Don’t Get Confused – Here’s How To Choose
Zcash and Monero are two popular cryptocurrencies in the world of anonymous coins. Although they’re both privacy-focused cryptos (meaning that transactions are private), there is a difference in how this happens between ZCash and Monero. Find out more below!
When the Bitcoin blockchain was just launched, many articles appeared about how anonymous and private Bitcoin was as a cryptocurrency. It was even preferred by those who used dark web marketplaces like Silk Road for transaction purposes.
Silk Road was the first of many services that allowed users to buy illegal goods and services online. It was therefore important for the digital currency used to be private and untraceable.
Unfortunately, Bitcoin isn’t perfect in this regard. If users don’t use additional privacy measures, it’s possible to uncover people’s identities who are making transactions using Bitcoin. Because Bitcoin has a traceable history, it is not as private or untraceable as we would like.
With the public nature of Bitcoin blockchain transactions, it is possible to uncover identities. However, with some understanding and research into how these transactions work in detail, users can remain anonymous when using cryptocurrency like bitcoin by taking additional measures such as mixing coins or swapping coins.
To combat the difficulties that users face when trying to send anonymous transactions, Zcash and Monero were created. These cryptocurrencies are more private than Bitcoin. However, anonymous transactions required too many complicated steps, so different cryptocurrencies were developed that are more private and easier to use for the average user.
In this article, we will explore the differences and similarities between Zcash vs Monero. We’ll determine which coin is more private and discuss who each one would be a better investment for!
What is Monero (XMR)?
Monero is a decentralized cryptocurrency created by a team of developers to solve the privacy issues faced in other cryptocurrencies. It runs on an obscure blockchain. It conceals transaction information and the amount sent by concealing the transaction participants’ addresses.
What is Zcash (ZEC)?
With the increasing demand for privacy in transactions, ZCash has emerged as a cryptocurrency focused on transaction confidentiality. Their team aimed to solve Bitcoin’s numerous issues with transaction anonymity.
ZCash is built on the Bitcoin network and shares many characteristics with the primary coin.
The main differences between ZCash and other cryptocurrencies like Bitcoin are how they handle anonymity for their users and the fungibility of each coin.
Monero is the king of privacy. While Zcash might have some anonymous transactions, it’s not guaranteed, and there are more risks involved with using it. Monero ensures that all users remain completely private by default making their transactions 100% anonymous. In contrast, on Zcash, you must opt-in to your anonymity which isn’t always enforced for every individual transaction!
Zcash (ZEC) is an alternative cryptocurrency that allows users to send normal or shielded transactions (private transactions). With Zcash, recent statistics indicate that only 6% of transactions are fully shielded and 15% partially shielded.
Because this is such a small percentage of all transactions on ZEC’s network, using its shield feature becomes highly noticeable to others that might be monitoring it. Unfortunately, this creates a unique problem: because few people use this feature, sending a shielded transaction immediately draws attention.
When someone looks at your transaction history, the first question they will ask is, why did you choose to send this private? What were you hiding from others? This is a fundamental issue with optional private transactions because they are not common.
If there is a larger anonymity set, it’s more challenging to determine who the recipient of private transactions is. Monero is more private than most cryptocurrencies because it’s harder to tell who the recipient of a transaction is.
Monero has a larger anonymity set, making transactions less visible and giving users greater privacy. Thus, Monero has greater privacy than other cryptocurrencies like Zcash that may not be as anonymous because of their smaller anonymity sets.
However, Monero stands out by the fact that people are using it. Those who wish to remain anonymous with their money will appreciate Monero’s privacy over Bitcoin.
However, if law enforcement takes an interest in your funds, they’ll probably want you to explain why you feel the need to use a cryptocurrency like Monero instead of something public-facing and transparent like Bitcoin.
Although cryptocurrencies like Bitcoin are popular in the news, not many people have heard of them or know much about how they work.
Zcash makes use of zk-SNARK zero-knowledge proof technology, which assures that when nodes in the network execute transactions, they may be verified without disclosing any sensitive information.
While the Monero network is dedicated to private transactions only, the Zcash network offers users the option of transparent or shielded transactions.
Monero relies on three major technologies to make transactions more private: ring signatures, stealth addresses, and ring CT.
Monero is a cryptocurrency that uses ring signatures to provide greater privacy. This means transactions are private and difficult for anyone outside of the group to figure out which addresses were involved in any transaction, making Monero more anonymous than other cryptocurrencies like Bitcoin. It is impossible to track transactions with Ring Signatures in Monero.
In essence, a ring signature is a sort of digital signature that combines the signatures of numerous signers and thereby may authorize a particular transaction. The purpose of this technique is to conceal the true signer among the non-signers who comprise the signature so that any of them has an equal probability of being the true sender of the transaction from the perspective of an outside observer.
Stealth addresses conceal the recipient’s identity and are generated randomly for each transaction. They are intended for one-time use only.
When a transaction is registered on the blockchain, Ring Confidential Transactions, or RingCT, is utilized to conceal the transaction’s value.
Additionally, the platform makes use of an innovative Proof-of-Work consensus algorithm known as RandomX.
Through the smart use of cryptographic signatures, ring signatures enable Monero users to conceal the origin of their transactions – a feature dubbed Monero untraceability.
Bitcoin’s greatest flaw is that all transaction information, including the exact sum being sent from one party to another and the parties’ identities, are not hidden because Bitcoin wallets have a unique address. As a result, someone can easily track a person’s transactions by looking up their addresses on the blockchain ledger.
Mining profitability is difficult to define. It’s hard to pin down the correct answer because it depends on several factors, including current hardware costs for mining devices and market prices of each coin itself, and network hashrate at that moment in time.
A mining calculator is the best way to determine profitability when comparing different cryptocurrencies. However, the factors that affect cryptocurrency mining are often unique compared with other industries, so there isn’t a one-size-fits all solution in terms of which coins you should mine or how profitable they will be for you.
Mining calculators are designed based on the current factors affecting profitability and calculate how much you can earn accordingly.
To mine for Zcash and Monero, there are a few important things you should know. Firstly, both coins have been designed to be ASIC-resistant in mind, so typically, miners will be using either CPU or GPU hardware rather than an expensive ASIC mining device.
In-Browser Mining & Crypto-Jacking
Monero has found adoption in a different way from other cryptocurrencies. While many use their CPUs or GPUs to mine for Monero, it is also possible to run mining software through the browser of users without them having any idea what they’re doing.
In-browser mining can be profitable if you have thousands of people processing transactions on your behalf and using up electricity without knowing that’s what they’re supporting! This process is known as crypto-jacking.
Some publishers are not very transparent with the fact that they’re making users mine cryptocurrency for them. Some download websites have hidden Monero mining software as part of a file being downloaded onto someone’s computer without their permission.
When we compare Zcash vs Monero, there are many reasons why a user chooses Monero. Its anonymous properties make it preferable for crypto-jacking, and the fact that it can be mined using CPUs/GPUs makes this even more attractive to hackers.
These privacy-focused crypto projects differ in their adoption levels. For example, Monero has found more use on the dark web than Zcash due to its ease of usability and increased anonymity. Since Monero is untraceable, it is highly sought-after by those seeking anonymity online.
Monero has been used by hackers, rogue states who want to get around sanctions, and people wanting a secure way of sending money. Groups of hackers have also used this blockchain technology in their operations due to its anonymity feature. Its ease in being mined on regular computer systems is what makes it even more interesting for all the uses mentioned above.
Researchers from Carnegie Mellon University concluded that 99.9% of Zcash and 30% Monero (XMR) transactions were not entirely anonymous as has been touted by many users, potentially allowing buyers and sellers to be identified in many cases with just a few bits of additional information – or even no extra info at all.
In other words, the researchers claimed that the transactions of both coins are traceable.
Supply & Funding Models
Monero, a rising star in the cryptocurrency world that is often compared to Zcash for its privacy features and growing adoption, relies almost exclusively on volunteer developers as well as donations from individuals who have an interest in seeing Monero succeed.
Zcash has a different strategy that allows it to fund its development budget. The Zcash mining model only allocates 80% of mined coins for the miners, while most other cryptocurrencies give 100%.
Of that 20%, 15% is given towards founders and early investors. The final 5%, however, goes toward funding developers who are improving the Zcash blockchain itself.
Despite being controversial, it’s clear that giving 15% of the block reward to founders has turned some people away from Zcash.
Where to Store Zcash and Monero
To better understand the best option to store XMR and ZEC, it’s essential to consider how you plan on using them. For example, if you want a wallet for trading purposes, a hot wallet might be preferable.
However, if safety is your primary concern, then a hardware wallet would likely keep things most secure.
When picking a wallet, make sure you look at the following features:
- It should be developed by an established company with extensive experience in the field.
- It needs to have high security; that means 2-factor authentication is mandatory, as well as backups options.
- A wallet that permits you to retain your private keys and a seed phrase are preferable for storage purposes.
- The wallet’s price must be reasonable.
Where to Buy Zcash and Monero
Cryptocurrencies like ZCash and Monero can be bought on most exchanges, but you might consider custodial services that will keep the coins within your selected platform’s wallet or instant exchange solutions.
If using instant exchange services, you’ll receive swapped coins from an instant exchange service as long as they’re kept in a wallet where you have access to private keys.
Which is better, Monero or Zcash?
Monero and ZCash are two privacy-focused cryptocurrencies that have different approaches to privacy. The difference between them is how they approach private transactions, with Monero being the most popular of the two due to its default level of anonymity.
While both coins have pros and cons, there is still a lot of growth potential for each digital currency in this space.
All things considered, which cryptocurrency do you feel has more value? Share your thoughts below!