Zcash: Compare pros and cons
Anonymous coins are seen as key to the crypto era, which aims to put people in control of their wealth without the interference of governments and regulators. There are many coins with this feature on the market today, and the two most popular are Zcash (ZEC) and Monero (XMR). In this article we will look at their features, pros and cons to see which is the best “bet”.
Monero (XMR) is a cryptocurrency developed based on the Proof-of-Work (PoW) algorithm. Launched in April 2014 under the original name BitMonero, this coin uses the CryptoNote protocol. Almost 5 days after ByteCoin’s fork, it was replaced by Monero. Here’s how it works: “shuffle” the transaction, then send/receive it to the default address. This means transactions cannot be attributed to users or their true identities.
How does Monero ensure data protection?
Monero uses ring signatures, secret transactions, and hidden addresses to hide transaction details, including start and end points. XMR coins are homogenized and cannot be traced back to their origin using blockchain miners.
Important safety feature
– Signature Ring: Usually every transaction on the blockchain must be signed with a public key. The public key is an alias and risks being identified by the user. However, in a ring signature, these keys are combined and each of them can authorize transactions. That means the transaction is signed, but the public key is unknown to the user.
– Secret Transaction Round (ringCT): Monero uses multiple inputs and outputs to hide transactions, and ringCT ensures there are no double-spend issues in the process. RingCT encrypts funds sent from one account to another. Only XMR recipients can decrypt this value. This information is sent in the ecdhInfo section of the transaction. However, nodes must verify transactions and can do so with Pedersen commits. This allows a node to verify that at least one transaction has the same deposit amount received (minus transaction fees). RingCT also guarantees that the total number of transactions is greater than zero and that no one uses a “minus” value to create new coins.
– Hidden Addresses: Addresses are randomly generated for each transaction on behalf of the recipient. The Monero software checks all payments to see if they belong to the recipient and if so, grants access. This means transactions are kept secret from users except the sender and receiver.
Every part of XMR is identical and interchangeable. With Bitcoin, each coin can be traced back to its origin based solely on a complete transaction history. In addition, it can identify illegal activities or corporate embezzlement issues. However, this does not work with Monero, as not all XMR coins can be traced back to blockchain miners.
Transactions are anonymous by default, and as the transaction increases, the encrypted level increases. This increases privacy and helps protect transactions from detection. This is a great advantage as it proves that the effectiveness of security procedures will increase over time.
An article was recently published highlighting the drawbacks of Monero’s anonymity element. Researchers can identify transactions accurately up to 90% of the time, even if they are supposed to be anonymous. The Monero code has been updated and this figure has been halved.
Due to its strong security features, very few wallets support Monero. However, it exhibits default anonymity and is a positive sign that users are more privacy conscious. To be successful in the long term, further development is needed in this area.
Zcash (ZEC) is a cryptocurrency based on the PoW algorithm, capable of anonymous transactions and released in October 2016. This coin uses a public blockchain but transaction numbers and shipping addresses. /receive always stores anonymous elements. Data protection is optional and not set by default. It is based on Bitcoin Core encryption but uses more sophisticated techniques to ensure transactions are received without exposing all data. The underlying technology is called CryptoNote.
How does Zcash ensure privacy?
Zcash is based on a zero-knowledge technology called zk-SNARK. This technology can be understood simply like this: you perform a mathematical operation and don’t need someone to do it again, then a zero-knowledge proof will help you ensure that the statement is 100% true and there is no disclosure. Others. This means transactions are confirmed without revealing any data.
Important safety feature
Zk-SNARK: This attestation allows nodes to guarantee network integrity even when transactions are fully encrypted. They use hash functions to verify that the information is correct without having to disclose it. Then use nodes to verify that the transaction is authentic and correct. More importantly, the random method in Zcash is determined by the cryptographic protocol.
There are many wallets that support Zcash including Ledger, Trezor and many internet wallets available. This allows widespread use of ZEC as users have more options to protect their coins.
In theory, Zcash has the potential to be a powerful anonymous coin. This is because crypto software can verify transactions without providing data to the public with great accuracy. On the other hand, Monero tries to make it more difficult for users to verify actual transactions. But it’s pretty easy to do.
Zcash uses two different types of addresses: “z” for anonymous and “t” for public. Exchanges using only “t” addresses and large reserve wallets are for “t” addresses and are subject to lower fees. Most users use this transparent address to make it more transparent than private transaction addresses. Additionally, complete anonymity is reserved for transactions where both addresses are masked. This is a serious problem for Zcash as an unknown coin because the features themselves are not widely used and not recommended.
Both cryptocurrencies use advanced techniques and algorithms to facilitate private transactions. In theory, Zcash has a lot of potential because of its unlimited transaction power. However, its security factor is not used in most transactions, and there are different levels of anonymity depending on whether the sender and receiver use the same “z” address. In contrast, Monero transactions are anonymous by default, which encourages their wider use and provides greater network security. While there are some trade-offs on how this is achieved, Monero is currently a better anonymous coin than any other in this space.
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