Bankless: Zcash big pump encryption privacy becomes the focus again

Author: David Christopher, Source: Bankless, Translated by: Shaw Jinse Finance

Privacy technology is being driven by speculative enthusiasm.

Since the end of September, the price of Zcash's ZEC token has increased tenfold, and the cryptocurrency social media is filled with various discussions about the resurgence of the privacy coin concept. Last week, the Winklevoss brothers launched their Zcash digital asset treasury reserve, aiming to accumulate at least 5% of the total supply of the token.

Although there is indeed some fervor at the moment, do not attribute the recent price increase solely to speculation. All this attention is prompting users to start utilizing the features of the network — Zcash's privacy-preserving shielded pool currently holds nearly 29% of the circulating supply, up from 8.7% a year ago.

When buyers discover that a token has clear practical value and profit potential, they often become staunch supporters—privacy technology may need a large number of such supporters to develop while continuously facing challenges from the government.

Reasons for the Surge in ZEC Price

Zcash was established in 2016 through a direct fork of Bitcoin, aiming to address the privacy vulnerabilities of digital gold. Like the Bitcoin protocol, Zcash adopts a proof-of-work (POW) consensus mechanism, with a supply cap of 21 million coins, and follows a halving mechanism approximately every four years.

Each ZEC can be in a transparent or shielded state:

• The working principle of transparent trading is similar to that of Bitcoin, where addresses and amounts are visible on the chain.
• Shielded Transactions use zero-knowledge proofs to hide the sender, receiver, and amount, while still allowing verifiers to confirm the validity of the transaction.

Users can freely switch between these states.

As many have pointed out, there are numerous factors driving the rise of Zcash. Its technology has indeed seen significant improvements, and concerns about privacy in the cryptocurrency space and beyond are intensifying. Its parabolic price movement reflects these changes.

Its technology upgrades include:

• Near Intents: Zcash has integrated with Near Intents, allowing ZEC to function as a “circuit breaker”. Users can convert “transparent blockchain” funds (ETH, SOL, etc.) to ZEC, shield ZEC, and then bridge to swap back to the original chain—disrupting the connection between addresses.
• Tachyon: A significant performance upgrade comparable to Solana's Firedancer will be released next week, significantly improving network speed and scalability.
• Zashi Wallet: Zashi was launched last year, simplifying the complex processes that previously hindered ordinary users from conducting secure transactions.
• Protected Shield Supply Growth: As mentioned earlier, the number of ZEC in the protected shield pool has significantly increased over the past year, which helps enhance the overall privacy of the network while exerting a certain “deflationary” pressure on token supply.

Despite all these advancements, we have also witnessed a long-standing urgent demand for privacy in the crypto space, reflected in the increase of on-chain activities and the overall sentiment across the industry. Institutions are migrating to on-chain solutions, requiring privacy to conduct transactions and remain competitive, which has transformed privacy from a concept into a technological necessity.

As the overall trend of the cryptocurrency market becomes weaker, it remains to be seen whether ZEC's upward momentum can be sustained. However, given that privacy issues continue to spark heated discussions in the tech community, ZEC remains a high-quality cryptocurrency asset worth paying attention to.