The two most important privacy coins on the market are Zcash and Monero. While their final aim is the same, they approach it in quite different ways. Zcash (ZEC) is a fork of the Bitcoin protocol that uses zk-SNARKS, a zero-knowledge privacy system, to achieve privacy. Monero (XMR), on the other hand, uses a technology called CryptoNote as its foundation. Monero uses ring signatures, ring secret transactions, and stealth addresses to protect the privacy of its senders, transactions, and recipients. In this comparison of Zcash vs Monero, we’ll look at the contrasts and similarities between the two projects.
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ZCash VS Monero Underlying Protocol
Bytecoin, the first real-world implementation of CryptoNote, was launched in July of 2012. The application layer protocol that powers a variety of decentralized currencies is known as CryptoNote. While it is comparable to the application layer that runs bitcoin in many ways, there are major differences between the two.
While bitcoin showed potential in cryptocurrency affiliate programs, many realized that there were a lot of shady activities going on and that 80% of the coins had already been published. As a result, the bitcoin blockchain was forked, and the new coins in the new chain were given the name Bitmonero, which was later shortened to Monero, which means “coin” in Esperanto. Every two minutes, a new block will be mined and added to this new blockchain. Monero has two public keys and two private keys, unlike other cryptocurrencies.
Cryptography: ZCash vs. Monero
Let’s have a look at the cryptography utilized by Monero and Zcash to provide the required anonymity in this part.
Cryptography in Monero
Monero employs three different types of cryptography:
- Ring Signatures ensure that the sender’s privacy is protected.
- Stealth Addresses ensure that the recipient’s privacy is protected.
- Ring CT, also known as Ring Confidential Transactions, ensures the transaction’s privacy.
Signatures on Rings
Let’s look at a hypothetical real-life scenario to see what ring signatures are and how they help protect the sender’s anonymity. Isn’t it true that when you send someone a check, you have to sign it with your signature? Anyone who sees your cheque (and knows what your signature looks like) will be able to identify that you are the one who submitted it.
Ring Confidential Transaction
To overcome this problem of privacy breach, Ring CT was built, which was based on Gregory Maxwell’s research. Ring CT’s function is straightforward: it conceals transaction amounts in the blockchain. This also means that all transaction inputs are no longer required to be split down into recognised denominations; a wallet can now pick up ring members from any Ring CT output. Consider what that means for the transaction’s privacy.
It is now impossible to be aware of any specific transaction because there are so many more possibilities to pick from and the value is unknown.
Cryptography with Zcash
Zcash’s cryptography is based on zk-SNARKS. The acronym zk-SNARKS stands for Zero-Knowledge Succinct Non-Interactive Knowledge Arguments. To comprehend this, you must first comprehend what zero-knowledge proofs are.
When it comes to a zero-knowledge proof (ZKP), there are two people involved: the prover and the verifier. The concept of zero-knowledge argues that a prover can demonstrate to a verifier that they have a particular level of knowledge without revealing what that level of knowledge is.
For a ZKP to work, it must meet the following criteria:
- Completeness: If the statement is true, an honest prover can persuade an honest verifier to believe it.
- Soundness: If the prover is lying, they will not be able to persuade the verifier that the statement is true.
- Zero-Knowledge: The verifier will be absolutely ignorant to what the assertion is if it is true.
Mining In Monero vs Zcash
Monero’s protocol is resistant to ASICs. Monero is built on the CryptoNote system, which employs the hashing method “CryptoNight.” ASICs cannot be used to mine Cryptonight-based cryptocurrencies. It was thought that by doing so, mining pools would be discouraged and the currency would be dispersed more fairly.
The equihash algorithm is used to mine blocks in Zcash. Alex Biryukov and Dmitry Khovratovich created Equihash, a Proof-of-Work algorithm. It’s based on the Birthday Problem in General.
One of the main reasons for using equihash is to make mining as ASIC-unfriendly as possible. The issue with currencies like Bitcoin is that most mining pools monopolize the industry by spending a lot of money on ASICs to mine as much bitcoin as possible.