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CoinDesk1 min read
Zcash (ZEC) Isn't So Private? Arkham Reveals Ability to Track Transactions
TL;DR
New findings from Arkham reveal that over half of Zcash transactions can be linked to identifiable entities, challenging its reputation as a fully private cryptocurrency. Approximately $420 billion in ZEC transaction volume has been attributed to recognized organizations and individuals.
Key points
- Zcash introduced shielded transactions for privacy
- Arkham's findings reveal over half of Zcash transactions are identifiable
- $420 billion in ZEC transaction volume linked to organizations
Mentioned in this story
Arkham
The foundation of Zcash's identity is privacy. Zcash introduced shielded transactions, which completely hide the sender, recipient, and transaction amount, in contrast to Bitcoin, where every wallet movement is permanently visible on-chain.
Zcash has been researched deeply
However, new information from Arkham indicates that the situation is more nuanced than most users realize. More than half of all Zcash activity can already be identified and linked to recognized organizations, people, and entities, according to Arkham's findings.
Despite Zcash being promoted as one of the most sophisticated privacy-focused cryptocurrencies available, the platform says it has attributed about $420 billion worth of ZEC transaction volume.
The explanation is found in the way Zcash operates. The architecture of Zcash is still largely similar to that of Bitcoin. It relies on Proof-of-Work mining, has a 21 million supply cap, and employs the same UTXO transaction model.
The primary distinction stems from zk-SNARK technology, a zero-knowledge proof system that enables transaction verification without disclosing the underlying data to the public. But that privacy is not required.
Nature of Zcash's shielded transactions
Two address types are supported by Zcash: shielded z-addresses and transparent addresses, also referred to as t-addresses. Similar to Bitcoin, transactions between transparent addresses are still fully visible on-chain. Full cryptographic privacy is only attained by z-to-z transfers, in which the sender, recipient, and transaction amounts are hidden from the public.
Q&A
How much Zcash transaction volume has been identified by Arkham?
Arkham has attributed about $420 billion worth of Zcash transaction volume to identifiable entities.
What percentage of Zcash transactions can be linked to identifiable entities?
More than half of all Zcash activity can be identified and linked to recognized organizations and individuals.
How does Zcash's privacy compare to Bitcoin's?
Zcash offers shielded transactions that hide sender, recipient, and amount, whereas Bitcoin transactions are permanently visible on-chain.
