WHICH IS BETTER?
Zcash vs Ethereum
A Complete Comparison with All Pros/Cons of ZCash vs. Ethereum
Zcash (ZEC) vs Ethereum (ETH)? These two are among the hottest and the most exciting cryptocurrencies being frequently talked about right now. What are their pros and cons? How is Zcash different from Ethereum? If you are a crypto investor, then you might be wondering; which of them is expected to outperform in 2020?
It’s not easy to understand and compare these cryptocurrencies. For that reason, we have researched and created this complete comparison guide. We will help you understand both Ethereum and Zcash!
Which one should you buy? This is the main question we will help you answer. It doesn’t matter if you want to choose the best or invest in both Zcash and Ethereum for a diversified investment. You will learn all the differences to make your own decision.
If your plan is to pick one over the other, this complete comparison guide will help you understand their differences and similarities so you can make an educated decision on Zcash vs Ethereum.
In this guide, we will give answers to all your questions. We will discuss essential factors including their origins, the algorithms both cryptocurrencies are based on as well as their collaborative projects. This guide will also consider the pros and cons of Zcash vs Ethereum besides addressing their frequently asked questions.
Let’s begin by looking at our side-by-side comparison →
Top 3 Crypto Exchanges - September 2020
Welcome to CryptoRunner! I’m David Andersson, co-founder of this site.
We understand that cryptocurrencies can be confusing and frustrating. That’s why we are here to help you.
Zcash vs Ethereum, both digital assets are only similar because they are blockchain-based. Beyond that, these two payment networks share nothing else in common.
Nevertheless, the innate differences between Zcash vs Ethereum are quite many, as the team behind these cryptocurrencies have different structures and have also established different goals in the blockchain community.
The summary table below shows some important figures to compare. Which numbers are most important? That depends on who you ask. You should continue reading the guide to learn about all the differences. If you want to choose the best cryptocurrency for you, it’s not enough to compare some numbers. However, let’s start by comparing ZCash with Ethereum →
|ZCash (ZEC)||Ethereum (ETH)|
|What is it?||Digital currency||Digital currency / Blockchain platform|
|The Creator||Zooko Wilcox||Vitalik Buterin|
|Launch Date||October 2016||July 2015|
|Supply (number of tokens)||21 million total||18 million per year|
|Block Confirmation Time||≈ 2.5 minutes||≈ 15 seconds|
|Block Size Limit||2 MB||1 MB|
|Current Block Reward||12.5 tokens per block||5 tokens per block|
|Smallest Unit||0.00000001 ZEC||1 Wei = 0.000000000000000001 ETH|
|Normal Description||Private digital cash||Programmable contracts and money|
What is Zcash?
After it was created by a team of developers, amongst who is the prominent developer named Zooko Wilcox, Founder, and CEO; ZCash was officially launched on October 28, 2016.
Wilcox, an experienced cryptographer was a Bitcoin fan who after examining the way the flagship currency was designed, noticed that Bitcoin transactions are made open for anyone to see.
He didn’t like this transparency and then decided to perform a fork, making certain changes to the Bitcoin code that eventually resulted in the birth of a privacy-focused cryptocurrency named Zcash.
Send money anonymously
Unlike Bitcoin, you can anonymously send and receive funds quickly on Zcash blockchain without exposing yourself to security risks. In fact, the only information made available to the public is the date and time of the transaction!
Furthermore, the Zcash blockchain is powered by its own cryptocurrency, which is known as ZCash, or ZEC. The ZEC coin has a total supply of 21 million coins which are expected to be mined completely in the year 2032.
It is worthy of note that Zcash is decentralized. In order words, ZEC is not under the control of any individual or authority. Rather, Zcash blockchain is maintained by miners who are rewarded with Zcash coins for their time and electricity used.
Following its launch, the Zcash project has gained the support of some big names in the crypto industry. While ZEC has been referred to by Edward Snowden as the most interesting alternative to Bitcoin, cryptocurrency legend Roger Ver and ex-banker Barry Silbert were among its earliest investors.
What is Zk-SNARKs?
To achieve its aim to keep all transactions private, Zcash uses the Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKs). While it’s a mouthful to say, the capabilities of this algorithm are quite simple.
zk-SNARK is a new cryptographic method that allows users to send information among them without revealing their identities to anyone on the blockchain. This, of course, is quite different from any other systems of proof where at least one party has the knowledge of all the important information.
While zk-SNARK seems to be modern technology, it might interest you to know that it was first developed in the late 1980s and was first constructed in a paper in 1992 by Joe Killian.
Now you know the background of ZCash! Let’s go a step further in this Zcash vs Ethereum comparison to consider their advantages and disadvantages →
Zcash Pros & Cons (Why Invest?)
Pros of Zcash
- Privacy: Zcash is designed to shield your transactions and keep the identity of the sender and receiver anonymous.
- Interchangeability: Zcash is completely interchangeable. Meaning, you can substitute Zcash block for any other.
Cons of Zcash
- Zcash as a privacy coin can be used for illicit activities.
- Although decentralized, Zcash has a centralized foundation and development team.
- Zcash is restricted to CPU mining.
Is Zcash a Good Investment or Not?
Zcash is clearly worth investing in. While we have mentioned above its disadvantages, Zcash is highly valued in the crypto community for its unique approach to privacy. The network, as we have highlighted, keeps all transaction and addresses hidden from being exposed to third parties.
This feature has helped ZEC to be demanded by both businesses and individuals and the price of Zcash does not in any way influence it. What is more, another reason Zcash is worth investing in is because of its volatility. With every decline in price comes with a large number of significant price increases.
However, you should continue reading to make your own decision. What does Ethereum have to offer? We’ve got this covered in this Zcash vs Ethereum guide. Read on!
What is Ethereum?
Put simply, Ethereum is open-source software and decentralized platform based on the public blockchain technology. This platform is designed to enable developers to build and deploy decentralized applications (Dapps) such as smart contracts.
After it was initially proposed in late 2013, Ethereum was eventually brought to life in 2014 by the then 19-year-old co-founder, Vitalik Buterin and has since become the most recognized and established digital coin after Bitcoin.
What is more, the Ethereum network is incentivized by its own currency called Ether.
What is a Smart Contract?
This is a computer program or code that runs on top of a blockchain and it has been digitally designed to smooth out the process of buying and selling between two persons.
Smart contracts, in the absence of third parties, allow for transparent performance and credible transactions and these transactions are traceable and irreversible.
This concept was first proposed by Nick Szabo in 1996 in his publication entitled “Smart Contracts: Building Blocks for Digital Markets.” Learn more in this video:
For more information on Ethereum, we recommend our guide: What Is Ethereum? No two cryptocurrencies are alike. Hence, comparing Zcash vs Ethereum means looking at the basic similarities as well as the differences they have that make them unique. Below you will find all the pros and cons with Ethereum.
Ethereum Pros & Cons (Why Invest?)
Advantages of Ethereum
- Support – Ethereum blockchain is backed by influential figures in the venture capitalist (VC) market.
- Immutability – It’s impossible for a third person to modify the blockchain.
- Secure – When the PoS algorithm and the blockchain’s cryptographic techniques are combined, you’ll have an impermeable system that’s safe from hacking attacks and fraudulent activities.
- Zero downtime – All organizations, smart contracts, and applications running on the Ethereum blockchain never go down and can’t be switched off.
- Regulation – Ethereum has a clear regulatory framework as the cryptocurrency is not considered a security by the U.S. SEC.
- Easy to use – Creating ERC20 token is easy, simple and fast.
Disadvantages of Ethereum
- You cannot enhance the functionality of Ethereum blockchain but only contribute to its development.
- Smart contracts depend on the existence of Ethereum.
- Ethereum excessive dependence on its founder, Mr. Buterin might affect the development.
- Ethereum’s PoW mechanism has made the transaction speed slower and susceptible to congestion.
- Ethereum has many new competitors who are learning from its flaws.
Should I Invest in Ethereum?
That is one of the most frequently asked questions. If we consider all the advantages and disadvantages we come up with a simple answer: YES
The benefits clearly outweigh the risks with the cryptocurrency. The huge potential makes it difficult to not recommend Ethereum. Since it’s one of the largest and most popular cryptocurrencies, it has an obvious choice for your investment portfolio.
Ethereum is one of the most credible and used cryptocurrencies as many companies around the globe now accept payments in ETH. Ethereum is popular, trusted, and cheap. It can be used to launch new DApps and tokens even though Initial Coin Offerings (ICOs) seem to have lost their shine at the moment. Will Ethereum price rise again? While it’s always best to seek an expert viewpoint, we believe that ETH’s value will rise again. So if you are interested in a stable coin, Ethereum is a good investment.
Having said that, is Ethereum better than Zcash? That question is harder to answer. Below we compare important parts with Zcash vs Ethereum →
Zcash vs Ethereum – Mining, Projects, & Which is Best?
Zcash vs Ethereum Mining
Ethereum mining is based on the Proof of Work (PoW) algorithm. The team is currently making plans to transition to the Proof-of-Stake (PoS) protocol. Within this concept, mining a block is based on how large of a stake an individual holds, or, the number of coins one has.
As per the concept of PoS algorithm, block validators do not receive a block reward; rather, they collect network fees as their reward. The network fee is called gas, which essentially powers every operation on the network.
What is more, there are no mathematical problems to solve with PoS algorithm while creators of new blocks are chosen in a deterministic pattern.
Ethereum and Zcash both use PoW
Like Ethereum, Zcash mining solely based on the so-called Proof of Work (PoW) algorithm. PoW means that miners compete against each other using processing computational power in order to produce a new block on the chain and to earn Ether.
The PoW algorithm for Zcash is Equihash, which is a type of mining algorithm that is incompatible with the special mining hardware known as ASIC. It is ASIC-resistant because it makes it difficult for miners to mine using CPU or GPU hardware. Click here to learn more about Equihash.
Zcash offers “Founders Reward”
Regarding mining reward, the first miner who succeeds in solving a complex cryptographic puzzle of each block receives Zcash as quickly as possible for his computers efforts. Ten percent of the total amount of coins produced by 21 million ZEC units goes to what Zcash call the “Founders Reward”, which includes the founders, investors, advisors, and employees.
Moreover, for the first 4 years of operation, a total of 50 ZEC will be issued every 10 minutes, and 80 percent of that newly created ZEC will go to the miners while 20 percent goes to the Zcash team.
Having said that, can you think of two crypto communities who love the idea of doing the first blockchain merger? Your guess is as good as mine; Zcash and Ethereum!
When comparing the differences between Zcash vs Ethereum, it is imperative that we highlight their projects. It is not uncommon that partnership in the world of blockchain seems unpleasant at times as supporters of two competing blockchain networks often criticize each other due to their personal interest in the future of specific coins.
However, despite the differences highlighted above, the team behind Ethereum and Zcash are collaborating on a research project to bring their unique features together. So far, Zcash and Ethereum have had at least 3 well-known semiofficial projects which have led Vitalik Buterin in becoming an advisor to Zcash.
Zcash and Ethereum have strong collborations
The first project, known as Zcash on Ethereum (ZoE) aims to integrate Zcash anonymity into Ethereum blockchain. In other words, the idea behind the alliance is to allow for private transactions to occur on the Ethereum blockchain. Hence, if everything goes well, all Ethereum contracts will be able to send and receive Zcash.
Learn more from the video below, as Zooko Wilcox, the chief developer of Zcash gave a presentation about the integration in DevCon2 in Shanghai:
Then there’s the second project codenamed project Alchemy. The plan is basically to enable the connection between Ethereum and Zcash. The joint effort of these two organizations is to combine programmability and privacy to facilitate the development of applications.
It is worthy of note that the third project, Hawk, is another initiative with the same goal of making Ethereum transactions untraceable using Zcash’s underlying protocol to hide the addresses of both the sender and receiver.
But the question weighing on people’s minds is; can the creation of DApps on a blockchain with zero knowledge proofs be possible? Let’s keep our fingers crossed. Zcash vs Ethereum are just two of the most well-known networks in the crypto world. So, which one of them will outperform this year?
Zcash vs Ethereum – Which is Best?
When venturing into cryptocurrency investment this year, it’s important to take into consideration the points we have highlighted in this Zcash vs Ethereum comparison.
While there is no direct answer to this question, Zcash has been performing pretty well since its inception. The same can be said of Ethereum. However, when put together, both cryptos complement each other. While Zcash reduces transaction visibility and boosts privacy, Ethereum, on the other hand, acts as the operating system in the cryptosphere.
Moreover, the teams behind these ever-evolving blockchain networks are reinventing and redefining their value propositions. Whilst mentioning their many pros and cons, the teams behind Ethereum and Zcash have developed a robust cryptocurrency which is set for success.
Which Should You Buy?
You need to make that decision yourself. We hope this was enough information to compare these cryptocurrencies. If nothing else, you can buy both Zcash and Ethereum to build a diversified long-term portfolio.
Which one will you buy? Let us know in the comments! Below you will find the best exchange for buying both Zcash and Ethereum →