ZCash, the anonymous cryptocurrency that’s secured by zero knowledge proofs, has recently entered beta stage as it approached its release date. The launch was set for September 26, but it was pushed back for a month until the 28th of October. The delay comes as the result of a heightened security that led the team to hire three separate auditing firms to review all the changes made to the Bitcoin codebase.
Since Zcash is open source, users can run the testnet themselves by following the beta testnet guide and they can also start mining testnet coins (TAZ) by following this guide. Testnet coins have no value, and real Zcash mining will start with a slow mining reward to avoid problems associated with “instamines”, where blocks could become too fast due to the abundance of miners. It is also important to note that during the four years of mining, 20% of the block reward will be allocated to the “Founder reward” and will be distributed to members of the Zcash team and early investors. The founders reward fund will amount to 10% of the total Zcash supply, 21 million.
Furthermore, Zcash mining will only be available for CPUs, although a crowdfunding campaign to fund the development of a GPU miner is currently taking place. ZCash will use Equihash, a memory hard algorithm that will make GPU miner development harder, and the creation of ASIC hardware unfeasible. Some suggest that CPU mining only may be a problem as it becomes the perfect cryptocurrency for botnet mining: It can be mined in any computer and there is no way to trace the destination of the mined coins.
A futures market has also recently launched for Zcash, and according to it the current price is $40 per ZEC coin, a highly inflated price. Actual exchanges will have to wait for a fair amount of ZEC to be mined in order to provide liquidity for users that want to buy the new cryptocurrency.
“Privacy is a very important challenge with current blockchain technology, but existing solutions like private blockchains do not really solve the problem. The technology behind Zcash does.” Bo Shen, General Partner at Fenbushi Capital
Zcash is probably the most awaited cryptocurrency to be announced since Ethereum, except for the DAO which was built on Etherem and doesn’t really count as a cryptocurrency. This explains the precautions that are being taken with the slow mining start and the extra auditing period. Due to Zcash’s underlying technology, a double spend attack would be very hard to identify and could jeopardize the future of the cryptocurrency. If there is something that the DAO has taught us is that security should always come first.
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