What is Monero (XMR)?
Monero (XMR) is an open-source decentralized cryptocurrency that guarantees its clients with complete transaction privacy and protection of personal data. Thanks to this, XRM fell in love with many users, but government authorities, on the contrary, disliked such concealment of information.
The fact is that only participants of transactions in the Monero network and those who will be given a special key know the amount of coins, sender and recipient addresses.
Monero was launched in 2014 based on the CryptoNote protocol, aiming to fix some of the Bitcoin shortcomings, such as the lack of transaction privacy and the ability to mine with ASICs. CryptoNote solves these tasks successfully using cryptographic schemes, developed by professional cryptographers. And it’s really impressive!
In order to eliminate the need for a biennial update, in December 2019 the CryptoNote protocol was replaced with RandomX.
Another curious fact is that almost all Monero developers use aliases. It is not yet clear whether they are showing either extraordinary modesty, or they are just real admirers of privacy, which they passed on to their digital brainchild. By now only two of them have revealed their identities: Ricardo “Fluffypony” Spagni and Francisco Cabanas.
By the way, in terms of the number of developers, Monero is in third place after Bitcoin and Ethereum, although only a few of them write code on an ongoing basis.
What is Zcash (ZEC)?
ZCash, or earlier Zerocoin, is two years younger than its rival Monero. Its developers also did not approve the transparency of transactions and their visibility to everyone, inherent in the Bitcoin network. This is why in 2016 Zooko Wilcox created the blockchain that allows people to send and receive funds truly anonymously.
In fact, the blockchain only shows the time and date of the transaction, hiding all other information from the eyes of users! In addition, transactions are processed quickly and with the lowest commission that will not exceed a few cents! Such advantages make it an excellent alternative to traditional banks or services like Western Union, which, although they provide a service of fast transfers, take a rather large commission for it. So it comes as no surprise why the Zcash team hopes that someday they will manage to become a global payment system that will be used by people around the world.
In particular, given the fact that today this crypt already has many influential fans like Edward Snowden and Roger Ver who are in the tank for Zcash, we can conclude that it, at least, has a bright future.
Zcash vs. Monero Privacy
Well, as we have seen, both Monero and Zcash advocate for the privacy of their clients, using the latest technology and the skills of the best cryptographers. But will you just trust someone who will promise you to keep your anonymity, or do you want to figure out for yourself how this is possible? If you, like me, need guarantees and proof of data safety, let’s figure out how Monero and Zcash provide their clients with a high level of confidentiality, and who wins this race.
At the heart of Zcash is the Zerocash protocol, which uses zk-SNARK (zero-knowledge Succinct Non-interactive ARgument of Knowledge) technology, a zero-knowledge proof that we’ll talk about later. This is what allows transactions to remain anonymous.
Let’s take a look at examples of what transparent Bitcoin transactions and Zcash private transactions look like:
Bitcoin Transaction: Wallet DEF394 Sent 2.4 BTC to Wallet GHI561 at 11:00 on April 1st, 2020
As soon as the block is confirmed, this information is sent to the public blockchain, which can be seen by anyone. And not only this, having learned the address of the wallet, you will be able to track every transaction associated with it. Even information about the balance of the wallet will be available to everyone. Agree, this is not very pleasant if you look for privacy.
ZCash Private Transaction: Wallet XXXXXX sent X.X ZEC to wallet XXXXXX at 13:00 on April 1st, 2020
As you can see, the only information available for the public blockchain is the date and time of the transaction. However, Zcash offers its users two types of transactions: shielded (private) transactions, which use zk-SNARK technology, and transparent transactions, which practically do not differ from those on the Bitcoin network. In addition, the number of offered shielded transactions is negligible compared to transparent ones (only 6% are fully shielded and 15% partially), and even private transactions can be disclosed when necessary, for example, for audit purposes or for any regulatory reason.
With Monero, the situation is different, since with it you can be sure that all your transactions are 100% confidential. The project currently implements a unique PoW consensus algorithm called RandomX, CryptoNote code and a number of the latest technologies possible thanks to the same code: Stealth-Addresses, Ring Signatures and RING CT. It is not for nothing that it is often called the most cypherpunk-ish crypto project.
Of course, due to its properties that provide its clients with super-privacy, Monero is often used in illegal business, such as money laundering. As a result, this makes it difficult for Monero to comply with most of the regulatory requirements, making it difficult to list on exchanges.
Most likely, the regulatory authorities will not stand on the sidelines for long, and sooner or later they will take on the fans of anonymous transactions. But until this happens, you can be sure that the turnover of your digital assets is hidden from prying eyes.
Zcash vs. Monero Cryptography
Now let’s talk about the most interesting, but at the same time, the most complex technical part of both projects. This will help you understand how the blockchain manages to keep your online activity secret when it comes to sending/receiving XMR or ZEC.
As mentioned earlier, Zcash is based on zk-SNARK, a Zero-Knowledge Proof technology created back in the 1980s by three scientists at MIT. Zero-Knowledge Proof is a cryptographic protocol that allows one party (the prover) to confirm the truth of an assertion to the other party (verifier), without revealing in the process any additional information about that other party (neither the content nor the source from which the prover learned about truthfulness).
I agree, this sounds a little intricate and implausible, because how can you prove something without revealing the information that seems necessary for this?
The following example will show you how this technology works.
Imagine that you are blindfolded, and someone named James claims that he has two balls of different colors: red and blue. He gives them to you, but you cannot know if they are of the same color. To check if James is telling the truth, you take the balls behind your back, shuffle them and show James one of them, for example, blue. Then you hide it behind your back and switch them or not again. You know which ball was shown to James, and this time ask him to point to it. James points to a blue ball and it turns out to be the right choice.
Of course, the odds are 50/50 and James could just guess the ball. But there is nothing to stop you from doing this trick over and over again to make sure the balls are actually different colors. In this example, you play the role of the verifier, and James is the prover.
Being 100% private, Monero is practically unmatched in cryptography. Consider the following encryption technologies that are successfully applied in its blockchain.
Stealth-Addresses. Users of almost all cryptocurrencies are provided with one key pair to manage their crypto assets. They are usually private and public. However, XRM holders will receive one-time keys for every single transaction. Thus, the transaction will not be tied to either the sender’s wallet or the recipient’s wallet. And it will be impossible to determine whether the coins were sent from one or more senders. This is very convenient, especially if you are a private entrepreneur.
Ring signatures. In cryptography, a “ring signature” allows a member of a list of signers to anonymously sign a message without revealing their identity. For an analogue, you can consider a joint bank account, where checks can be signed by all of its owners (family members or company directors), using one signature for all, and therefore the signatory in each case remains unknown.
Ring signatures in Monero include mixins (decoys) in the transaction in the form of inputs / outputs of other people’s transactions, made earlier. They help obfuscate the traces: it is impossible to determine exactly where the “mixins” are in the transaction, and where the real funds are. It’s as if five people, including you, created a unique signature, where each would add something of their own.
Ring CT (Confidential Transactions). This technology helps to hide the value of the actual transaction without the need to split them according to the mixing principle. This protocol became mandatory on the Monero network in September 2017.
Comparison table of Zcash and Monero
|Protocol||A fork of the Bitcoin protocol||Based on the CryptoNote protocol|
|Total Supply||21 million||18.4 million XRM. After they are mined 0.3 XRM/min will be emitted constantly|
|Privacy||Transactions can either be private or transparent||Transactions are fully private|
|Cryptography||zk-SNARKs||Ring Transactions, Stealth addresses, Ring confidential transactions|
Where to Store Zcash and Monero
So, you have familiarized yourself with the features of the super advanced digital creations of the best cryptographers, and realized that you want to acquire ZEC or XRM currencies. But before you rush to the exchange to buy a particular currency, you should acquire a place to store it.
First, the main criteria for choosing any wallet are usability and security.
If you prefer to use a mobile or desktop wallet, it is best to pay attention to the official wallets that both Zcash and Monero have.
Official Zcash Wallet
If you go to the official Zcash website, you can choose the most acceptable option for yourself, however, to store a large number of coins, it is better to install a cold local Zcash wallet.
Official offline wallet is the most reliable and secure way to store cryptocurrency. Initially, it was created by developers only for the Linux platform (1.0-User-Guide), but over time, the community has adapted it to other operating systems MacOSX (Zcash4mac) and Windows (Zcash4Win).
When the wallet is installed, a copy of the blockchain is downloaded to the computer, and some users note that the Zcash4Win wallet is quite heavy on the processor and memory. Therefore, to avoid file corruption, it is recommended that you close it when you stop using it, and do not leave it open when starting other systems.
Fortunately, there is a light version of ZecWallet.co that does not require downloading the blockchain and the Wallet is synchronized in a matter of seconds. It is suitable for Windows, macOS and Linux OS, as well as mobile devices on Android and iOS.
Official Monero Wallets
To be honest, wallets from Monero are more pleasing in functionality and variety.
One of the most beloved wallets among the Monero community is MyMonero. Its desktop version works with major operating systems such as macOS, Windows, and Linux, while the mobile version is only for iOS devices.
For Android devices there is Monerujo Wallet. It is very light and has a built-in QR code scanner
Desktop Monero GUI Wallet on the official website of the project. Unlike the Zcash wallet, Monero offers two options: creating a full node, with a copy of the entire XMR blockchain on your hard drive, or working with a remote server. In addition, the local Monero gui wallet allows you to mine XMR cryptocurrency on the CPU.
After launching the wallet, be sure to save the address and private keys of the XMR wallet in a safe place.
- Secret view key – designed to monitor incoming transactions;
- Public view key – designed to generate a hidden address;
- Secret spend key – required to sign outgoing transactions (keep it secret, like mnemonics);
- Public spend key – available to network nodes to process outgoing transactions. It is used to check the validity of a one-time key, which is automatically generated when money is sent from your wallet.
Please note that connecting to a remote node eliminates the need to download the entire blockchain, but reduces the security of transactions.
While hot wallets are convenient if you are an active trader, cold wallets are better for storing large amounts of ZEC or XRM. Moreover, you can go further and store them directly on exchanges like Coinomi or Coinbase to keep your finger on the pulse of the cryptocurrency exchange rate, but this is perhaps the most insecure place.
For example, both Zcash and Moreno can be stored on hardware wallets: the Ledger Nano X, Ledger Nano S, and Trezor.
Alternatively, paper wallets can be used. They are less functional, but completely free. ZecPaperWallet is suitable for ZEC crypto, and XRM can be placed in Monero Paper Wallet.
Where to Buy Zcash and Monero
You can buy both MXR and ZEC on almost any major exchange for fiat currency or crypto. When choosing an exchange, pay attention to its reputation, the commission it takes for its services and course. Exchanges and services such as Coinomi, Kraken, eToro, Godex.ie, and the like have proven themselves well.
Zcash vs Monero: Conclusion
It’s safe to say that both Monero and Zcash are amazing projects, especially in terms of cryptography. If complete privacy in your crypto activity on the network is important to you, Monero is perhaps more suitable for you. If it is important for you to be confident that the project in which you are investing will actively develop – ZCash seems to be more focused on research and development. Take the fact that Moreno mainly relies on volunteer developers and donations, while ZCash effectively funds its development budget, taking about 20% of the miners’ rewards.
By the way, if you are considering Monero or Zcash mining, you should know that both blockchains are resistant to ASIC mining, which makes mining affordable, provides protection against over-centralization, and maintains network ramification. The time it takes to add a new block to the Zcash blockchain is around 2.5 minutes. Monero’s blocking time is two minutes, which is slightly faster than Zcash. It is not very easy to compare ZEC and XMR in terms of mining, but in general, mining ZCash on video cards is more profitable. Therefore, this currency is better if you are going to mine on the GPU.
One way or another, no matter what you choose, in this case, the ball trick will not help, and only time will tell if it is correct.
Start a Cryptocurrency exchange
Try our crypto exchange platform
Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.