# ZCash: What It Is, Why It Was Created, How to Mine It

## What Is ZCash (ZEC)?

ZCash is a blockchain and cryptocurrency that emerged in 2016 when a group of scientists decided they wanted to create a cryptocurrency similar to Bitcoin but with some additional features. They developed a fork of the Bitcoin blockchain with enhanced user security and anonymity. The scientists first invented Zerocoin, which became Zerocash not too long after its initial release. Eventually, the cryptocurrency was renamed ZCash.

### Key Takeaways

*   ZCash is a Bitcoin fork with a different hashing algorithm and security protocols.
*   ZCash started as Zerocash; it was later improved upon by the Electric Coin Company and rebranded ZCash.
*   ZCash verifies ownership of coins and transactions more anonymously than Bitcoin, thus providing more security for users.
*   Zcoin can be mined on devices and computers, but the currency is best mined on dedicated systems called application-specific integrated circuits.

## History of ZCash (ZEC)

ZCash is forked from the original Bitcoin codebase. In 2014, Eli Ben-Sasson, Alessandro Chiesa, Christina Garman, Matthew Green, Ian Miers, Eran Tromer, and Madars Virza believed there were security flaws in the way transactions were tracked through Bitcoin's blockchain. In their whitepaper outlining their ideas, they called their cryptocurrency Zerocash.

The scientists created Zerocoin (Electric Coin Company) in 2015. In 2016, the name Zcash was changed to Zcash by the Electric Coin Company.

ZCash uses the [zk-SNARK](https://www.investopedia.com/terms/z/zksnark.asp) security protocol to ensure the parties involved in a transaction are verified without revealing any information to each other or the network.

> **Fast Fact**
>
> ZCash is an altcoin, a category of cryptocurrency labeled by the crypto community to refer to any cryptocurrency that is not Bitcoin. Many altcoins are different in their purpose and intended uses.

Zk-Snark allows for fully shielded transactions in which the sender, recipient, and amount are encrypted. This feature is a large deviation from other cryptocurrencies, where transaction transparency is an underlying concept aside from securing user information.

In 2019, Electric Coin Company (ECC) passed the trademark and license for ZCash to the Zcash Foundation in a bilateral usage agreement. In April 2024, ECC announced its intent to terminate the agreement and pass all governance decisions to the Foundation, effectively removing itself from the project.

## How Is ZCash Different From Bitcoin?

The Bitcoin community prides itself on transparent transactions while maintaining anonymity. However, anyone interested or who has a stake in a transaction could trace the parties within it.

ZCash doesn't eliminate transaction information. Instead, it encrypts it so that it cannot be tracked. The ZCash blockchain is still transparent, but the security protocol zk-SNARK adds additional user security and anonymity.

Bitcoin uses the hashing algorithm SHA-256. ZCash uses Equihash, which is incompatible with hardware and software designed for Bitcoin mining. It also has larger blocks and increased hashing times, which increases the network's hash rate. A cryptocurrency's hash rate is the processing power of the network of miners—it's a measure of how fast the transactions can be verified and validated to open a new block.

> **Tip**
>
> Joining a mining pool is one of the best ways to benefit from ZCash mining. Efficiency and opportunities to earn are increased when resources are pooled together.

## Goals of ZCash

ZCash was designed to be efficient, safe, and anonymous. The developers behind ZCash also promoted complying with regulatory requirements. Additionally, full transparency is an option when using ZCash. If this option is chosen, its transparency is similar to Bitcoin's when transfers are conducted.

## How to Mine ZCash

New coins are produced by mining. You can use your computer and supported operating systems like Docker, Debian/Ubuntu, Mac, and other Linux flavors. However, ZCash recommends using an [application-specific integrated circuit (ASIC)](https://www.investopedia.com/terms/a/asic.asp) miner and mining pool because the network difficulty has gotten so high that PC mining is no longer profitable.

ZCash uses proof-of-work and requires miners to compete against each other to produce a new block by racing to solve a cryptographic problem. The first miner to find the solution opens a new block and receives the [block reward](https://www.investopedia.com/terms/b/block-reward.asp).

## Who Founded ZCash?

ZCash was founded by a group of scientists and Zooko Wilcox O'Hearn, a computer security specialist who created the Electric Coin Company.

## Is There a Future for ZCash?

ZCash has been turned over to the Zcash Foundation, which will continue development. Regarding its future, it's difficult to say whether ZCash has any staying power.

## What Is the Disadvantage of ZCash?

One of the most significant hurdles ZCash faces is that it is another cryptocurrency/payment system in an ocean full of them. It offers users more anonymity than other cryptocurrencies, but due to the regulatory environment and investigations into anti-money laundering techniques using crypto anonymizing services, that means there is more scrutiny for users.

## The Bottom Line

ZCash is a cryptocurrency that was developed from a fork of Bitcoin to enhance the anonymity of its users. It is still an actively traded cryptocurrency on many exchanges, but its user base has dropped somewhat since 2018.  

_The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our [warranty and liability disclaimer](https://www.google.com/url?q=https://www.investopedia.com/legal-4768893%23toc-warranty-and-liability-disclaimer&sa=D&source=editors&ust=1717945104342265&usg=AOvVaw0WkQ-G-tTQCFwQbfjyMP2L) for more info._

> **Article Sources**
>
> 1.  ZCash. "[Zcash Documentation: Zcash Basics](https://zcash.readthedocs.io/en/latest/rtd_pages/basics.html)."
>     
> 2.  ZCash. "[Zerocash: Decentralized Anonymous Payments From Bitcoin (Extended Version) Whitepaper](http://zerocash-project.org/media/pdf/zerocash-extended-20140518.pdf)."
>     
> 3.  ElectricCoinCompany. "[ECC: Ending the Zcash Trademark Agreement Will Increase Decentralization and Resilience](https://electriccoin.co/blog/ecc-ending-the-zcash-trademark-agreement-will-increase-decentralization-and-resilience/)."
>     
> 4.  ZCash. "[Frequently Asked Questions](https://z.cash/support/faq/)."
>     
> 5.  CoinMarketCap. "[SHA-256](https://coinmarketcap.com/alexandria/glossary/sha-256)."
>     
> 6.  ZCash. "[Frequently Asked Questions](https://www.zcashcommunity.com/mining/)."
>     
> 7.  Coingecko. "[ZCash](https://www.coingecko.com/en/coins/zcash)."