Zcash Soars 30% After Move to Proof-of-Stake Announcement

Privacy coin Zcash (ZEC) has seen a near 30 per cent rally after its parent organisation announced various upgrades to the protocol and its wallet to “engage directly with ZEC users [and] rapidly roll out new features”.

Electric Coin Company (EEC), the organisation behind Zcash, has released its new roadmap outlining various changes and upgrades to the protocol as well as a new wallet arriving sometime in 2022.

Originally based on Bitcoin’s codebase, Zcash’s supply is capped at 21 million coins with 13 million in circulation, with the market cap at around US$2.7 billion, according to CoinMarketCap. Shortly after releasing the roadmap, the price of ZEC rallied from US$147 to US$189, an increase of 28.6 percent, and at the time of writing was sitting at US$210.

Zcash Upgrades in the Pipeline

In the blog post, ECC stated that the first step of its roadmap would be the release of an official wallet, the code of which will be open-source. Developers intending to develop on the protocol can also expect the release of a software development kit in the near future. 

Past indications to move Zcash to Proof-of-Stake (PoS) have come to fruition, with the ECC announcing it will migrate the blockchain from an energy-intensive Proof-of-Work (PoW) consensus mechanism, whereby miners need to run software on a computer in order to validate transactions and those with the most computing power validate the most transactions. The ECC announcement suggests that users would be able to stake a portion of their ZEC holdings into a dedicated Zcash smart contract to become validators on its blockchain, according to the size of their stake.

This shift will also increase the utility for ZEC through capabilities that include yield generation through staking and a possible path to on-chain governance mechanisms for ZEC HODLers.

 Josh Swihart, senior vice-president of growth, ECC

The last part of ECC’s roadmap focuses on interoperability. As the company completes the transition to a proof-of-stake model, new opportunities for cross-chain interoperability will arise, such as possibly using the interoperability network Cosmos.

Privacy a Pillar of Web 3.0

In this new internet, each individual is self-sovereign. There are no centralised gatekeepers to decide who can participate. There are no kingmakers who determine who wins and who loses.

ECC blog

By using cryptographic techniques, ZEC can obscure identifying information such as addresses and transaction amounts from anyone that’s not allowed to see. The coin uses a cryptographic technique called zero-knowledge proofs, which allows transactions to be made without specifying any details about those transactions other than the fact that they are legitimate. The protocol also allows users to make all their transactions anonymous, except to a specified list of addresses.