Introduction to Zcash

Zcash (ZEC) is a decentralized cryptocurrency that gives users the ability to make fully private transactions. Built on Bitcoin's proven codebase, it extends the original design with cutting-edge cryptography called zero-knowledge proofs — allowing the network to verify transactions are valid without revealing any of the private details.

This means you get the security and decentralization of Bitcoin, plus the option to keep your financial activity completely private. Zcash was launched in October 2016 by a team of scientists and engineers, and has since undergone multiple protocol upgrades to improve privacy, performance, and usability.

Unlike privacy coins that are "always on," Zcash offers a choice: you can make fully transparent transactions (visible to everyone, like Bitcoin), fully shielded transactions (private to everyone except the parties involved), or even move between the two. This flexibility makes Zcash compatible with regulatory requirements while still offering world-class privacy to those who need it.

On most blockchains, every transaction is permanently recorded in a public ledger. Anyone can trace the flow of funds, link addresses to identities, and build a complete picture of someone's financial life. This has real consequences:

• Businesses can have their payment flows, suppliers, and revenue analyzed by competitors.
• Individuals can be targeted based on their wealth or spending patterns.
• Employees paid in cryptocurrency have their salaries visible to anyone who knows their address.
• Every past transaction is permanently exposed — you cannot "close your bank statement" on a public chain.

Zcash's shielded transactions solve this by encrypting transaction data on the blockchain while still allowing the network to verify everything is valid. It's the difference between mailing a postcard (anyone in the chain can read it) and mailing a sealed letter (only the recipient can open it). Learn more in the Shielded Transactions & Privacy guide.

Zcash supports two fundamentally different transaction types. Understanding the difference is key to understanding Zcash:

You can also create mixed transactions that bridge between transparent and shielded pools. For example, you might receive ZEC at a transparent address and then "shield" it by sending it to a shielded address — after which the funds become private. The reverse process is called "deshielding."

On this explorer, each transaction is labeled with a type badge — Transparent, Shielded, Orchard, Mixed, or Coinbase — so you can see at a glance what kind of privacy the transaction uses.

Imagine you want to prove to someone that you know the combination to a safe, without revealing the combination itself. You could open the safe in front of them — they'd be convinced you know the code, but they'd learn nothing about what the code actually is. That's the essence of a zero-knowledge proof.

Zcash uses a specific type called zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge). Here's what each part means:

• Zero-Knowledge: The verifier learns nothing except that the statement is true.
• Succinct: The proof is tiny (a few hundred bytes) and can be verified in milliseconds — even though the underlying computation is complex.
• Non-Interactive: The prover generates the proof once; no back-and-forth conversation is needed.

In practice, when you send a shielded Zcash transaction, your wallet creates a zk-SNARK that proves: "I own the coins I'm spending, the amounts balance correctly, and no coins are being created or destroyed" — all without revealing which coins, which addresses, or what amounts are involved. Zcash has since evolved from zk-SNARKs to the Halo 2 proving system, which removes the need for a trusted setup ceremony entirely.

Zcash was built on Bitcoin's codebase, so the two share many fundamentals — but Zcash adds privacy technology and a development funding model that Bitcoin does not have.

These differences make Zcash a distinct cryptocurrency, not just a privacy layer on top of Bitcoin. The next guide dives deeper into how Zcash's privacy system actually works — the value pools where ZEC lives, the shielded transaction types, and the address formats you'll encounter on this explorer.