*** DISCLAIMER: THIS ARTICLE WILL BE UPDATED FREQUENTLY TO REFLECT ANY CHANGES IN TECH. THE BEST WAY TO FIND OUT ABOUT ZCASH AND MONERO IS TO ACTUALLY USE THEM FOR YOURSELF.***
Privacy is a hot topic.
In the last few years, we’ve seen data breaches at major companies like Facebook and Equifax, as well as government surveillance programs like PRISM that allow intelligence agencies to collect information on millions of people without their knowledge or consent. In response to these developments, several cryptocurrencies have emerged that offer greater privacy than Bitcoin does by default — including Monero (XMR) and Zcash (ZEC).
Cryptocurrencies have changed the way we think about money and privacy. Zcash and Monero are two popular privacy-focused cryptocurrencies that have gained widespread attention in recent years. Both offer users a high degree of anonymity, but which one is better?
Monero uses ring signatures and stealth addresses to obscure transactions on its blockchain; Zcash uses zk-SNARKs.
In this article, we’ll take a closer look at the key differences between Zcash and Monero, and why we believe that Zcash is the superior privacy coin.
What is Zcash?
Zcash is a cryptocurrency that offers privacy and selective disclosure of transaction details. It uses zero-knowledge proofs (ZKPs), which allow the validity of transactions to be proven without revealing any information about them other than whether they are valid or not.
What is Monero?
Monero is a cryptocurrency that focuses on privacy and security. It uses ring signatures to hide the sender’s address, which makes it hard for third parties to know who sent the transaction. Ring signatures also make it impossible for anyone other than the sender and receiver to know how much money was actually sent in each transaction.
Monero does hide transaction amounts using bulletproofs, but the bulletproofs do not protect the “who paid whom” information, only the amounts. Partial information about who paid whom is leaked. The way Monero uses Ring Signatures to hide the who paid whom information doesn’t work. The information partially leaks, for it is just “covered up” with noise. In terms of information theory and information security, we know this cannot work against a real adversary.
What is privacy?
Privacy is a basic human right that allows you to control who has access to your information, and how they can use it. Privacy allows us to be ourselves without fear of persecution or discrimination. It protects our freedom of speech, religion, association and other rights essential for democracy.
Comparing Privacy Features
When it comes to privacy, Zcash and Monero both use different techniques. Zcash uses zk-SNARKs (zero-knowledge Succinct Non-interactive Argument of Knowledge) while Monero uses ring signatures.
ZKPs allow you to prove something is true without revealing any information about the details of your transaction or what was being proven in the first place. This means that if someone were to ask you how much money you sent in a specific transaction, they wouldn’t be able to find out by looking at the blockchain because there’s no way for them to tell which output was yours — it could have been any one of thousands!
Ring signatures are another form of selective disclosure: instead of hiding all transactions from everyone except those who know how much money went where (like with zk-SNARKS), ring signatures allow only certain people who have access keys into certain amounts while still keeping other amounts private from everyone else.
Competitive analysis comparing the privacy features of Zcash and Monero
- Uses Zero-Knowledge Proofs (ZKPs) to completely hide transaction information, including amounts involved.
- Offers selective disclosure of transaction details, allowing users to reveal specific transaction details to certain parties while keeping other details private.
- ZKPs require fewer computational resources and are faster to verify, making transactions faster and more energy-efficient.
Offers an additional layer of privacy compared to Monero.
- Uses Ring Signatures to obscure the identity of the sender, making it difficult to trace the origin of a transaction.
- Does not offer selective disclosure of transaction details.
- Ring Signatures require more computational resources and are slower to verify, making transactions slower and less energy-efficient.
- Monero uses bulletproofs (type of ZKP) to hide transaction amounts
Result: Zcash offers superior privacy compared to Monero
In summary, Zcash’s ZKPs provide superior privacy and security compared to Monero’s Ring Signatures. Additionally, Zcash offers selective disclosure of transaction details, making it more versatile than Monero. While Monero offers anonymity for the sender, it does not provide the same level of privacy when it comes to transaction amounts, making it less secure than Zcash.
Another difference between Zcash and Monero is their mining algorithms. Zcash uses the Equihash algorithm, which is designed to be ASIC-resistant. This means that anyone can mine Zcash using their personal computer, which makes it more accessible for individuals.
Monero uses RANDOMX CPU mining. RandomX is a Proof Of Work algorithm developed by Monero contributors and adopted by Monero from release 0.15.
This innovative POW is optimized for CPUs and it’s based on execution of random code and other memory-heavy techniques. The goal is to discourage the use of specialized hardware (like ASICs) for mining Monero. RandomX was created with the intent of keeping mining decentralized and to create a more egalitarian distribution of the block rewards.
The part above about mining contains an error. While equihash was designed to be asic resistant it did not work out that way for the version that Zcash chose and cpu mining is not viable, they didn’t fork mainly because economic security of gpu mining just isn’t as strong as asic mining.
Thank you to John at https://twitter.com/Tripleyouwu for this clarification.
Scalability is another important factor to consider when comparing Zcash and Monero. Zcash has implemented various scalability improvements, including transaction batching and increasing the block size limit.
Additionally, Zcash has implemented a technology called Sapling, which significantly reduces the size of shielded transactions, making them faster and more efficient. Monero, on the other hand, has been criticized for its scalability, as transactions can take longer to process due to the use of ring signatures.
The trustless setup
This system eliminates the need for complex setup ceremonies and provides a catalyst for Zcash user confidence and scalability. It also makes the protocol more attractive, faster, and less expensive for others to build on. Compared to Monero, Zcash’s trustless setup makes it more efficient and secure, as it eliminates the need for complex setup ceremonies and provides a more reliable and cost-effective protocol. Additionally, the Halo proving system provides a more secure and reliable platform for users to construct and verify private transactions. 1
Zcash switching to proof of stake
It has been reported that Zcash is considering a switch from its current proof-of-work (PoW) consensus algorithm to a proof-of-stake (PoS) algorithm. This would involve users staking their Zcash holdings to help secure the network, instead of relying on computational power to mine new blocks. A switch to PoS would significantly reduce the energy consumption of the Zcash network, which is a major concern for many in the cryptocurrency industry. Additionally, PoS would make it more difficult for malicious actors to attack the network, as they would need to hold a significant amount of Zcash to do so. Overall, a switch to PoS would likely result in a more energy-efficient and secure Zcash network.
A switch to proof-of-stake could have a positive impact on the Zcash coin price. With a reduced energy consumption and increased security measures in place, investors may view Zcash as a more attractive investment opportunity. This could lead to increased demand for Zcash, which could potentially drive up the price of the coin. Additionally, the switch to PoS could also result in a lower rate of inflation for Zcash, as fewer coins would be mined through staking than through mining. This could further increase the scarcity and value of Zcash, potentially leading to a higher coin price.
In conclusion, Zcash offers superior privacy and security. It’s more versatile than Monero as well, which means that it can be used for a wider range of applications.
While both Zcash and Monero offer strong privacy features, we believe that Zcash is the superior privacy coin. Zcash’s zk-SNARKs technology allows for completely private transactions, while still offering users the option to make transparent transactions if they wish. Additionally, Zcash has implemented various scalability improvements, making it a more efficient and scalable cryptocurrency. While Monero offers strong privacy by default, its use of ring signatures can make transactions slower and less efficient. Ultimately, the choice between Zcash and Monero will depend on your individual needs and preferences.
It’s important to be aware of the privacy features of different cryptocurrencies. Privacy is a right, and it’s your responsibility as a cryptocurrency user to protect yourself from prying eyes.
Thank you for reading. I hope this guide has been of use, and that it will help you stay informed about the privacy-focused cryptocurrencies of Zcash and Monero.
Sidenote: I want to make it clear that I have no ill will towards Monero, and I appreciate the innovation and advancements they have brought to the cryptocurrency space. While I believe that Zcash’s trustless setup and ZKPs makes it a superior choice when it comes to technology and privacy, I still hope that Monero continues to have great success and push the industry forward. In the end, healthy competition and innovation benefit the entire community, and I look forward to seeing the advancements that both projects and even others will bring in the future.
PS- If you like videos, zooko gave a 20-minute talk trying to explain how privacy works technically, from an information theoretical perspective.