryptocurrency is much smaller than $2 trillion worth of cryptocurrencies, Zcash borrows fundamental elements from Bitcoin's codebase and acts as a spiritual successor in some ways, Owens wrote on Tuesday. report.
Zcash allows users to “secure” the following transactions: zero knowledge proofand the network's ability to support anonymous activity resonates with some people who fear Bitcoin will become centralized through Wall Street adoption or are wary of on-chain surveillance, Owens wrote.
Since its debut in 2016, Zcash has underperformed Bitcoin for most of that period. Still, Zcash's price has risen nearly 10 times in the past two months, from $40 to $396, after hitting a seven-year high of $376 in October, according to the cryptocurrency data provider. CoinGecko.
Owens emphasized how Zcash is positioned as an alternative to Bitcoin. Critics of the massive asset argue that exchange-traded funds (ETFs) erode Bitcoin's ability to serve as electronic cash in the United States because of its reliance on centralized institutions such as custodians.
“Bitcoin itself has always been fully transparent, but ETFs have not made it less transparent, just more intermediary,” Owens wrote. “In contrast, Zcash proponents frame it as ‘crypto-Bitcoin,’ a return to cypherpunk principles that resonate in the face of rampant on-chain surveillance.”
Zcash was forked from the Bitcoin codebase and inherited a supply cap of 21 million. Proof of Work Consensus The issuance rate is cut in half every four years. But when it comes to shielded transactions, Owens wrote that Zcash “directly addresses the broad privacy restrictions” that Bitcoin's pseudonymous creator Satoshi Nakamoto once acknowledged.
Bitcoin users have long focused on CoinJoin, a privacy strategy that bundles funds into a single transaction to obfuscate the flow of funds to users. In the US, wallets offering that service, such as Samourai and Wasabi, are facing “increasing regulatory pressure,” Owens wrote.
Federal prosecutors announced earlier this week that they are seeking: maximum punishment Samourai founders Kionne Rodriguez and William Lonergan Hill were arrested last year and have since pleaded guilty Conspiracy to operate an unlicensed money transmitter.
A month after Samourai's founder was arrested, Wasabi prohibited Announced pre-emptive closure of privacy protection services for US customers.
Owens noted that while the fundamentals of Zcash haven't changed recently, perceptions about the technology have. He also noted the “constant support from some of the top voices in the crypto world.” Contains “We're excited to be partnering with Solana,” said Merct Mumtaz, CEO of Solana infrastructure company Helius Labs.
“I love privacy stuff because it really makes a difference in the privacy properties of these systems,” Mumtaz told X.
Mumtaz mentioned the core Zcash dynamics. This means that as more people participate in shielded transactions, their funds end up in the same so-called pool, increasing the privacy of the network.
“The larger the shielded pool, the harder it is to trace flows,” Owens wrote, noting that 30% of Zcash’s supply is shielded. “A greater set of anonymity means greater privacy.”
Zcash is the largest privacy-focused cryptocurrency by market capitalization, with a total value of $6.5 billion, according to CoinGecko. Its biggest competitor is Monero and litecoincurrently worth $6.44 billion and $6.43 billion, respectively.
As Zcash soars, there is renewed interest in other privacy-focused cryptocurrencies. dash And Decred. Over the past week, Dash is up 162% to $122, while Decred is up 139% to $41 over the same period.
