Zcash Price Jumps 29% After Devs Announce Shift to Proof-of-Stake
Zcash maintainer Electric Coin Company is releasing an official wallet.
Zcash will be moving to a proof-of-stake consensus mechanism over the next three years.
ECC is also thinking of adding Zcash to the Cosmos stack.
Yesterday, Electric Coin Company, the organization behind privacy coin Zcash, outlined its official roadmap for the next three years. Within hours, the price of Zcash rallied from $147 to $189, an increase of 28.6%.
The privacy-focused organization said in a blog post that it’ll release an official ECC wallet in 2022, before moving Zcash from a proof-of-work consensus mechanism to the more environmentally friendly proof-of-stake model within the next three years.
Electric Coin Company says it wants Zcash to be a key player in the emergence of Web 3.0–a vision where data is interconnected in a fully decentralized way, giving each user their own sovereign slice of the web.
In society’s collective vision of the coming decentralized web, people will have total control over their information; the ECC believes that privacy will be a big part of the fabric of this next iteration.
Privacy coins: a primer
Zcash and its main rival, Monero, are examples of privacy coins. Using cryptographic techniques, they obscure identifying information like addresses and transaction amounts from prying eyes.
The coin uses a cryptographic technique called zero-knowledge proofs, which lets you make transactions without specifying any details about the transactions in question, other than the fact that they are legitimate. While Monero only allows for private transactions, Zcash also allows for public ones.
Zcash launched on October 28, 2016, two years after Monero. It was originally based on Bitcoin’s codebase and, like Bitcoin, its supply is capped at 21 million coins. Today Zcash has a market cap of around $2.3 billion, about $2 billion less than Monero.
A day after it launched, Zcash hit an all-time high of $5941, though since then its price has been in decline. It hit a brief high of $880 on July 1, 2018 but spent most of the next two years trading well under $100.
Things picked up again this year. In mid-February, the price of Zcash hit $180 and it hasn’t fallen below $100 since. On May 8, it set a yearly high of $318 and slinked back down again, but news of ECC’s new roadmap has caused the price to rally this weekend.
The ECC Roadmap
In the blog post, ECC said that the first step of its roadmap will be the release of an official wallet in 2022. Through the wallet, the company can interact with Zcash users directly, allowing ECC to “rapidly rollout new features that may or may not require changes to the protocol.”
ECC also announced that the code for the official wallet will be open-source and that wallet developers can expect the release of a software development kit in the future.
ECC is also migrating the blockchain from an energy-intensive proof-of-work consensus mechanism, where miners that have the most computing power validate the most transactions, to a proof-of-stake model, where miners that stake the most Zcash validate the most transactions.
The transition to proof-of-stake will reduce Zcash’s carbon footprint and, hopes ECC, reduce the downward price pressure on Zcash. At the moment, most miners immediately liquidate their Zcash earnings to pay the high energy bills that come with proof-of-work mining. With proof-of-stake, they won’t have to.
The last part of ECC’s roadmap focuses on interoperability. As the company completes the transition to a proof-of-stake model, new opportunities for cross-chain interoperability will arise, like using interoperability network Cosmos.
Clearly, ECC hopes Zcash will outgrow its reputation as a privacy coin as more utility gets added to it in the coming years.