As we’ve previously mentioned in our article on Monero, the high-flyers in the section of privacy coins are often found to be Dash, Zcash, PIVX and Verge. Out of these few privacy coins, Zcash and Monero are most often compared with each other. In this debate of Zcash vs. Monero, many argue that the debate essentially comes down to a debate between technology vs. community. It is often said that Zcash aims for more ambitious privacy guarantees while having a more structured and centralized leadership, while Monero focuses a bit less on the privacy technology but more on community, distributed governance and fairness. If you’ve also read the article on Monero, you will have noticed that from a governance perspective, these two coins have quite a contrasting approach and ideology.
Currently, the Zcash Company is effectively leading development of the science, the protocol and the reference client, as well as public communications and other important tasks. In the long run, the Zcash Foundation is expected to take over some of these roles, especially education, consumer protection, and the advancement of science.
As we’ve mentioned in the article on Monero, there are many contributors to the Monero project besides the Core team. There are active contributors to Monero Core, there is a Monero Research Lab, there are Community Contributors and there are other related software projects that people work on. Also, Monero did not make use of an ICO and did not have any initial funding for development. On the other hand, the developers have never revealed the amount of Monero they own.
Basically, it is up to you which elements of these coins and the people behind them you prefer and you could also of course go for one of the other high-flyers in the privacy coin scene!
The monetary base of Zcash is pretty similar to that of Bitcoin, in that there will be an eventual limit of 21 million Zcash units. However, there are some important differences. The first one being that the corporate development team (the Zcash Company) and the non-profit Zcash Foundation, are funded directly from the blockchain. 10% of the 21 million will be distributed as a ‘founder’s reward’ to the Zcash founders, investors, employees and advisors that were involved with the Zcash project from early on. 1.19% will go straight to the Zcash Company Strategic Reserve, and 1.44% will go to the Zcash Foundation. Together, the 10% serves to reward investors, hire developers, fund projects and raise awareness for Zcash.
During the first four years, 50 ZEC will be created every ten minutes (with a block reward of 12.5 coins every 2.5 minutes). From this, 80% of the newly created ZEC will go to the miners, while 20% of the ZEC will go to the Zcash company. If you’ve done your calculations correctly, you will have found that after these first four years, there will be 10.5 million ZEC in existence, of which 8.4 million will have gone to the miners and 2.1 million to the Zcash company. Since this 2.1 million is already 10% of the 21 million, the distribution of newly created ZEC to the Zcash company will stop from this moment on.
After these first four years, the rate of new ZEC creation will halve and will keep doing so every four years (just like in Bitcoin). So during these four years, there will be 25 ZEC created per 10 minutes, of which 100% will go to the miners.
The end results of this halving every four years is that there will ultimately be 21 million ZEC, and 2.1 million of that will have been distributed to the founders. The ‘founders reward’ system is quite different from the ICO model, which often raises funds even before the beta stages of a project. The aim of the ‘founders reward’ approach is that the Zcash Company and other people that were involved from early on will be and stay incentivized to support Zcash for the long haul (or at least for four years), and that they have limited ability to pump-and-dump the coin. Whether you like this economics and incentive structure is up to you!
As for the mining of Zcash, Zcash makes use of the Equihash proof-of-work algorithm, which offers multiple advantages over the SHA256 algorithm used by Bitcoin. It is an algorithm based on a generalization of the ‘Birthday Problem’ and designed such that the memory bandwidth is the bottleneck. The goal of this is to worsen the cost-performance trade-offs of designing custom ASIC implementations and to make mining as ASIC unfriendly as possible. Many believe that the monopolization of mining in currencies that are not ASIC-resistant is a bad thing, and that mining should be as democratic and decentralized as possible.