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Author: David Christopher, Source: Bankless, Compiler: Shaw Bitcoin Vision
Privacy technology is being driven by a speculative boom.
The price of Zcash’s ZEC token has increased tenfold since the end of September, cryptocurrency social media is abuzz with discussions about the resurgence of the privacy coin concept, and last week, the Winklevoss brothers launched their Zcash digital asset treasury reserve with the goal of amassing at least 5% of the token’s total supply.
While there is certainly some frenzy at the moment, don’t blame recent price increases entirely on a speculative frenzy.All this attention is prompting users to start taking advantage of the network’s features—Zcash’s privacy-preserving shielded pool currently holds nearly 29% of the circulating supply, up from 8.7% a year ago.
When buyers see a token that has both clear utility value and potential for profitability, they tend to become staunch supporters—a large number of such supporters may be needed if privacy technology is to thrive in the face of continued challenges from governments.
Reasons for ZEC price surge
Zcash was created in 2016 through a direct fork of Bitcoin to address the privacy vulnerabilities of digital gold.Like the Bitcoin protocol, Zcash uses a proof-of-work (POW) consensus mechanism, has a supply cap of 21 million coins, and follows a halving mechanism that occurs approximately every four years.
Each ZEC can be in transparent or shielded state:
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Transparent transactionsWorks similarly to Bitcoin, with addresses and amounts visible on the chain.
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Block transactionsUse zero-knowledge proofs to hide the sender, receiver, and amount while still allowing validators to confirm the validity of the transaction.
Users can switch freely between these states.
As many have pointed out, there are many factors driving Zcash’s rise.The technology has indeed improved significantly, while privacy concerns within the cryptocurrency space and more broadly have also intensified.The parabolic trend in its price reflects these changes.
Its technology upgrades include:
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Near Intents: Zcash has integrated with Near Intents, allowing ZEC to be used as a kind of “circuit breaker” where users can convert “transparent blockchain” funds (ETH, SOL, etc.) to ZEC, block ZEC, and then bridge the exchange back to the original chain – breaking the link between addresses.
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Tachyon: A major performance upgrade to Solana-like Firedancer will be released next week, significantly improving network speed and scalability.
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Zashi wallet: Launched last year, Zashi simplifies complex processes that previously prevented ordinary users from conducting secure transactions.
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Protected Shield Supply Grows: As previously mentioned, the amount of ZEC in protected shielded pools has grown significantly over the past year, which has helped improve the overall privacy of the network while acting as something of a “deflationary” pressure on the token supply.
While all of this progress is underway, we’re also seeing a long-standing pressing need for privacy in crypto, reflected in an increase in on-chain behavior and general sentiment across the industry.Institutions are migrating on-chain and need privacy to conduct transactions and stay competitive, transforming privacy from an idea to a technical requirement.
With the overall cryptocurrency market trending toward weakness, it remains to be seen whether ZEC’s upward momentum can be sustained.However, given that privacy issues continue to cause heated discussions in the technology circle, ZEC is still a high-quality crypto asset worth paying attention to.
