Zcash is a privacy-
protecting cryptocurrency.
It has two types of addresses.
Shielded addresses, which fully
protect your financial privacy.
And transparent addresses,
which have balances and
transaction histories that
are viewable by everyone.
Transparent addresses
work just like Bitcoin.
They’re public.
Shielded addresses,
however, are private.
They don’t reveal balances
or transaction histories.
Zcash lets you decide what
type of address you want to use.
For example, if you’re
running a charity that
values transparency, you might
use a transparent address
so other people can
verify each transaction.
On the other hand,
if you’re just
doing some personal
shopping, you might
use a shielded address
so your balance info
and past purchases are kept private.
So how does Zcash’s shielded
transactions actually work?
Zcash’s shielded
transactions are enabled
by a cryptographic breakthrough
known as the Zero-Knowledge Proof.
The Zero-Knowledge
Proof allows anyone
to prove they know something…
without sharing what they know.
For example, let’s
take two people, Peggy
and Victor. Peggy sends Victor
some Zcash… And both of them
use a shielded address.
Thanks to Zcash’s implementation
of Zero-Knowledge Proofs,
Peggy can pay Victor…
Without either
of them revealing their
balances or prior payments.
So Victor is happy because
his info stays private
and he knows for sure
that he got paid.
And Peggy is happy
because her financial info
remains private too.
Zero-Knowledge Proofs
make Zcash’s privacy possible.
They allow Zcash
payments to be
private without a
bank or credit card
company in the middle,
verifying every transaction.
And ultimately, they
make Zcash’s vision
of a decentralized,
private, global currency
a reality for everybody.