Crypto War: Zcash Vs Monero

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Crypto War: Zcash Vs Monero

Anonymity is one of the features which attracted early adopters to cryptocurrencies, but it is often sacrificed to gain approval from traditional institutions and regulators. A larger number of exchanges and platforms which offer the primary currencies, such as Bitcoin, Ether, and XRP request a minimum amount of due diligence documentation.

Keeping transactions anonymous is getting harder, but two cryptocurrencies are working to change that. Both Zcash and Monero offer anonymous payments, but how they go about it is significantly different. This guide will tell you all you need to know about the ongoing Zcash vs Monero crypto war and will let you decide which currency is the winner.

Privacy Features of Zcash and Monero

monero blockchain

Zcash, or ZEC, was launched in 2016 by Dr. Matthew D. Green, an associate professor of computer science at John Hopkins I.S.I. The Zerocash protocol within which ZEC exists includes non-interactive, zero-knowledge proofs, between known at zk-SNARKs. These proofs enable transactions to take place between shielded addresses. While this feature allows ZEC to carry out anonymous trades, the protocol is equally able to support transactions from transparent addresses.

A transparent address is similar to a standard public address, such as the one used for BTC. Whenever these addresses are involved in a transaction they provide data without any encryption, making them publicly available. As a result, you can easily search for Bitcoin transactions.

A shielded address, meanwhile, encrypts transaction data so that it is not publically viewable. With shielded addresses, discovering user identity become significantly trickier.

Monero, or XMR, was released in 2014, and its private transactions are possible thanks to four different features.

  1. Ring Signatures – the sender’s identity remains anonymous as the origins of a transaction are encrypted
  2. Ring Confidential Transactions – also referred to at RingCTs, this feature encrypts the value of a transaction, similarly to zk-SNARKs, but using a different protocol
  3. Kovri – this feature hides the IP addresses of the two parties of a transaction
  4. Stealth Addresses – encrypt the recipient’s identity and location

While Zcash offers users the option to choose shielded or unshielded addresses, Monero keeps users anonymous by default.

Zcash vs Monero: Fundamental & Technical Specs

In order to understand the winner of the Zcash vs Monero war, you must consider all their technical specs and primary purposes.

Purposes

Both Zcash and Monero are cryptocurrencies designed for making payments. This purpose is similar to Bitcoin but unlike other cryptocurrencies, such as Ethereum and EOS, which instead have the purpose of running smart contracts.

The key distinction between ZEC and XMR and other payment currencies, such as Bitcoin or Litecoin is that it is possible to protect the identity and details of the parties of the transaction. In the case of Monero, this is done automatically, whereas individuals using Zcash can choose this option.

Speed

zcash mining

The time taken for a new block to be added to the Zcash Blockchain is about 2.5 minutes. Compared to the Bitcoin mining process, this is about four times faster. Monero’s block time is two minutes, making it slightly faster than Zcash.

The ZEC Blockchain speed varies considerably based on network usage. Each block can only hold a certain number of transactions, so during busy periods, some users might need to wait for subsequent blocks before seeing their transaction processed. Moreover, transactions involving shielded addresses require more space, slowing down the network further. In fact, if the Blockchain were only to run private transactions it would only manage six per second.

The Monero Blockchain functions in a different way called a dynamic block size limit. In this special Blockchain, blocks are able to expand or retract based on the volume of transactions. The size of a new block is determined on the size of the preceding 100 blocks. This ensures a gradual increase or decrease in size.

Whilst some have claimed that Monero could theoretically support 1,700 transactions per second, it is highly unlikely due to memory restrictions. Other cryptocurrencies, such as EOS and NEO, are actually able to support a higher number of cryptocurrencies, but this is primarily due to the use of a different consensus mechanism. 

Adoption

Adoption is one of the factors which most distinguishes Zcash from Monero. Compared to Monero, Zcash’s adoption is significantly smaller, but this is mainly due to Monero’s reputation as a dark web cryptocurrency. The digital currency has been used several times as a ransom payment, and it appears that rogue states are also using it to circumvent international sanctions.

Mining is another reason for this discrepancy, with Monero being much easier to mine and store. Meanwhile, it is harder to find wallets which support Zcash, but this should change as the adoption of this cryptocurrency increases.

In-Browser Mining and Cryptojacking

monero mining

One reason behind Monero’s success is in-browser mining. In fact, unlike Bitcoin, it is still possible to mine Monero using a GPU or CPU. Alternatively, you could also build your own crypto mining rig. In-browser mining, meanwhile, involves running software directly from an Internet browser. Although not very efficient, the process is simple and easy.

Although running just one computer to mine Monero might not be especially profitable, running several hundreds of them can result in significant earnings. While there are genuine mining farms which operate tens or hundreds of different machines, there are also hackers which steal the computational power of unsuspecting users in order to mine Monero.

Known as Cryptojacking, this attack often targets unsuspecting victims, which may not even realise that an attack is taking place. Cases of cryptojacking are increasing, and it appears that Monero is a favourite cryptocurrency mined during these attacks.

Online Publishing

Some content publishers engage in in-browsing mining using their visitors’ computational power. When both parties are aware of the arrangement it can serve as a suitable alternative to traditional advertising. Naturally, the user is free to stop mining as soon as he/she leaves the publisher’s website. In such cases, Monero is usually the cryptocurrency of choice.

However, you could also find sneaky publishers or other websites which are not transparent about their processes. Some hide mining software in downloadable files which run without the owner’s consent.

In-Browser Mining and Charity

Another increasingly popular use of Monero’s in-browser mining capabilities is for charity. UNICEF, the UN’s children’s charity, operates a website called The Hopepage where users can donate some of their unused computational power to mine Monero for the organisation.

Naturally, UNICEF is very transparent about how the process works, and users must opt-in to start in-browser mining. The user must also indicate what percentage of his/her computational power will be donated. This method of fundraising is still in its infancy but shows another exciting aspect of cryptocurrencies and Blockchain technology. The number of users supporting The Hopepage at any one moment averages around 30,000.

Problems with Adoption

Perhaps inevitably, the ability to transact anonymously has raised eyebrows in several jurisdictions. The Financial Security Agency in Japan announced a ban on anonymous coins in 2018. This ban included Zcash and Monero, as well as other Altcoins such as DASH. The country was amongst the first to accept cryptocurrencies as legal tender but wants to try and eliminate the use of these currencies for illicit transactions. You can have a look at other Monero alternatives compare to the token.

Should the situation worsen, with more countries joining Japan’s ban, the future of both Monero and Zcash could hang in the balance. Zcash’s position, however, is less critical since the cryptocurrency can operate using transparent addresses.

Cost of Fees

zcash vs monero costs
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Monero shares scalability issues with Bitcoin, which means that transaction costs can get very expensive. With the price of Monero currently at around $65, a normal transaction could cost upwards of $1.55. Zcash transactions are significantly cheaper, with the average cost being $0.0002, even though Zcash’s trading price is currently around $36.60.

Zcash transaction fees are also significantly more stable than Monero’s, making it a better currency for regular payments.

Scalability

For any cryptocurrency to compete with a traditional payment method, such as VISA, it needs to be able to scale globally. Networks need to handle thousands of transactions every second, whilst maintaining a secure and accurate infrastructure. So far, most cryptocurrencies have failed to prove that they can compete with such high volumes, and it doesn’t look like either Monero or Zcash hold the key to this issue.

Monero’s answer to scalability is its dynamic block size limit. Unfortunately, due to its correspondingly high fees in busier periods, it is unlikely that this answer will be sufficient. Zcash’s scalability issues are even worse than Bitcoins since private transactions can considerably slow down the network. Furthermore, Zcash is not immune to sudden transaction cost hikes.

Market History

In the Zcash vs Monero battle take place on the open market, Monero is currently in the lead. The cryptocurrency ranks in 12th place, with a market cap of just over $1 billion. Zcash is far behind in 31st place, with a market cap of $287 million.

In order to buy Zcash or Monero, you need to find a reputable cryptocurrency exchange which offers these currencies. Due to their lower popularity, not many exchanges offer them, so finding a suitable one can be difficult. Binance is one of the best ways to buy Zcash and Monero, and if you trade them for other cryptocurrencies you will benefit from some of the best fees in the market. The exchange has recently introduced card payments, so you can now also buy Zcash and Monero with fiat currency.

Zcash vs Monero Comparison Chart

FoundedTotal SupplyTotal Circulating SupplyUSD PriceHighest USD PriceMining AlgorithmBlock TimeTransactions Per Second
ZcashOctober 201621,000,0007,850,531 ZEC$36.68$5,941.80Equihash2 minutes6 – 26
MoneroApril 201418,400,000 (+ 0.3 XMR/minute)17,307,554 XMR$65.61$495.84CryptoNight2.5 minutesTheoretically unlimited

Different Proof-of-Work Algorithms

Both Zcash and Monero use consensus mechanisms similar to Bitcoin. Known as Proof-of-Work (PoW), this process involves computers solving complex algorithms and reaching consensus in order to create a new block. Different currencies implement PoW in their own way. BTC, for example, implements the SHA-256 version. XMR implements the Cryptonight version whereas ZEC implements the Equihash version.

Cryptonight

Monero’s Cryptonight PoW version was introduced by Bytecoin with the assistance of the CryptoNote development team. Cryptonight is designed to be resistant to ASIC machines, which tend to centralise mining power within a few pools. However, ASIC-resistant protocols have not been very successful, since it is estimated that over 85% of mining is done using these machines. A recent hard fork should have addressed this issue.

Equihash

Zcash’s Equihash PoW version was developed by researchers at the Interdisciplinary Centre for Security, Reliability, and Trust at the University of Luxembourg. Launched in 2016, Equihash’s first major implementor was Zcash, but this consensus mechanism has since been adopted by Bitcoin Gold and Bitcoin Private.

Equihash too was designed to be ASIC resistant, but this goal was just as unsuccessful as Cryptonight’s original effort. However, unlike Monero, members of the Community Governance Panel Election voted against any hard forks to re-enforce ASIC resistance.

Coin Allocation

zcash vs monero coin allocation

ZEC and XMR coin allocation vary significantly. While ZEC’s supply is fixed and operates a taxation system, XMR’s total supply is not fixed and there is no taxation on the coin.

ZEC Allocation

Zcash was created with a $1 million investment from several partners. In order to provide a return to investors, the cryptocurrency developed a Founder’s Reward. Up until the first halving event, projected to take place in 2020, 20% of all mined coins will be distributed amongst investors, founders, advisors and employees. A total of 2.1 million ZEC will be distributed, equivalent to around 10% of the total overall supply of 21 million coins.

XMR Allocation

Monero’s coin allocation is significantly different from Zcash’s. Initially, 18.4 million coins will be mined, however, mining is only expected to take place until 2022. After that point, 0.3 XMR will be created every minute for an indefinite period of time. As a result, the currency’s supply is infinite and does not involve any Founder’s Reward or similar taxation.

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