Zcash promises financial privacy with the abilities of Bitcoin. Created as an experimentative alternative to Bitcoin, it has become the talk of the town in the crypto world. Will Zcash live up to the hype? Let’s find out!

What is Zcash

Zcash is a cryptocurrency, similar to Bitcoin. It was experimentally proposed to tackle privacy issues faced by Bitcoin and was built on the original Bitcoin codebase. Scientists from MIT, Johns Hopkins, and other reputed institutions conceived the idea of Zcash, previously known as Zerocoin. Further development was completed under the Zcash Company as Zooko Wilcox, Founder, and CEO headed the project. The Zcash blockchain was launched in October 2016, and the first Zcash monetary unit came into existence. 

Why Should I Invest In Zcash – Does It Offer Any Robust Use-Cases?

There are solid reasons for users to invest in Zcash. Some of them are as listed below:  

  • Transact privately: Zcash uses zK-SNARK technology for nodes to verify transactions without revealing their sensitive information. Unlike Bitcoin, Zcash does not reveal the transaction addresses or amount. Thus, users can transact and enjoy the benefits of a public blockchain with privacy.
  • Transact with fungibility: Fungibility increases the value of an asset. Zcash coins are flexible as they are fungible and can be easily replaced. Fungibility is ensured by unlinking the coins from their blockchain history. Therefore, their previous history does not have any bearing on their present value. 
  • Transact democratically: Zcash is ASIC-resistant and does not depend heavily on extravagant hardware. Therefore, the coin can be mined seamlessly without any barriers for entry to avoid an early rush.

How Can I Invest In Zcash? What Are Different Ways Of Investing In Zcash?

Now that users have understood the reasons to invest in Zcash, the following are the ways of investing in Zcash:

  • Exchanges: Cryptocurrency exchanges allow crypto buyers and sellers to trade Zcash (ZEC) directly. Exchanges are an excellent option for traders who expect low fees and high liquidity. Users have to create an account in such exchanges, deposit funds with crypto or fiat, and buy ZEC! 
  • Trading Platforms: Users can also invest in Zcash through trading platforms. Trading platforms or brokerages are suitable for beginners and provide great security as regulation is ensured. Regulated brokerages allow investment via fiat seamlessly. Users can trade without wallets if they trade through trading platforms. 

How To Invest In Zcash And Make Money

The channels of investing in Zcash have been made clear. Now it is time to understand the various ways of earning through Zcash. The following are ways to invest in Zcash and earn. 

  • Investing: Investing is the most common method of earning through Zcash. Investing is usually long-term, where investors HODL Zcash to buy at lower levels and sell at a higher level in the future. 
  • Trading: The next common method of earning through Zcash is day trading. The risks are higher in trading Zcash where users buy and sell it to make quick returns. 
  • Lending: Users can lend ZEC to receive rewards in terms of annualized interest rate. The best way to lend is through custodians who lend the money to borrowers and pay interest. 
  • Mining: Mining helps to add transactions to Zcash’s blockchain. Zcash uses a proof-of-work algorithm where miners compete to produce a new block. The first miner to succeed is rewarded with standard compensation and fees for transactions added to the block. 

How Risky/Volatile Is It – Can I Lose All My Money In Zcash?

Like every other investment, Zcash is also prone to risk. There are several ways users can lose all their money in Zcash, but users can control most factors. 

  1. Investing without proper research: Cryptocurrencies such as Zcash are challenging to predict, and if traders try to time the market, fortune may not always be in their favour. However, adequate research is always the best way to minimize losses and maximize risk. Therefore, Zcash users should not jump onto the bandwagon but depend on sound research to invest in Zcash. 
  2. Scams: Cryptocurrency scams cost Americans $80 million in less than a year. The high number of Zcash enthusiasts makes the sector a perfect breeding ground for scammers. Some offer investment tips; others pretend to be celebrities but end up scamming investors. However, Zcash investors should be careful to avoid interacting with suspicious individuals.
  3. Loss of password or passphrase key: Losing the password to one’s wallet can lead to losing Zcash permanently. Users should be very particular about noting and remembering the password of their Zcash wallets. 
  4. Cybersecurity incidents: As all Zcash transactions occur over the internet, hackers enjoy exploiting vulnerabilities despite security measures. Users should research before trading through exchanges. Trading Zcash in regulated businesses with adequate security measures will solve more than half the problem for users. 

The risks of investing in cryptocurrency can never be completely negated. However, by taking appropriate measures, Zcash users can minimize the risk and avoid losing all their money in Zcash.  

Things To Consider Before Investing In Zcash

Following are some essential things to consider before investors venture into Zcash investments:

  1. Zcash can be volatile: The short-term outlook will always be volatile for cryptocurrencies with peaks and troughs. Therefore, investors with a short-term timeframe will have to trade cautiously due to the volatility of cryptocurrencies.
  2. Zcash is private and secure: Zcash has decentralized features that help in privacy and security. It has zero-proof protocols that guarantee anonymity. Privacy issues faced while trading other cryptocurrencies do not exist with Zcash. 

Final Words

The cryptocurrency world has set high benchmarks with the launch of many crypto coins with various features. Zcash has the potential to surpass those benchmarks. Zcash has incredible privacy and security features that allow users to enjoy the utility of Bitcoin whilst protecting privacy. Zcash also gives users a view key that includes transactional data crucial for audits and regulations. Zcash is a good investment for its privacy and security and offers just enough volatility to be a great asset for investors and day traders. 

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