Zcash Digital Asset Report: Introduction
Zcash’s genesis block was mined in October 2016, since then the cryptocurrency has aimed to provide enhanced privacy and security to its users. Zcash uses advanced cryptography, so-called zk-SNARKS or Zero-knowledge proofs, to shield transactions. It enables one party to prove to another that something is true, without revealing any information, apart from the fact that this specific statement is true.
Zcash was able to capitalize on the privacy issues of Bitcoin and forked its codebase. There are two types of transactions on its blockchain: shielded (using zk-SNARKS) and unshielded (just like on the original Bitcoin blockchain), making privacy an option for its users.
Due to optional privacy, Zcash faces stiff competition from both types of payment coins: private and non-private. In fact, only 12% of the total Zcash transactions are private.
Still, in the privacy coin sector, there are players like Monero which have privacy by default and have greater adoption levels amongst its users.
So while Zcash is considered a privacy coin it needs to find its niche in that sector. Otherwise, with no apparent use cases, it will lose out to either a more advanced and private altcoin rival or to Bitcoin, which has a larger user base.