Is Zcash the same as other privacy coins like Monero?
Even though all privacy-centric coins aim to improve on the anonymity of crypto transactions, how each coin approaches the problem is different.
For instance, while Zcash- a fork of Bitcoin- attempts to solve the issue of anonymity through the use of a zero-knowledge privacy protocol called zk-SNARKS, Monero takes on a different approach with a protocol called CryptoNight Proof of Work.
The Monero protocol obscures wallet transactions on the public blockchain to hide them from third parties.
More About Zcash
Founded in October 2016 by Zooko Wilcox, Zcash is a cryptocurrency that supports private transactions on a public blockchain. Through Zcash, corporations, as well as individuals, get total control over who gets access to the details of each transaction they make on the Zcash blockchain.
Although Zcash is built as a fork of Bitcoin, it adds a layer of privacy through the use of strong scientific principles that enable users to choose between completely transparent or private transactions.
Zcash uses cryptographic zero-knowledge proofs to create encrypted private addresses that are used to send and receive transactions.
The Zcash blockchain is based on a zero-knowledge proof protocol. Through this method, one party on the blockchain network can prove to the other, knowledge or possession of a secret without revealing any information about that secret.
For instance, if Bob who owns a crypto casino would like to verify if a customer named Alice is above 18 years and therefore eligible for gambling online, he would have to request for Alice’s identification documents to prove that she is of legal age.
However, with zero-knowledge proof, Alice can prove that she is of legal age without revealing her age or any sensitive details about her identity to Bob.
In such a case, Bob would be the verifier and Alice the prover. Without zero-knowledge proof, the only way for Bob to verify Alice’s identity is to have her private key thus revealing Alice’s sensitive details to Bob. That would leave Alice vulnerable to attacks.
With zero-knowledge however, Bob can send Alice an encrypted secret message that can only be decrypted by Alice’s private key.
Once Alice is able to decrypt that message with her private key, she can prove ownership or knowledge of her private key without revealing the details of the private key to Bob, and Bob can verify Alice’s identity without having knowledge of her private key.
In summary, a zero-knowledge proof guarantees the privacy of both parties interacting on a blockchain.
What are zk-SNARKS?
Zcash goes a step further and uses “zk-SNARKS” (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge), a technology which is a novel form of zero-knowledge cryptography that guarantees privacy without the interaction of both parties.
Not only does zk-SNARKS enable a party to prove possession of secret information without revealing the details of that information but it also prevents any interaction between the prover and the verifier thus further boosting the strength of privacy between both parties.
The previous zero-knowledge proof protocol required multiple rounds of interaction between the prover and verifier as a way of establishing proof and guaranteeing absolute privacy. However, zk-SNARKS uses a ‘non-interactive’ formula where proof and privacy is achieved with a single message sent from the prover to the verifier.
At the moment, zk-SNARKS is the most efficient and secure method of producing zero-knowledge proofs on the blockchain.