Summary

The undefined website discusses Zcash's history, its privacy features, past forks like ZClassic and ZenCash, the Overwinter upgrade, and the upcoming Sapling upgrade, emphasizing the cryptocurrency's commitment to privacy and scalability improvements.

Abstract

Zcash (ZEC) is a prominent privacy-focused cryptocurrency that utilizes zk-SNARKS technology to ensure transaction privacy. Launched in October 2016 by the Zerocoin Electric Coin Company, it is currently ranked 20th in market capitalization. The article covers previous hard forks that led to the creation of ZClassic (ZCL) and ZenCash (ZEN), each with its own reward distribution model and features. Despite facing challenges such as potential 51% attacks and price volatility, these coins share a common codebase with Zcash. Zcash itself underwent the Overwinter upgrade, a preparatory step for the more significant Sapling upgrade, which introduced features like transaction expiry and replay protection. The Sapling upgrade, expected around ZEC's second anniversary, promises enhanced scalability, remote processing capabilities, improved security, and bug fixes. The article also touches on the regulatory scrutiny faced by privacy coins and Zcash's efforts to increase adoption despite these hurdles.

Opinions

The author suggests that achieving consensus for network upgrades in the cryptocurrency space is complex and often leads to contentious hard forks or soft forks.
There is an opinion that the successful implementation of the Overwinter upgrade and the planned Sapling upgrade demonstrate strong support from the Zcash core team, exchanges, and the community, reducing the likelihood of another split in the cryptocurrency.
The article implies that privacy features, while central to Zcash's value proposition, have not been widely adopted, possibly due to regulatory concerns and public perception.
The author expresses that despite regulatory pressures and the association of privacy coins with illicit activities, privacy remains a core principle of cryptocurrencies and should be preserved.

Zcash forks & upcoming ‘Sapling’ upgrade

As some of you would be aware, Zcash (ZEC) is one of the most well-known privacy-centric digital coins employing the zk-SNARKS protocol — which uses the zero-knowledge cryptographic technology to keep the transactions private on its network. Zcash was launched in Oct. 2016 by Zerocoin Electric Coin Company based on Bitcoin (with added privacy features).

It sits on the 20th spot with a marketcap of $625 million at the time of writing. Hard forks, soft forks, network upgrades or the likes have mostly been controversial in the Cryprtoverse. Reaching a consensus between the team backing a Crypto coin, exchanges listing the coin, developers, investors & general Crypto community is easier said than done & minor hiccups can derail the project or cause a split.

We have seen such a split happen in ZCash itself with its earlier offshoots — ZClassic (ZCL) & Zen Cash (ZEN) parting ways in May 2017. ZCL removed the 20% miner fees (or founders reward) & the slow start mechanism which was implemented on the first 20,000 blocks to minimize the impact should a bug or a security vulnerability was to hit the network.

ZEN, on the other hand, split the mining reward like this — Miners (88%), DAO (5%), Developers (3.5% for), Secure nodes Operators (3.5%). The second difference being the implementation of the secure node system in addition to the normal nodes in Zcash gives the users the ability to send secure messages in the optional memo field of the transactions.

Both ZCL & ZEN have hit roadblocks recently with dangers of 51% attack on ZEN & dramatic price spike & crash for ZCL. The striking similarity between the 3 coins remains the common source code using the same privacy protocol.

Coming back to the unanimous upgrades for Zcash (ZEC), the first one happened on Jun. 26 this year with the move to ‘Overwinter‘ — technically speaking it is more of an intermediary step towards preparing the network for serious upgrades like ‘Sapling‘ expected to be launched later in October this year.

Overwinter upgrade happened at the mining of block no. 347,500 — it does, however, offer some new features like improvement of transactions performed with the addition of ‘transaction expiry’ feature which automatically cancels any ZEC transactions which are not added to the existing block within the predetermined period of 20 blocks (~50 minutes). Other improvements include Versioning & Replay protection for network upgrades.

After the successful implementation of the Overwinter, the company laid out a two-year road map which includes steps towards further decentralization, dedicating more resources to Research, development & marketing with the main focus being the adoption of “privacy-by-default” approach.

Despite public perception about privacy based features their use is not that wide-spread. Considering the support that Overwinter has received from the core team of developers, digital exchanges & the general community it looks unlikely at this point that the upcoming Sapling hard fork will result in a further split of the Cryptocurrency.

Let’s talk a little bit about the new features being introduced with Sapling upgrade or version 2.0.0 which was released on Aug. 16th. As per the blog block no. 419200 will be the first block to be mined with the new upgrade somewhere around Oct. 28, 2018 (2nd anniversary of ZEC). Some of the salient features of the hard fork include:

Improved scalability — significant reduction in the storage requirements for the private translations

Remote processing — adds support for remote procedure calls whereby remote access to a computer is possible when called locally, however this upgrade would be fully available in the version 2.0.1

Added security — an upgrade to the zk-SNARKS protocol to offer improved security features

Bug fixes — to address the issue of slow nodes syncing & the ignoring invalid transactions

And to end it all here is a look at the daily chart of the ZEC for some technical levels and trading biases going forward.

The pressure from the financial regulatory authorities regarding the use of privacy featured digital coins for nefarious purposes has been a major hindrance in the adoption of this technology, but it is one of the core principles on which the whole concept of Cryptocurrencies exists & it should be treated as such.

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Originally published at www.datadriveninvestor.com on August 24, 2018.