Since the end of September, the price of Zcash's ZEC token has increased 10-fold, and cryptocurrency social media is filled with various discussions about the resurgence of the privacy coin concept. Last week, the Winklevoss brothers launched their Zcash digital asset treasury reserve, aiming to accumulate at least 5% of the token's total supply.
While there is indeed some frenzy currently, don't entirely attribute the recent price surge to speculative mania. All this attention is prompting users to start utilizing the network's features – Zcash's privacy-protecting shielded pool currently holds nearly 29% of the circulating supply, up from 8.7% a year ago.
When buyers discover a token that combines clear utility value with profit potential, they often become staunch supporters – for privacy technology to develop while continuously facing challenges from governments, it may need a large number of such supporters.
Reasons for ZEC's Price Surge
Zcash was created in 2016 via a direct fork of Bitcoin, aiming to address the privacy vulnerabilities of digital gold. Like the Bitcoin protocol, Zcash uses a Proof-of-Work (POW) consensus mechanism, has a supply cap of 21 million coins, and follows a halving mechanism approximately every four years.
Each ZEC can be in a transparent or shielded state:
Transparent transactions work similarly to Bitcoin, where addresses and amounts are visible on-chain.
Shielded transactions use zero-knowledge proofs to hide the sender, receiver, and amount, while still allowing validators to confirm the transaction's validity.
Users can freely switch between these states.
As many have pointed out, there are multiple factors driving Zcash's rise. Its technology has indeed seen significant improvements, and privacy concerns within the crypto space and beyond are intensifying. Its parabolic price movement reflects these changes.
Its technical upgrades include:
Near Intents: Zcash has integrated with Near Intents, enabling ZEC to be used as a "circuit breaker." Users can convert "transparent blockchain" funds (ETH, SOL, etc.) to ZEC, shield the ZEC, and then bridge/swap back to the original chain – breaking the link between addresses.
Tachyon: A major performance upgrade comparable to Solana's Firedancer will be released next week, significantly improving network speed and scalability.
Zashi Wallet: Launched last year, Zashi simplifies the complex processes that previously hindered ordinary users from conducting secure transactions.
Growth in Protected Shielded Supply: As mentioned earlier, the amount of ZEC in the protected shielded pool has grown significantly over the past year, which helps improve the network's overall privacy and simultaneously exerts a kind of "deflationary" pressure on the token supply.
Despite all these developments progressing, we are also seeing the long-standing urgent need for privacy in the crypto space, reflected in the increase in on-chain activity and the general sentiment across the industry. Institutions are moving on-chain and need privacy to conduct transactions and remain competitive, turning privacy from a concept into a technical requirement.
As the overall cryptocurrency market trend weakens, it remains to be seen whether ZEC's upward momentum can be sustained. However, given that privacy issues continue to generate discussion in the tech world, ZEC remains a quality crypto asset worth watching.
