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Key Takeaways

Zcash (ZEC) is a cryptocurrency forked from Bitcoin in 2016, designed to offer enhanced user privacy.

The network uses a technology called zk-SNARKs, which is a security protocol that allows transactions to be verified without revealing the sender, recipient, or amount.

Zcash uses the Equihash algorithm for mining, which differs from Bitcoin’s SHA-256, and is best mined using Application-Specific Integrated Circuits (ASICs).

Zcash uses a mining algorithm called Equihash. This is different from Bitcoin’s SHA-256, so miners need specific hardware to mine ZEC.

Introduction

Launched in 2016 by Zooko Wilcox O'Hearn and a group of scientists, Zcash began as a project called Zerocoin (later Zerocash). It was built as a hard fork of the Bitcoin codebase with a specific focus on security and anonymity, allowing users to shield their financial data from public view.

How Zcash Works: Privacy and zk-SNARKs

The core technology used by Zcash is a cryptographic tool known as zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge).

In a typical crypto transaction, the network confirms a payment by looking at the sender's address and the amount. It’s like writing a check where everyone can see the details.

In contrast, Zcash offers "shielded transactions,” so you are able to prove you have the money and that you sent it, without actually showing the details. The zk-SNARK technology is used to encrypt the information so the network can say "Yes, this is valid," but nobody else can see the sender, the receiver, or the amount. Still, if users want, they can also make their transactions public, just like Bitcoin.

Hashing algorithms

While Bitcoin uses the SHA-256 hashing algorithm for its Proof of Work (PoW) consensus mechanism, Zcash uses an algorithm called Equihash. This difference means that hardware and software designed for mining Bitcoin are incompatible with Zcash. Also, Zcash uses larger block sizes and different hashing times, aiming for a higher network hash rate.

How to Mine Zcash (ZEC)

Like Bitcoin, Zcash uses a PoW consensus mechanism. ZEC miners have to compete to solve cryptographic problems to produce new blocks and earn block rewards.

While it’s technically possible to mine Zcash coins using standard computers (with operating systems like Linux, Mac, or Docker), the network difficulty has increased significantly since its launch. So, mining ZEC with a personal computer is virtually impossible and rarely profitable.

To mine Zcash effectively, it is recommended to use:

ASIC miners: Application-Specific Integrated Circuits are hardware systems designed specifically for cryptocurrency mining.

Mining pools: By joining a mining pool, miners can combine their computing power to increase efficiency and the likelihood of earning rewards, which are shared proportionally among the pool members.

Who Runs Zcash?

Zcash was originally developed by the Electric Coin Company (ECC). In a move toward decentralization, the ECC transferred the trademark and licenses to the Zcash Foundation. By 2024, the ECC announced its intent to step back further, handing over governance decisions entirely to the Foundation.

However, Zcash’s privacy features also make it more concerning to governments and regulators. This has led to debates about the future adoption of ZEC and other privacy coins in a regulated global economy.

Grayscale Zcash ETF Application

In late 2025, Grayscale, a digital asset manager, submitted an application for a Zcash exchange-traded fund (ETF). If approved, the ETF would allow traditional investors to buy shares representing ZEC through their standard brokerage accounts, without needing to manage crypto wallets or private keys.

Closing Thoughts

Zcash is a crypto project focused on blockchain privacy that uses zk-SNARK technology. Its privacy technology allows people to keep their money transfers confidential without losing the ability to verify transactions.

Further Reading

What Is Bitcoin and How Does It Work?

zk-SNARKs and zk-STARKs Explained 

Hard Forks and Soft Forks Explained 

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