The Ultimate Zcash Frequently Asked Questions List for 2020

  1. What is Zcash? What does 'Zcash' mean?

  2. Zcash is loosely based on the design ideas of Bitcoin, the world's first decentralized cryptocurrency. Cryptocurrency is a medium of exchange backed by cryptography. A decentralized cryptocurrency keeps track of all transactions by all addresses on a peer-to-peer shared record. The main innovation of Bitcoin is the Blockchain, which breaks up the record of transactions into blocks, each one crypographically connected to the previous. Zcash adds shielded addresses and zero-knowledge proofs for even more privacy. Zcash is traded on bitni.com.

  3. How does Zcash work?

  4. Blockchain based cryptocurrencies like Zcash work by grouping transactions together in data blocks, then linking the blocks cryptographically. The chain of blocks is stored across decentralized nodes, and distributed as peer-to-peer shared files. Quantities of Zcash are stored at addresses, cryptographic sequences paired with a private key used to spend the amount at the address. Addresses in Zcash can be hidden and invisible in a transaction. The user's wallet keeps track of all their Zcash addresses and adds up the balance.

  5. Who invented Zcash? How was Zcash created? Who is behind Zcash?

  6. Zcash was created by Zooko Wilcox-O'Hearn as an attempt to technically improve Bitcoin, by increasing the generation of new blocks to once every 75 seconds instead of 10 minutes, and using Equihash as the hash function. The first tweak makes transaction times faster. The second makes mining on consumer hardware easier. Zcash is maintained by Electric Coin Company. The inventor(s) of Bitcoin are unknown.

  7. What is Zcash used for?

  8. Zcash is used for anything money is used for - buying, selling, donations. But Zcash can also be used for even more things than fiat currency: A means of accepting donations or facilitating commerce that cannot be shut down by governments or the banking system. Also storing up wealth that cannot be confiscated.

  9. Why does Zcash have value?

  10. Zcash has more value than Fiat Currency because it's more useful: It's anonymous, decentralized, irreversible, cannot be devalued, cannot be confiscated, can be sent over the internet to anywhere in the world in minutes. Things that are very useful and scarce tend to be valuable. One reason Zcash has value because it fulfills all of the requirements of money: Store of Value, Medium of Exchange, Unit of Account.

  11. How many Zcash coins are there? What is the Zcash maximum supply?

  12. The maximum supply of Zcash is limited to 21 million. The reason is halving - the reward for mining is reduced by half every 4 years. 210,000 transaction blocks are processed every 4 year halving cycle. The first block reward to miners was 50 coins per block, after halving they were 25, then 4 years after that 12.5, and the series keeps reducing by half. All the block rewards that will ever be add up to 100, so 210K times that is 21 million.

  13. What is a Zcash transaction? How do Zcash transactions work?

  14. A Zcash transaction is a transfer of value from one address to another. The transaction spends the outputs of previous transactions as it's input. The entire value of an output is spent, so any remainder may be sent back to the sending address - this is called the "change". A transaction is created by a user on their Zcash client software, then broadcast out to all the other nodes and becomes part of the Blockchain.

  15. Are Zcash transactions anonymous? Can Zcash be traced?

  16. The blockchain is a public record of all transactions by all addresses. Zcash is specifically designed to be extremely difficult to link the history of transactions. An address is just a number - it doesn't reveal anything about the identity of the one using it, like a street address can. As long as this number is never linked to an human identity, the Zcash user is safe. There is no way to "trace" a Zcash address to the person using it - unless they leave clues connecting their Zcash address to their physical identity. bitni.com has maximum anonymity - we don't ask for personal details.

  17. What is Zcash mining? How is Zcash mined? How does Zcash mining work?

  18. Zcash mining is the computational process of adding new blocks to the blockchain. New transactions are grouped together in a block. New blocks must cryptographically connect to previous blocks with a proof-of-work hash function. Mining hardware is designed to the hashing function as quickly as possible. Miners are paid a small transaction fee for including new transactions in blocks. Mining also creates new Zcash coins, which go to the miners - except in the case of Zcash, some coins go to Electric Coin Company.

  19. Can Zcash be taxed? Are Zcash gains taxable? Are Zcash transactions taxable?

  20. Zcash was not designed to be taxed. If no one reports their Zcash gains, there is no way an authoritarian regime can know who gained what. However, centralized exchanges with accounts and IDs do report their user's Zcash balance to tax authorities. If you want privacy from authoritarian regimes, you need an accountless exchange that doesn't ask for your ID - bitni.com is the best exchange in this regard.

  21. How does a Zcash ATM work? Are Zcash ATMs safe? Are Zcash ATMs anonymous?

  22. Zcash ATMs allow a customer to buy Zcash by inserting physical cash, like a vending machine, or send Zcash to receive physical cash. (The former are called "1 way" ATMs and the latter are called "2 way".) If the Zcash ATM is from a trusted manufacturer and operator, it should be safe to use. Different Zcash ATMs have differing AML/KYC requirements.

  23. Can Zcash scale?

  24. Zcash has scaled to handle millions of transactions per month. Zcash is software, and it can evolve to scale - the code can be modified with better algorithms and the network then upgrades to the more advanced version. Zcash was modified from Bitcoin as an attempt to help to solve scaling issues, by creating a new block every 2.5 minutes instead of 10, which allows transactions to be processed faster.

  25. Can Zcash be stolen?

  26. Anyone who knows the private key can move the coins from an address. If the private key is not known, it's not possible to spend the coins at an address. Zcash stored in the wallets of a centralized exchange can be stolen - it happens all the time. At a Non-custodial exchange like bitni.com, you are in charge of your wallet at all times.

  27. Can Zcash be hacked?

  28. If the Zcash network could be hacked, it would have already happened. The blockchain is decentralized across thousands of independent nodes - the more nodes on the network, the higher the security. If any one node is compromised, it will not compromise the others. However, centralized Zcash exchanges are hacked all the time! That's why you need a non-custodial exchange like bitni.com.

  29. Where is Zcash stored? Where to store Zcash?

  30. The data of all Zcash transactions is stored in a public ledger (blockchain) distributed as peer-to-peer shared files. Each node has a complete copy of all transactions ever made - the blockchain. So the blockchain is stored in the cloud - not on a centralized server, but on thousands of independent nodes. Each user's Zcash balance is also kept track of in their wallet.

  31. What is a Zcash wallet? How do Zcash wallets work?

  32. A Zcash wallet stores all of the user's Zcash addresses. The sum value of all of the addresses in a wallet is automatically added up - this is the total balance of a wallet. Centralized exchanges store the user's wallet, which is risky. Non-custodial exchanges like bitni.com do NOT store user's wallets, which is much safer.

  33. Who uses Zcash? Where is Zcash used?

  34. Millions of people everywhere in the world use Zcash for all the same things as any other money is used for - buying, selling, and donations - and the number of users is growing rapidly. Anyone needing to transfer wealth internationally, especially outside the grasp of authoritarian regimes, for ridiculously low cost, will find Zcash useful if they are not already using it. Zcash is also used as an investment and a hedge against inflation.

  35. Who accepts Zcash? Where is Zcash accepted?

  36. Many merchants, especially online, accept cryptocurrencies as payment. Charities like Wikipedia accept donations in crypto. Web Hosts and Domain registrars often accept crypto. Large brick and mortar stores are starting to accept crypto payment. Some local restaurants are also coming on board. bitni.com accepts Zcash to convert to other currencies, of course.

  37. Why is Zcash the future?

  38. The reason why a cryptocurrency is the future can be summed up in 3 words: Because it's better. Zcash is a huge improvement over fiat currency. It is also an improvement over precious metals - they can't be wired over the internet. If central banks continue destroying the value of fiat currencies, cryptocurrencies will become even more important to the future of money.

  39. Can Zcash crash? Will Zcash crash?

  40. If Zcash were going to crash to zero, it would have probably done it already. There have been wild price swings - because it's new and there's a lot of speculation, like the internet when it first came out. But there are wild price swings with other commodities like oil. Zcash's low after it's (post launch) all-time high of several hundred dollars is still several scores of dollars. For Zcash to crash to $0, demand would need to be zero or supply would need to be infinite - a highly unlikely scenerio.

  41. Is Zcash a good investment?

  42. The Original Bitcoin has gone from pennies to thousands and thousands of dollars in less than a decade, utterly blown away the stock market, even gold and other precious metals, and far outperformed pretty much any other investment. While Zcash has not reached Bitcoin's high, it has performed relatively well. (Excluding it's early days of trading when the scarcity of coins caused them to be overpriced.)

  43. Where to buy Zcash? How to get Zcash?

  44. Exchanges are where Zcash is bought and sold, however there are several types: Centralized Exchanges store the user's coins like a bank and require ID. Decentralized Exchanges (DEX) facilitate peer-to-peer buying and selling between users - and these can be done locally in-person or online. Non-Custodial exchanges like bitni.com are a quick and easy way of swapping cryptocurrencies without signing up.

  45. Can I buy Zcash without ID? Is there a way to get Zcash without SSN?

  46. Many Centralized exchanges have rigorous requirements for identification, such as uploading a scan of passport or other government documents. Decentralized exchanges usually have less stringent requirements for identification, especially if the transaction is in-person. Non-custodial exchange bitni.com does not require identification for crypto-to-crypto swaps. If you want Zcash without SSN, you've come to the right place.

  47. Can I get Zcash without KYC? Is it possible to buy Zcash without verification?

  48. KYC stands for Know Your Customer. Many regimes have become increasingly authoritarian towards cryptocurrency and seek to crack down on anonymous trading, by requiring the customer to upload documents proving their identity. Many exchanges have caved in to the pressure and now have KYC policies. Centralized exchanges almost always have KYC, some Decentralized exchanges do as well. bitni.com does not require KYC for crypto-to-crypto swaps.

  49. Which cryptocurrency to buy? Should I buy Bitcoin or Zcash? Zcash vs Bitcoin?

  50. In many ways, Zcash is technically superior to Bitcoin. It has much faster transaction times. It is much harder to link/trace transactions. However, Zcash doesn't have the massive publicity that Bitcoin has (not all of Bitcoin's publicity is good, but apparently there's no such thing as bad publicity). And that's why Bitcoin is priced much higher. Many more people know about Bitcoin than Zcash.

  51. Is Zcash publicly traded?

  52. Most Zcash trading is done by buying and selling coins directly by individual investors. However, there are cryptocurrency funds listed on stock markets. A Cryptocurrency Exchange Traded Fund (ETF) holds assets in single cryptocurrencies or a basket of them. It may be more convenient to buy into one basket fund instead of manually managing dozens of different cryptos and their respective wallets. In the case of Zcash, it is probable some Cryptocurrency ETFs are holding it.

  53. Can Zcash reach 100? Can Zcash reach 1000? Can Zcash reach 10000?

  54. Hundreds, thousands, or even tens of thousands for a Zcash coin may seem speculative, but Zcash's high is already several hundred dollars. (Artificial scarcity caused the launch price of Zcash to be in the thousands, but here "all time high" is referring to post-launch behavior.) Zcash started out at practically nothing and rose in a parabolic curve to it's high twenty times higher than the post-launch starting price. 10000 is only twelve times higher than the post-launch all time high. If the long term trend continues, Zcash could reach new highs orders of magnitude greater.

  55. How long is a Zcash transaction time?

  56. A new block on the Zcash blockchain is added every 75 seconds. The number of transactions in each block is limited to several thousand. Transactions paying higher fees are given priority over those paying lower fees, which must sometimes wait to be included in future blocks instead of the current one. A Zcash transaction time can be as short as the generation of one block in 75 seconds. However, 24 levels of blocks is needed for irreversibility, thus the safe transaction time is 60 minutes.

  57. How many confirmations for a Zcash transaction?

  58. A Zcash transaction can be tentatively completed in as little as 1 confirmation in 75 seconds. However, the latest blocks in the blockchain are changeable until more blocks are added after them. For irreversibility, 24 levels of blocks and thus 24 confirmations are needed. The latest block in the process of being added to the blockchain is changeable. Not till several more blocks have been added after it is that part of the blockchain considered immutable.

  59. How much is an Zcash transaction fee? How much does a Zcash transaction cost?

  60. A Zcash transaction fee is the cost of having transaction data included in blocks added to the blockchain permanent record, which fluctuates under market supply and demand. The average fee to send Zcash is a fraction of a penny. Lots of factors affect transaction fees, such as the cost of electricity, the hardware capacity and competition between miners, the number of simultaneous transactions competing to be included in a block.

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