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The purpose and history of Zcash

The purpose and history of Zcash

Zcash started as a fork of the Bitcoin protocol on October 28, 2016. However, the actual story of Zcash started in 2013 when the Zerocoin project was launched. The Zerocoin project was started by Matthew Green, Ian Miers, Christina Garman and Aviel D. Rubin, a group of researchers at the John Hopkins University Department of Computer Science.

Much like with Monero, this group of researchers identified problems with the completely public transaction log of the Bitcoin blockchain, where users’ privacy is protected only through the use of pseudonyms. These researchers did not like the idea of a system where every payment you send is permanently recorded for everybody to see, including how much you’ve sent, who you’ve sent it to and when you’ve sent it. Thus, in their paper, the group of people behind Zerocoin proposed a cryptographic extension to Bitcoin that augmented the protocol to allow for fully anonymous currency transactions. This original Zerocoin project was covered by the press as being an ‘add-on’ to Bitcoin and was heralded as a way to make truly private payments with Bitcoin. However, the technology behind Zerocoin was deemed too experimental, while Bitcoin had reached a point where it had to be conservative and move more slowly

Thus, in 2014, the original researchers behind Zerocoin started collaborating with researchers at MIT and Tel Aviv University. This collaboration eventually produced a coin which would no longer be an ‘add-on’ to the original Bitcoin, but instead would be a new full-fledged digital currency known as Zerocash. With a 98% reduction in proof sizes and improvements in privacy, the Zerocash blockchain was much more usable. Since Zerocash was more efficient and practical than Zerocoin, there was actual potential for the implementation of Zerocash as a cryptocurrency. The theory behind Zerocash was good, however implementing it was a different story. Production grade code, implementation and marketing required a whole team, so some more help was needed.

A complete team fully dedicated to the project would be needed, which also required funding and support. So somewhere later in 2014, the team that was now behind Zerocash started collaborating with the ‘Least Authority’ team, which was led by Zooko Wilcox. After these two teams met, things took off and the Zcash Company was born. From now on, the Zcash Company would take care of the development of Zcash. The reasoning behind this (which is quite different from the story behind many other cryptocurrencies) was that experimental technologies require rapid innovation, and a traditional startup was seen as the best way to bring the necessary agility and focus to the project.

Eventually, Zcash was released on the 28th of October 2016.

The development team and Zcash’s governance structure

The governance structure of Zcash is quite different from the governance structure of many other cryptocurrencies, and it is up to you to decide whether you like it or not.

At the moment the Zcash governance is relatively concentrated, as the Zcash company currently drives development, governance, operates essential Zcash infrastructure and even owns the Zcash trademark. The Zcash company mainly consists of researchers, engineers and advisors and is led by CEO Zooko Wilcox. As we’ve said earlier, this startup-like approach could be a great approach for an innovation that has to be agile and focused during its early days. However, as the Zcash protocol grows and matures, many believe that having a single leader and company can become more of a liability than a benefit, both in terms of incentives for the overall direction of the project and in terms of safety.

In part because the Zcash company recognizes the threat that they themselves pose, the Zcash Foundation was created in March 2017. If the Zcash project is to serve the public good, it is most appropriate for a non-profit foundation to take care of it and handle the interests of all the stakeholders that are involved. Thus, as the protocol matures and grows, stewardship responsibilities will transition over to the Zcash Foundation. The Zcash Foundation will receive 1.44 percent of the monetary base to fund its work and it is said that the Zcash company does not control the foundation’s personnel, funding or decision making.

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