Zcash

What is Zcash?

Zcash is a proof-of-work cryptocurrency launched in 2016 with the same 21 million coin cap as Bitcoin. Its defining feature is optional shielded transactions that use zero-knowledge proofs to hide the sender, receiver and amount while still proving the transaction is valid.

What it’s used for

People use ZEC for payments and savings, choosing between transparent addresses that work like Bitcoin and shielded addresses that encrypt details. A meaningful share of all ZEC now sits in shielded pools, and wallets such as Zashi default to shielded use.

Role of the ZEC token:

Evidence of real use

• About 4.94 million ZEC, roughly 29% of supply, was held in shielded pools as of September 30, 2026. Source
• Network Upgrade 6 (NU6) activated with the November 2024 halving and directs 8% of the block subsidy to Zcash Community Grants and 12% to an in-protocol lockbox. Source

How Zcash works

Zcash is mined with proof-of-work using the Equihash algorithm, and like Bitcoin it has a 21 million coin cap with block rewards that halve roughly every four years. It supports two kinds of addresses. Transparent addresses show amounts and addresses on the public chain, just like Bitcoin. Shielded addresses keep those details encrypted, and you can move funds between the two.

Shielded transactions rely on zk-SNARKs, a type of zero-knowledge proof. In plain terms, your wallet produces a small mathematical proof that you own the coins and are not creating money out of thin air, without revealing who you are, who you are paying or how much. The newest shielded pool, Orchard, uses the Halo 2 proving system, which removed the need for the special "trusted setup" ceremony that earlier versions required.

Zcash also offers viewing keys, which let you share read-only access to your shielded transactions with an accountant, auditor or regulator. That selective disclosure is a key difference from all-or-nothing privacy designs. A portion of each block reward funds development: under the NU6 upgrade, 8% goes to Zcash Community Grants and 12% to a lockbox reserved for future use decided by the community.

Key moments

1. 2016Zcash launches on October 28, building on the academic Zerocash research.
2. 2018The Sapling upgrade makes shielded transactions much faster and lighter for wallets.
3. 2022NU5 introduces the Orchard shielded pool with Halo 2 proofs that need no trusted setup.
4. 2024The second halving and NU6 activate in November, creating the community lockbox.
5. 2026Roughly 29% of all ZEC is held in shielded pools by late September.

Supply

ZEC has a hard cap of 21 million coins, issued through mining with block rewards that halve about every four years. Currently 80% of the block subsidy goes to miners and 20% to development funding through Zcash Community Grants and the lockbox. There is no burn mechanism.

Risks to understand

• Privacy coins face exchange delistings in some regions; from July 10, 2027 the EU's AML Regulation bars regulated crypto service providers from handling anonymity-enhancing coins.
• Shielded transactions require supporting wallets, and some exchanges only allow transparent withdrawals.
• Mining hashpower is concentrated in a small number of pools.
• Complex cryptography carries implementation risk, as the 2018 Sprout bug showed.

Last reviewed October 4, 2026 by The Crypto Guide editorial team. Utility Lens ratings are editorial judgments, not investment advice. Market data from CoinGecko. Spot an error? Request a correction.