Zcash

Overview

Zcash is a privacy-preserving cryptocurrency that pioneered the practical use of zero-knowledge proofs in a public blockchain. Launched on October 28, 2016 by the Electric Coin Company (ECC), founded by Zooko Wilcox-O’Hearn, it implements the academic Zerocash protocol on a fork of Bitcoin’s codebase. The result is digital cash that can be fully shielded — hiding sender, receiver, and amount — while still being verifiable by the network.

Like Bitcoin, Zcash uses Proof of Work and a fixed maximum supply of 21 million coins, with block rewards that halve roughly every four years. What distinguishes it is optional privacy: funds can sit in transparent addresses (public, like Bitcoin) or shielded addresses (private, protected by zk-SNARKs). Users can also share viewing keys to selectively disclose activity to an auditor or regulator, a middle path between full transparency and full opacity.

Through 2025–2026 Zcash drew renewed attention amid a broader interest in financial privacy and post-quantum concerns, and the share of supply held in shielded pools rose markedly. The protocol continues to evolve: recent network upgrades restructured its funding model, an emergency 2026 upgrade patched a shielded-proof vulnerability, and two larger efforts are in progress — Project Tachyon to scale shielded transactions, and Crosslink to add a Proof-of-Stake finality layer on top of Proof of Work.

How It Works

Beginner

Zcash is digital cash with optional privacy. It works much like Bitcoin — coins are mined, the supply is capped at 21 million, and transactions are recorded on a public chain — but Zcash adds a second mode. You can hold and send funds transparently, where everything is visible, or “shielded,” where the amount and the parties are hidden.

The hidden transactions still have to be valid: no spending coins you don’t have, no spending the same coin twice. Zcash proves this using zero-knowledge proofs — math that lets the network confirm a transaction follows the rules without seeing any of its private details.

Because privacy is optional, Zcash also lets you share a “viewing key” so a chosen party — an accountant, an exchange, a regulator — can see your shielded activity. Privacy by default, disclosure by choice.

Intermediate

Zcash supports two kinds of addresses: transparent (t-addresses), which behave like Bitcoin’s public ledger, and shielded (z-addresses), where transaction data is encrypted on-chain. A zk-SNARK (zero-knowledge succinct non-interactive argument of knowledge) accompanies each shielded transaction, proving it is valid — inputs cover outputs, the spender owns the notes, no double-spend — without revealing values or addresses.

The shielded system has evolved through several “pools.” Sprout was the original; Sapling (2018) made shielded transactions far more efficient and practical on mobile devices; Orchard (activated with NU5 in 2022) introduced the Halo 2 proving system, which removed the need for a trusted setup ceremony, and added Unified Addresses that bundle address types together.

Sybil resistance and issuance come from Proof of Work (the Equihash algorithm). New ZEC enters circulation through mining, on the same disinflationary halving schedule as Bitcoin. A portion of the block reward has historically funded development through the Founders’ Reward and later the Dev Fund.

Builder

Consensus: Equihash Proof of Work; target block time ~75 seconds. Issuance follows Bitcoin-style halvings (most recently November 18, 2024, cutting the reward to 1.5625 ZEC); maximum supply 21 million.

Shielded cryptography: Sprout (original, Groth16-era circuits), Sapling (Groth16 with a trusted setup, efficient note encryption), and Orchard (Halo 2 — no trusted setup, built on the Pallas/Vesta “Pasta” curves). Shielded transfers use note commitments stored in incremental Merkle trees and nullifiers to prevent double-spends; values and recipients are encrypted. Unified Addresses abstract over pools, and viewing keys enable selective disclosure.

Recent upgrades: NU5 (May 2022, Halo 2 + Orchard), NU6 (November 2024, which redirected part of issuance into a development “lockbox”), NU6.1 (November 2025, a coinholder-governed funding model), and NU6.2 (activated June 3, 2026, an emergency fix for a critical vulnerability in the Orchard proof circuit).

In development: NU7 (targeted for late 2026; first testnet live May 2026) bundles Project Tachyon — proof-carrying wallets, oblivious synchronization, and transaction aggregation aimed at thousands of shielded transactions per second — with Zcash Shielded Assets (user-issued private tokens) and a network sustainability fee mechanism. Separately, Crosslink (Shielded Labs) proposes a Proof-of-Stake BFT finality layer atop the existing Proof-of-Work chain, with staked ZEC finalizing blocks and a roughly even issuance split between miners and stakers.

Clients: the original zcashd (C++, ECC) is being deprecated in favor of Zebra / zebrad (Rust, Zcash Foundation), with Zallet as the replacement wallet backend.

Consensus Mechanism

Zcash secures its ledger with Proof of Work using the Equihash algorithm. Miners compete to produce blocks, earning newly issued ZEC plus fees, and the longest valid chain wins — the same security model as Bitcoin, applied to a chain that also carries encrypted, zero-knowledge-verified transactions.

Key parameters:

Algorithm: Equihash (Proof of Work)
Block time: ~75 seconds
Block reward: 1.5625 ZEC (after the November 2024 halving)
Next halving: ~2028
Maximum supply: 21,000,000 ZEC
Funding: a share of issuance funds development (Founders’ Reward through 2020, then the Dev Fund; restructured by NU6 and NU6.1 into grants plus a coinholder-governed lockbox)

Proposed finality layer: Crosslink (Shielded Labs) would layer a Proof-of-Stake, Byzantine Fault Tolerant finality gadget on top of Proof of Work — validators stake ZEC to finalize blocks, improving settlement guarantees for exchanges and bridges. As of mid-2026 it is in development and testing, not yet live.

Read the full concept: Proof of Work →

Use Cases

Private payments — Shielded transactions conceal amount, sender, and receiver while remaining verifiable, the network’s core use case.
Selective disclosure — Viewing keys let a holder reveal shielded activity to an auditor, accountant, or regulator without making it public — privacy compatible with compliance.
Store of value with optional privacy — A fixed 21-million supply and Bitcoin-style issuance, with the option to hold and move funds privately.
Censorship-resistant transfer — Permissionless value movement that resists surveillance and selective blocking.
Cross-chain privacy — Integrations such as Zashi’s NEAR Intents support let users swap and off-ramp shielded ZEC, extending privacy beyond the Zcash chain.

Ecosystem

Wallets

Zashi — ECC’s shielded-first mobile wallet, with integrated swaps and off-ramps via NEAR Intents
Ywallet — Multi-pool wallet with fast shielded sync
Nighthawk / Zecwallet — Community wallets focused on shielded use

Clients & Protocol

Zebra (zebrad) — Independent Rust node from the Zcash Foundation; the path forward as zcashd is deprecated
zcashd — Original C++ node from ECC, being phased out
Zallet — New wallet backend replacing the zcashd wallet

Organizations

Electric Coin Company (ECC) — Created Zcash; protocol R&D and the Zashi wallet
Zcash Foundation — Public-good stewardship and the Zebra client
Shielded Labs — Developing the Crosslink Proof-of-Stake finality layer
Zcash Community Grants (ZCG) — Community-directed ecosystem funding

History & Timeline

2014 — The Zerocash protocol is published by academic researchers (Ben-Sasson, Chiesa, et al.)
2016 — Zcash mainnet launches (October 28) following a multi-party trusted-setup ceremony
2018 — Sapling upgrade dramatically improves shielded-transaction efficiency
2020 — Canopy upgrade; first halving; the Founders’ Reward ends and the Dev Fund begins
2022 — NU5 activates Halo 2 and the Orchard pool (no trusted setup) plus Unified Addresses (May)
2024 — Second halving (November 18); NU6 redirects part of issuance into a development lockbox
2025 — NU6.1 introduces a coinholder-governed funding model; shielded-pool share of supply rises sharply amid a major ZEC rally; zcashd deprecation begins
2026 — NU6.2 emergency upgrade patches an Orchard proof-circuit vulnerability (June); NU7 reaches testnet (Project Tachyon, Shielded Assets); Crosslink Proof-of-Stake work advances; ~30% of supply held in shielded pools

Comparison

	Zcash	Bitcoin	Monero
Consensus	PoW (Equihash)	PoW (SHA-256)	PoW (RandomX)
Privacy	Optional (shielded)	Pseudonymous	Private by default
Privacy tech	zk-SNARKs (Halo 2 / Orchard)	None	Ring signatures + RingCT + stealth
Supply cap	21M	21M	Uncapped (tail emission)
Block time	~75 sec	~10 min	~2 min
Auditability	Selective (viewing keys)	Fully public	Opaque
Smart contracts	None (Bitcoin-style Script)	Limited (Script)	None
Primary use	Private digital cash	Store of value	Private transactions

Bitcoin — Zcash forked Bitcoin’s codebase and shares its Proof of Work, 21-million cap, and halving schedule, adding zero-knowledge privacy on top.
Monero — The other major privacy coin. Monero is private by default using ring signatures and stealth addresses, where Zcash makes strong zk-SNARK privacy optional and auditable.
Ethereum — Not a privacy chain, but the place zero-knowledge proofs now scale most visibly: ZK rollups use the same cryptographic family Zcash pioneered for payments.

Learning Resources

Ben-Sasson, E., Chiesa, A., et al. “Zerocash: Decentralized Anonymous Payments from Bitcoin” (2014)
Zcash Protocol Specification — zips.z.cash/protocol/protocol.pdf
Electric Coin Company documentation — z.cash
Concept pages: Proof of Work · Blockchain Privacy and Zero-Knowledge Proofs · Public-Key Cryptography and Digital Signatures

Sources & Citations

Ben-Sasson, E., et al. (2014). “Zerocash: Decentralized Anonymous Payments from Bitcoin.”
Zcash Protocol Specification — zips.z.cash
Electric Coin Company — protocol, Orchard/Halo 2, and Zashi — electriccoin.co
Zcash Foundation — Zebra client and governance — zfnd.org
Shielded Labs — Crosslink Proof-of-Stake proposal — shieldedlabs.net
Network upgrades (NU5, NU6, NU6.1, NU6.2, NU7) — zips.z.cash
Network statistics — blockchair.com/zcash

Freshness note: Market cap rank, circulating supply, shielded-pool share, and the status of NU7, Project Tachyon, and Crosslink change over time and should be verified quarterly. Crosslink and NU7 were in development — not yet on mainnet — as of June 2026.

Last updated: June 13, 2026