One is a privacy-focused fork of Bitcoin that facilitates completely anonymous transactions. The other is a distributed network-based virtual machine that can execute smart contracts (digital contracts) and run decentralized applications (dapps).
Zcash (the former) and Ethereum (the latter) have as much in common as any two cryptocurrencies in that they are both blockchain-based digital assets, but beyond that, their only commonality is their teams’ desire to collaborate with one another.
This Zcash vs Ethereum article will provide an overview and comparison between the two cryptocurrencies and explore the projects they’ve worked on together while covering the following topics:
- Ethereum and Zcash Side by Side
- Ethereum Overview
- Zcash Overview
- Collaborative Project
- ETH and ZEC: Price History
|Launch Date||July 30th, 2015||October 28th, 2016|
|Creator||Vitalik Buterin||Zooko Wilcox|
|Algorithm||Ethash (PoW, switching to PoS)||Zerocoin (PoW)|
|Average Block Time||15 Seconds||2.5 Minutes|
|Block Halving||Constant Generation, Every Year||Every 840,000 Blocks|
|Max Total Coins||No Max (Max Growth of 18M per year, with 72M at launch||21,000,000|
Ethereum is an open-source blockchain-based dapp platform with smart contract functionality, and a goal of creating what amounts to a global computer to power a decentralized economy. The platform can be used to create new tokens using Ethereum’s ERC20 token standard, which enables anyone to launch their own cryptocurrency that can be connected to smart contracts.
Ethereum was created by Vitalik Buterin, who first proposed the project in 2013 when he was only 19. Originally, Buterin was part of the Bitcoin community and wanted to implement a decentralized application scripting language and smart contracts into Bitcoin.
Lacking support from the community, Buterin and his newly formed team (Charles Hoskinson, Mihai Alisie, and Anthony Di Iorio) announced the beginning of their work on Ethereum in January 2014. They began development soon after and launched the platform in August 2015.
Ethereum is built on the Turing complete Ethereum Virtual Machine (EVM), which is a suite of protocols that can execute blockchain-based dapps.
The Ethereum blockchain is maintained by computer “nodes” that all run the EVM, executing the same instructions and storing the same data for dapps — all with very high fault tolerance, close to zero downtime, and with about as much permanence as electronic data storage can allow.
As mentioned, the other important innovation that Ethereum brought to the blockchain space is smart contracts. These are essentially self-executing contracts that are programmed to carry out specific digital transactions when specified conditions are met.
Although the concept was first described over two decades ago, Ethereum is the first use case of smart contracts on any sort of scale. Use cases for smart contracts on the platform (or elsewhere) include music copyright tracking and royalty payouts, insurance claim settlements, or escrow services for buying and selling assets.
Multiple smart contracts can even be used in an organized way to form the basis for Decentralized Autonomous Organizations (DAOs) — whole organizations that run entirely through smart contracts without human interference.
Ethereum has been in fairly heavy development since its conception and is currently in the third stage of a four-stage development roadmap:
1. Frontier: Launched in July 2015, this was the foundational platform — a limited network to develop and test dapps and the different functions of the EVM.
2. Homestead: Launched in March, 2016, this phase brought more security features and protocol improvements, while laying the foundations for future upgrades.
3. Metropolis: Launched in October 2017, this current stage adds important functions to Ethereum and will make the network more efficient. It includes implementing:
- Zk-SNARK: a privacy protocol designed to handle private smart contracts and transactions. This is a Zcash and Ethereum collaboration.
- Proof of Stake early implementation: beginning the transition to the more efficient Proof of Stake (PoS) protocol and moving away from Proof of Work (PoW).
- More Flexible and Robust Smart Contracts: self-explanatory.
- Account Abstraction: involves making Ethereum more user-friendly.
- Sharding and Plasma: interrelated processes through which the blockchain will be able to be split into sub-blockchains called “shards” that can operate more efficiently at scale.
4. Serenity: Date of launch is yet to be announced. It will overhaul the blockchain completely with PoS.
Zcash has a much narrower focus than Ethereum: allowing parties to send transactions without revealing their origin, destination or value information. This is made possible via what Zcash calls ‘shielded’ transactions, which use a zero-knowledge proof mechanism called zk-SNARK.
Zcash was created by the Zcash Electric Coin Company, going live on October 28, 2016. Founders of Zcash originally granted themselves 10% of the total of 21 million coins, with the rest still being doled out incrementally to miners and investors.
Zcash has similarities to other blockchain technologies, but with an added layer. What sets Zcash apart is, of course, its focus on privacy, which is where zk-SNARK comes in (an acronym for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge).
Most cryptocurrencies validate transactions by linking the sender and receiver addresses along with the input and output values on a public blockchain. Zcash, on the other hand, uses the cryptographic method zk-SNARK to allow validation of a transaction without revealing any important information about it. Since all payment information is encrypted, it can’t be seen by anyone on the blockchain, but it can still be validated against rules shared by the network.
When Zcash first launched, its developmental focus was on stabilization and incremental improvement that saw various bug fixes and usability features added to the wallet. So far, no security bugs have been discovered, and Zcash has had no network downtime or security breaches.
The team lists five key areas of improvement they are currently working on:
- Payment Disclosure, which will allow people to reveal payment information to specific parties if desired.
- Payment Off-loading, which will allow light wallet users to send payments to shielded addresses.
- Cross-Chain Atomic Transactions (“XCAT”), which will allow cross-chain trading between Zcash, Ethereum and Bitcoin.
- The “Sapling” Cryptography Upgrade, the first upgrade to the core Zcash protocol, focused on efficiency.
- User-Issued Tokens, which will allow users to issue their own tokens that use Zcash’s privacy features.
The Zcash team has also noted that they may allow for the adoption of the newly budding Lightning Network or its privacy-based counterpart, BOLT.
Despite their differences, or perhaps because of them, Zcash and Ethereum have collaborated to bring their unique features together.
Developers of both projects are working to establish a mechanism for integrating zk-SNARK into Ethereum without relying on a specific setup of network rules (i.e. not necessarily the Zcash setup) to do so.
“Ethereum’s Zcash integration will not enshrine any specific trusted setup at protocol level,” wrote Buterin on reddit in June 2017. “It just implements a few cryptographic building blocks so that people can do the rest themselves on top in EVM code. That is to say, anyone will be free to organize their own trusted setup, and if you don’t trust a given setup you are free to use another one.”
Although members of Ethereum’s team have had conflicts with other cryptocurrency teams in the past, Zcash and Ethereum, at least, have come together to show how two seemingly different projects can collaborate to innovate on new tech in the blockchain space. Wide-ranging popularity will likely see these two projects continuing to exist side-by-side among the top cryptocurrencies for the foreseeable future.
Subscribe for the latest cryptocurrency news
More Crypto News
Next year will see the launch of the Crown League, a professional fantasy football league…
Jack Dorsey’s Square Cash App continues to expand. After revealing massive growth earlier this year,…