By Matt Hussey and Jason Nelson
8 min read
For many years, Bitcoin was used to buy drugs online because it was believed to be anonymous. Turns out, it’s surprisingly easy to track Bitcoin transactions. Zcash, on the other hand, is a cryptocurrency that promised something Bitcoin couldn’t deliver: privacy.
Zcash is designed to hide key transaction details, such as the sender, recipient, and amount. By using cryptographic techniques, transfers can be made that can’t easily be traced on a public ledger while remaining verifiable by the network.
Zcash allows transactions to be either transparent, like Bitcoin, or private using zero-knowledge proofs known as zk-SNARKs. This cryptography verifies that a transaction is valid without exposing the sender, recipient, or amount. It is a fungible cryptocurrency when coins are fully shielded, meaning tokens in the private pool are not linked to transaction history. However, most Zcash coins exist in the transparent pool, which, like Bitcoin, maintains a visible history.
The network maintains two pools of addresses: transparent (t-addrs) and shielded (z-addrs). Wallets such as ECC’s Zashi now default to shielding funds, encouraging greater privacy.
Zcash launched in October 2016 as a privacy-focused cryptocurrency developed by the Electric Coin Company (ECC), led by Zooko Wilcox-O’Hearn, drawing on research from Johns Hopkins, MIT, Tel Aviv University, and other institutions. Like Bitcoin, Zcash (ZEC) has a maximum supply of 21 million coins and block reward halvings every four years.
While ECC initiated Zcash, it does not own or control the blockchain. All upgrades require community approval, keeping development decentralized and open rather than directed by a single entity.
In April 2022, Edward Snowden was revealed as one of the participants in the ceremony. "He did it as a service, as a public good, and believing in privacy," Josh Swihart, former CEO of the Electric Coin Company, told Decrypt.
Zcash, like Bitcoin, uses proof-of-work (PoW) to validate transactions, but it runs on the Equihash algorithm—a memory-hard hashing function designed to make mining fairer and more resistant to ASIC hardware, and the proof-of-work algorithm Zcash adopted at launch to secure its network.
Currently, Zcash miners receive 80% of each block reward, while 20% goes to development funds that support the Electric Coin Company (ECC), the Zcash Foundation, and community grants. This development funding structure is governed by community decision and is set for renewal or revision after the 2028 halving.
Zcash is a peer-to-peer cryptocurrency designed for everyday payments. Users can choose between transparent transactions that are regulator-friendly and shielded transactions that enhance privacy. This optionality has helped Zcash remain listed on more major exchanges than some other privacy coins, such as Monero, which are avoided by certain platforms due to regulatory constraints.
Regulators and law enforcement agencies have long scrutinized privacy coins, arguing that their anonymity features can be misused for money laundering or sanctions evasion. In 2020, the U.S. Treasury Department’s Financial Crimes Enforcement Network proposed tighter rules for “anonymity-enhanced cryptocurrencies,” naming Zcash alongside Monero, Dash, Komodo, and Beam.
That pressure led some exchanges to delist privacy coins. ShapeShift dropped Zcash in November 2020 and OKX followed in 2023, though both later brought it back: OKX relisted ZEC in November 2025, and ShapeShift reintroduced it in December 2025. Binance still lists Zcash, but in April 2025 it added the token to a list its community could vote to delist.
In May 2026, independent security researcher Taylor Hornby used Anthropic’s Claude Opus 4.8 to find a critical flaw in Zcash’s Orchard shielded pool that could have let an attacker create unlimited counterfeit ZEC. Developers coordinated a confidential fix with miners, exchanges, and other ecosystem participants before the Zcash Foundation disclosed the four-year-old vulnerability on June 3, 2026, alongside an emergency network upgrade.
Developers said there was no evidence the flaw had been exploited, but because Orchard transactions are shielded, there was no cryptographic way to prove that no counterfeit coins had been created. The disclosure wiped billions of dollars from ZEC’s market capitalization and fed a broader debate about AI models as vulnerability-discovery tools.
Zcash founder Zooko Wilcox responded by proposing Ironwood, which activated in July 2026. The upgrade retired the Orchard pool, which then held some 3.7 million ZEC, worth $1.7 billion, and required holders to migrate those funds to a new shielded pool. A “turnstile” caps withdrawals from Orchard at the amount verifiably deposited into it, so any counterfeit ZEC is trapped permanently. Ironwood also introduced quantum-resistant transaction records and a formally verified proof circuit.
Zcash’s NU7 upgrade activated at block 3,543,405 on November 6, 2026. Its centerpiece is the Network Sustainability Mechanism, developed by Shielded Labs, which removes 60% of transaction fees from circulation and reissues them through block rewards from 2031. The aim is to keep paying miners as halvings shrink the block subsidy, without breaching the 21 million ZEC cap.
NU7 also cut Zcash’s target block time from 75 seconds to 25, so transactions confirm about three times faster, with the reward per block reduced to keep overall issuance unchanged. The upgrade retired Sprout, Zcash’s original shielded pool from 2016, leaving about 12,224 ZEC that holders had not moved out frozen in the pool.
With regulators tightening surveillance of digital assets, Zcash faces a pivotal period, as a halving, a major funding overhaul, and a migration to new software converge.
In December 2025, Zcash founder Zooko Wilcox took an advisory role at a firm building a large ZEC treasury. In January 2026, the Zcash Foundation said the U.S. Securities and Exchange Commission had closed a long-running investigation without recommending enforcement action.
That same month, the entire team at Electric Coin Company said it had been “constructively discharged” following a disagreement with a majority of the board of Bootstrap, a 501(c)(3) nonprofit created to support Zcash. Former ECC CEO Josh Swihart and his colleagues went on to launch cashZ, focused on full-stack Zcash development and a new wallet. Separately, independent development group Shielded Labs, whose contributors include Wilcox, received about $1.16 million from Gemini founders Tyler and Cameron Winklevoss.
In September 2026, coinholders voted 98.9% to keep Bitcoin-style halvings rather than switch to a smooth issuance curve, with 2.4 million ZEC, or 66% of the eligible supply, taking part. A further vote on Zcash Community Grants’ share of the development fund was scheduled for November 16 to November 30, 2026.
Zcash is also preparing for quantum computing. In May 2026, Swihart said the network was targeting full post-quantum status within 12 to 18 months. In October 2026, full node developer Zakura proposed one-time viewing keys to stop a future quantum computer from linking a wallet’s shielded payments through addresses published during cross-chain swaps.
Zcash’s next halving is scheduled for November 2028, when the current development fund also ends. ECC is deprecating the C++ full node “zcashd” in favor of the Rust-based “zebrad,” with a new wallet called Zallet also in development.
This article was updated in October 2026 to reflect recent developments.
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