What is ZCash (ZEC)?

The rise of privacy in the crypto world stemmed from users' desire to protect not only their transactions but also their identities. When Bitcoin, with its open-ledger structure, failed to fully address this need, privacy-focused alternatives emerged. ZCash was one of the pioneers of this movement.

ZCash, or ZEC for short, is a privacy-focused cryptocurrency. Its key feature is the ability to adjust the privacy level of transactions based on user preferences. Launched in 2016 by the Electric Coin Company (ECC), ZCash was developed as an alternative to Bitcoin's public ledger model. Its goal is to provide a secure digital cash solution that allows users to protect their financial information. As a Layer-1 blockchain, ZCash is considered a pioneer of the privacy coin category.

Definition and Origins of ZCash

What is ZCash? ZCash is a cryptocurrency that provides users with optional privacy. Users can conduct their transactions transparently, just like Bitcoin, or they can make their transactions completely private by encrypting them. The technology that makes this possible is the zk-SNARK protocol, which ZCash stands for. zk-SNARK, short for "Zero-Knowledge Succinct Non-Interactive Argument of Knowledge," is an advanced cryptographic proof method that allows proving the validity of a transaction without revealing any information. ZCash uses this zero-knowledge proof technique to encrypt transaction data (sender, recipient, and amount) on the blockchain; however, the authenticity of the transaction can still be proven within the network's consensus rules. This allows users to protect their financial privacy if they so choose, while maintaining network security and verifiability.

So, how did ZCash come about? The ZCash project originated from academic foundations. In 2013, cryptography expert Matthew Green and his team at Johns Hopkins University proposed the Zerocoin protocol to add privacy to Bitcoin. This concept was later developed, renamed Zerocash, and eventually evolved into ZCash, an independent blockchain. ZCash's software development was led by the Zerocoin Electric Coin Company, founded under the leadership of computer security expert Zooko Wilcox-O'Hearn. The project officially launched in October 2016 with approximately $3 million in funding from Silicon Valley investors. The ZCash network began producing its first blocks on October 28, 2016, marking the launch of this new privacy-focused cryptocurrency, born from a fork of the Bitcoin codebase. Unlike Bitcoin's open-ledger structure, ZCash, with its slogan "encrypted electronic cash," was hailed as the first cryptocurrency to enable fully private peer-to-peer payments.

What is its technical basis and purpose? ZCash is technically based on Bitcoin's code structure and has a similar maximum supply of 21 million ZEC. While similar to Bitcoin in terms of block times, consensus mechanism, and mining algorithm (for example, ZCash uses an ASIC-resistant Proof-of-Work algorithm called Equihash), its key difference is its optional privacy feature. ZCash's developers launched this project because they believed Bitcoin's public transaction ledger could pose privacy concerns. Therefore, the goal of ZCash was to bring the privacy dimension lacking in Bitcoin to the blockchain ecosystem and offer users a digital currency alternative that they could wear as an invisibility cloak if necessary. Consequently, ZCash emerged as a groundbreaking initiative in the privacy-focused cryptocurrency space.

ZCash History: Major Milestones

Since the launch of ZCash, the project has gone through many significant milestones, both technologically and from a community perspective. Here are the major milestones in the history of ZEC coin:

• 2016 - Launch and first blocks: The ZCash mainnet was launched in October 2016. The network's first blocks were generated through a unique setup process called the "Genesis Ceremony." This key ceremony involved six different individuals contributing to the system without the knowledge of each other, and then destroying the private key fragments used. The goal was to securely establish the initial parameters and ensure that no single individual possessed a master key that could exploit the system. The launch of the ZCash mainnet generated significant excitement in the crypto community, generating strong demand from miners and investors. Indeed, within the first week after the launch, the ZEC token price reached astronomical levels, exceeding $5,000. With this value, ZEC set its own all-time high price (ATH) record in its first days. (This initial high price was a temporary phenomenon due to the small amount of ZEC in circulation. Over time, as the supply increased, the price decreased to more reasonable levels.)
• 2017 - Listing on exchanges and price peak: 2017 was a year of growth and recognition for ZCash. Many major cryptocurrency exchanges began listing ZEC; for example, ZEC trading became available on platforms such as Kraken, Poloniex, and Bittrex, which were popular global exchanges at the time. With access to a wider investor base, the ZCash price entered a strong upward trend. Especially during the general crypto market rally at the end of 2017, ZEC gained significant value. Reaching levels of approximately $740 in December 2017, ZEC briefly reached a second peak in January 2018, reaching $950. This period was one of the most popular periods for ZCash among institutional and individual investors. 2018 - Decline and Technological Advances: 2018 was a year of general correction in the crypto market, and the ZEC price was also affected by these fluctuations. The value of ZEC experienced significant declines throughout the year, dropping to around $50. However, ZCash technology did not stagnate; on the contrary, significant updates were implemented during this period. In October 2018, a protocol upgrade called Sapling was activated. Sapling was a next-generation ZK-SNARK development that made ZCash's confidential transactions lighter and faster. This increased the performance of shielded transactions and significantly reduced memory usage. Sapling made it easier for ZCash wallets to support shielded transactions, especially in mobile environments. In short, 2018 was a year of strengthening ZCash's technical infrastructure, in addition to price fluctuations.
• 2019 - Blossom Update: In December 2019, the ZCash network implemented its third major protocol update, Blossom. The primary goal of the Blossom upgrade was to improve the network's scalability and ease of use. With this update, block time was reduced from 150 seconds to 75 seconds, approximately doubling its speed. While blocks were generated more frequently, the total ZEC supply schedule remained unchanged; to achieve this, the reward per block was halved (thus, while blocks arrived twice as fast, the amount of ZEC generated per unit of time remained the same). Thanks to Blossom, transaction confirmation times were reduced, network capacity and transaction throughput increased, and transaction fees were kept low. During this period, ZCash developers stated that they had begun preparing the infrastructure necessary for the network's long-term scalability, and Blossom was the first step in this journey. The Blossom update, released in the second half of 2019, was seamlessly adopted by the ZCash community and successfully increased network performance.
• 2020 - Heartwood update: The Heartwood protocol upgrade, launched in July 2020, introduced two significant improvements to the ZCash network. First, a feature called ZIP-221 (Flyclient) has made it easier for the ZCash blockchain to interact with light clients and other blockchains. Flyclient uses a new cryptographic record (Merkle Mountain Range) added to block headers, allowing third-party applications or light wallets to verify network transactions using significantly less data. The second major innovation is ZIP-213 (Shielded Coinbase). This feature allows miners to receive block rewards directly to a shielded address. Previously, block rewards were required to go to transparent addresses, requiring the amount of ZEC earned by miners to be publicly available. Thanks to the performance improvements brought by the Sapling update, Coinbase transactions can now be sent to shielded addresses. Shielded Coinbase was a significant step in enhancing the privacy of the ZCash network, allowing miners to contribute to anonymity by keeping their earnings private if they wish. The Heartwood update generally improved ZCash's integration with the outside world (e.g., cross-blockchain communication, light wallets) and advanced network privacy.
• 2020 - First halving and Canopy: In late 2020, ZCash experienced its first block reward halving, which occurs approximately every four years, similar to Bitcoin. This halving, which occurred in November 2020, reduced the block reward from 6.25 ZEC to 3.125 ZEC. The protocol update, Canopy, was also activated during this period. The most significant aspect of Canopy was the end of the Founders' Reward period, which lasted for the first four years, and the transition to a new Development Fund model. Now, 80% of mined ZEC goes to miners, while the remaining 20% ​​is distributed to ECC, the Zcash Foundation, and community-supported grant programs. This change aimed to ensure that the long-term financing of ZCash's development is community-driven and transparent.
• 2021 - Halo Arc and a pioneering cryptography move: In 2021, the ZCash team focused on a next-generation zero-knowledge proof system, called Halo 2. Developed by ECC researcher Sean Bowe and his team, the Halo protocol simultaneously addressed two long-awaited challenges in the zero-knowledge world: eliminating the need for trusted setup and making privacy scalable. Announced in 2019, Halo was prepared for integration with ZCash in 2021-2022. This technology gave the ZCash network a new protected transaction protocol called Orchard. Network Upgrade 5 (NU5), implemented in May 2022, integrated the Orchard protocol into the mainnet, and the Halo 2 proof system began to be used. Unlike previous zk-SNARK systems, Halo eliminates the need for trusted ceremonies that had to be repeated with every major update. It also allows the recursive proof method to aggregate the proofs proving the validity of a transaction into a single chain of evidence. This, in theory, means that the validity of multiple transactions can be proven at once, making the blockchain more efficient and scalable in the long run. In short, the Halo protocol not only increased user trust in ZCash (by eliminating the need for trusted ceremonies) but also laid the groundwork for future interoperability with different blockchains and high-throughput confidential transactions.
• 2022 - NU5 activation and Orchard / Unified Address: In May 2022, with Network Upgrade 5 (NU5), the Orchard protocol became available on the mainnet; the Unified Address (UA) system was also introduced, providing users with "transparent and protected" transaction support through a single address.
• 2023 - ECC restructuring and governance changes: The ECC reduced some of its operational areas; At the end of 2023, there were leadership changes, such as Zooko Wilcox stepping down as CEO and Josh Swihart taking over. The Zcash Foundation also intensified its budget and governance processes for community grants. (For example, the foundation approved a $250,000 grant in its Q4 2023 report.)
• 2024 – Zashi wallet, NU6 & Dev Fund model change: ECC introduced its own mobile wallet, Zashi. The NU6 upgrade was implemented at the end of 2024, restructuring block rewards and making the Dev Fund structure more community-focused.
• 2025 (January–September) - Zcashd deprecation, preparation for NU6.1, focus on community funds: The Zcashd client is scheduled to be deprecated in 2025; full nodes are migrating to Zebrad, and Zallet is the new official wallet. The NU6.1 upgrade has been approved; The block upgrade date has not yet been determined, and some JSON-RPC changes are expected. Furthermore, the current Dev Fund model is scheduled to expire in November 2025, and the community is discussing how to complete protocol revisions in time for the Dev Fund's transition to the new model. Meanwhile, the 2025/6 protocol roadmap has been published, and ECC and ecosystem stakeholders have included technological developments, particularly quantum-resistant changes, in their plans.

As of October 2025, ZEC price is changing hands at around $170.

Why is ZCash Important?

There are several key elements that make ZCash unique and place it in a special place in the crypto world. They can be examined under the following headings:

Privacy

ZCash's most important feature is that it offers its users strong financial privacy. In traditional blockchains like Bitcoin, all transactions and balances are transparent; anyone can view an address's history and transaction amounts on-chain. ZCash, however, has changed this through shielded transactions. Thanks to zk-SNARK technology, the sender's address, recipient's address, and the amount sent in ZCash transactions are fully encrypted. An outside observer of such a transaction knows that the transfer occurred and is valid, but cannot obtain any information about the parties or the amount. This level of privacy technically distinguishes ZCash from other privacy coins like Monero, as privacy is optional, not mandatory, in ZCash. Users can choose to transact using transparent (t-addr) addresses or protect their privacy with stealth (z-addr) addresses. This flexibility makes ZCash an attractive solution for both individuals seeking complete anonymity and organizations seeking auditability when necessary. For example, a user might want to make some transactions public for tax or legal reasons, but hide other private transactions – ZCash leaves this choice up to the user. Shielded transactions hide the sender and recipient information, while transparent transactions, like Bitcoin transactions, are public. This dual structure gives ZCash users control: the degree of privacy is entirely yours!

Pioneering Cryptography

ZCash has revolutionized the implementation of zero-knowledge proofs in a real blockchain environment. ZCash marks the first time zk-SNARK technology has been used in a cryptocurrency protocol. Therefore, ZCash is considered an innovative project in the cryptography community. Many prominent figures from the academic world have participated in the development of ZCash. Cryptographers, mathematicians, and computer scientists have contributed to the ZCash protocol. In fact, the ZeroCash whitepaper, which forms the basis of the project, is a collaborative effort by world-renowned cryptography researchers. This scientific approach increases confidence in ZCash's security and privacy levels. For example, in 2022, the infamous NSA whistleblower Edward Snowden revealed that he secretly participated in ZCash's 2016 launch ceremony under a pseudonym.

Security and Technical Robustness

Because ZCash is a fork of the Bitcoin code, it has an extremely robust infrastructure in terms of fundamental security principles. ZCash inherited Bitcoin's proven consensus mechanism and distributed ledger structure. PoW (proof-of-work) mining ensures the honest majority protects the network; ZCash also aims to make ASIC mining more difficult with the Equihash algorithm, allowing a wider audience to participate. This balance between decentralization and security is achieved. Every transaction on the ZCash network, whether transparent or private, is cryptographically verified and immutably recorded on the blockchain. This security is also ensured by zk-SNARKs (cryptographic proof that the transaction complies with the rules). Furthermore, protocol updates (Sapling, Heartwood, etc.) have continuously improved both performance and security vulnerabilities over the years. ZCash has been an active blockchain for over eight years and has proven itself. It is noteworthy that no serious security breaches have occurred to date.

Uses and Functionality

ZCash's privacy features make it a preferred digital currency in certain scenarios. Using the ZEC token can be particularly advantageous in situations where financial privacy is paramount. For example:

• Individual payments: If you prefer not to have your balance and transaction history visible when sending money or making purchases, ZCash's shielded transactions are perfect for you. Users who prioritize privacy can achieve financial privacy by using ZEC for their daily spending.
• Corporate and commercial transfers: In transfers between companies or institutions, it may be desirable to keep the amount confidential to competitors or external parties. For example, confidentiality of payments and contract amounts in a supply chain can be crucial for competitiveness. ZCash can also be useful in the business world by providing a layer of privacy for these types of corporate payments.
• Donations and charitable giving: Philanthropists who wish to donate without revealing their public identity can make anonymous donations with ZCash. Similarly, non-governmental organizations or activist movements can protect the identities of their supporters by using ZCash payments.
• Research and development: The ZCash protocol is serving as a pilot project in academic and industrial research. For researchers working on privacy technologies (e.g., zero-knowledge proofs, recursive proofs, etc.), the ZCash network is like a living laboratory. Innovations in ZCash enable testing of methods that could be used in future digital identity, voting systems, or other blockchain applications.

ZCash Developers and Community

One of the most important factors that makes a crypto project successful is its development team and community support. ZCash has a rich history and structure in this regard.

The core development team of the ZCash protocol is the company. Initially founded as the Zerocoin Electric Coin Company, the company changed its name to the Electric Coin Company in February 2019. While ECC is a for-profit company, its primary mission is to develop and maintain the ZCash protocol. Its CEO and founder, Zooko Wilcox, is a well-known figure in the crypto world and has been pushing ZCash's vision forward for years. ECC employs numerous cryptographers, engineers, and researchers. Innovations like Halo, in particular, are the product of ECC's R&D team. ECC manages the official ZCash code repository (zcashd) and releases regular software updates. The company also works to promote, promote, and increase ZCash's adoption globally.

Founded in 2017, the Zcash Foundation is a non-profit organization that plays a key role in the ZCash ecosystem. Its mission is to support the open-source development of the ZCash protocol, fund community initiatives, and protect the interests of the ZCash network. The Zcash Foundation contributes to the ecosystem through an independent developer team (they are developing an alternative ZCash client software called Zebra) and grant programs. As a coordinated but separate entity from the ECC, it strengthens the network's decentralization. The Zcash Foundation board consists of academics, technology experts, and community representatives. The Foundation also plays an active role in wallet integrations, education, and legal advocacy. For example, it undertakes tasks such as providing funding to wallet developers to increase ZCash adoption and defending the rights of ZCash users in regulatory debates.

Furthermore, ZCash is supported by a global community. Volunteer developers, translators, content creators, miners, and users are integral parts of this ecosystem. On Zcash's official forum (Zcash Community Forum) and other social platforms, many people discuss the project, offer improvement suggestions, and provide feedback. Some projects originating from the community (e.g., community-driven information platforms like ZecPages and ZecHub) aim to facilitate and expand the use of ZCash. Furthermore, a community-driven grant program called Zcash Community Grants provides funding for new ideas and projects. Through this mechanism, any developer can apply for funding for a project that contributes to the ZCash ecosystem and, with community approval, receive a grant.

Because the heart of the ZCash project stems from academia, relationships with universities and researchers have always been strong. The project's original founding team included cryptographers from institutions such as Johns Hopkins and MIT. Currently, the Zcash Foundation and the ECC support various academic conferences, organize scholarship programs, and contribute to next-generation cryptography research. For example, academic publications related to ZCash are emerging on topics such as zero-knowledge proofs, advanced cryptographic protocols, and network security. This keeps ZCash under constant scientific scrutiny, helping it maintain its credibility and innovation.

Decisions within the ZCash ecosystem are discussed and made through improvement proposals (ZIP). ZIP processes operate openly, inviting feedback from the community and all relevant stakeholders. For example, changes to the mining reward distribution model (as in the Canopy update) or the addition of a new feature are first submitted as a draft ZIP, followed by technical assessments and community feedback, and then implemented with the consensus of the ECC and the Foundation. ZCash follows a multi-stakeholder model in terms of its governance structure: in addition to the ECC and the Foundation, organizations like the Bootstrap Project, founded in 2020, are also involved in the governance process. (Bootstrap is an initiative to transfer ECC's ownership structure to a foundation-like structure; ECC shareholders transferred the company to a charity-like structure called Bootstrap. This has transformed ECC's for-profit structure into a community-driven structure.)

In conclusion, in response to the question, "Who is the founder of Zcash?": While Zooko Wilcox is the founder and thought leader of Zcash, today ZCash is being developed collectively by a broad ecosystem rather than being tied to a single person or company.

Frequently Asked Questions (FAQ)

Below are some frequently asked questions and answers about ZCash:

• What is ZCash, and when was it released?: ZCash is a cryptocurrency known for its privacy features. It was first released in October 2016 by the Electric Coin Company. ZCash, a fork of Bitcoin, is a digital currency solution that allows users to choose whether to hide or make their transactions transparent.
• Who developed ZCash?: The development of the ZCash project was led by the Electric Coin Company (ECC), led by Zooko Wilcox. The project's foundation is based on academic research and stems from the cryptographic work of Matthew Green and his team at Johns Hopkins University. Currently, volunteer developers from around the world, including ECC and the Zcash Foundation, contribute to ZCash's development.
• What technology does ZCash use?: ZCash uses zero-knowledge proof technology called zk-SNARK to ensure the privacy of transactions. This way, transaction details are encrypted and hidden while remaining verifiable by the network. Furthermore, ZCash is a derivative of Bitcoin in terms of its technical infrastructure; it uses proof-of-work as a consensus mechanism and uses the Equihash algorithm for mining. The Halo 2 protocol, integrated in 2022, further advanced privacy technology by eliminating the need for a trusted setup.
• What is the ZEC token used for?: ZEC is the native cryptocurrency of the ZCash network. Its primary purpose is to transfer value. In other words, just like Bitcoin, you can make digital payments, send, and receive money with ZEC. The difference is that these transfers can be made private, if desired. In addition to providing users with financial privacy, the ZEC token is also used to pay transaction fees on the network. In short, ZEC is both the currency and the transaction medium of the ZCash blockchain.
• Is ZCash suitable for investment?: The answer to this question varies from person to person and depends on your financial risk preferences. ZCash holds a respected position in the crypto world because it's a technologically innovative and well-established project. As a privacy-focused coin, it has a niche market where it can find demand. However, there are some points to consider when evaluating it from an investment perspective: the price of ZEC has fluctuated significantly in the past (both rapid increases and significant decreases). Furthermore, due to regulatory pressures on privacy coins, listing on some exchanges poses risks. Therefore, before investing in ZCash or any cryptocurrency, you should always conduct your own research and consider your risk tolerance. Even if the project is successful in the long term, market conditions may not always meet investor expectations. Ultimately, ZCash can be a suitable asset in your portfolio as a coin whose technology you believe in; however, its suitability depends on your financial goals and risk management.
• What are the uses of ZCash?: ZCash's uses are generally in scenarios where financial privacy is required. Individual users can use ZEC if they want privacy in their daily payments. For example, ZCash is ideal for not disclosing the amount of a cryptocurrency transfer you make to someone or your identity. In the business world, ZCash can be used for secret agreements, procurement payments, or financial information that needs to be kept secret from competitors. ZCash also stands out in international money transfers, fundraising campaigns, or payment situations where there's a risk of censorship. Technically, ZEC, like other cryptocurrencies, can be held and transferred in digital wallets; the difference is that the traces of these transfers can be optionally hidden. This makes ZCash particularly indispensable for use cases where freedom and privacy are paramount.

Continue reading the JR Crypto Guide series to stay up-to-date on the latest developments in ZCash and privacy-focused blockchain projects.