Zcash (ZEC) and Monero (XMR) are the most popular privacy-centric and anonymous cryptocurrencies in the market. Chronologically, Monero was introduced first as a hard fork of bytecoin in April 2014. Zcash, on the other hand, is ASIC resistant, a privacy-focused anonymous fork of Bitcoin itself commissioned in 2016.
Difference between respective algorithms and the transaction module
Monero uses stealth addresses and ring CT algorithm to provide complete privacy. Zcash uses zero-knowledge proof protocol, which verifies the truth of the statement without divulging any other details of the transaction. Furthermore, both the algorithms are equally comparable regarding performance.
However, with Zcash the user is given an option to send or receive funds through the ‘Z-address’ or the ‘t-address’. The ‘Z-addresses’ are designed to provide complete anonymity and privacy, whereas the ‘t-address’ works just like a Bitcoin public address. The percentage of people using shielded transaction is very low (less than 10%), this percentage discourages the use of Z-addresses further as suspicion is raised when one decides to use their Z-addresses.
Monero, on the other hand, provides completely fungible transactions as all the transactions are privacy-focused, and no transactions can be differentiated on the public ledger. It is the first choice for privacy-concerned individuals who are not comfortable with sharing their wealth details.
Monero and Zcash both have similar block times of around 2 minutes. Their performance as a cryptocurrency is comparable in terms of speed and scalability. The GPU miners around the world continuously shift between Zcash and Monero to maximise their profits. The block reward currently is four times that of Bitcoin 50 ZEC per 10 minutes; initially, no Zcash tokens were pre-mined or released in an ICO. The Block of Monero is around 17 coins per 10 minutes. This is responsible for the high rate of inflation in Zcash which we will discuss later.
Monero is developed by a private group of anonymous programmers, only two developers have revealed their identity. Riccardo Spagni (Twitter handle: @fluffypony) is one of them and is an active spokesperson for Monero. Spagni is a South African nationalist who was one of the pioneers of Bitcoin mining in the country, a software developer and an experienced export/import trader.
Zcash is developed by a team of developers led by Matthew Green from John Hopkins University. The CEO of the foundation in another experienced programmer Zooko Wilcox-O’Hearn from the US.
Monero comes ahead of Zcash in case of centralisation as 10% of the mining reward in the first four years of the Zcash blockchain (till 2020) will go to the founders, in what is termed as ‘founders reward’. This and the high initial rate of inflation on Zcash are some of the negative aspects of its economic model.
The difference in their Economic Model and the rate of Inflation
Inflation is an unavoidable necessity of modern economics. It is conceived as a demon because it decreases the purchasing power of people. However, it is also a sign of progress in the economy. An inflation rate of 2-3% is considered healthy for the economy of a country. The inflation rate for Monero is currently 4.1%, it is expected to be 2.8% by the beginning of 2020. The rate of inflation of Monero is decreasing exponentially ever since its release, and it is expected to reach a supply of 18.4 million in 2022 after which it will be released at a constant rate of 0.3 XMR/ minute. This is called as ‘tail emission’ which is expected to maintain a healthy inflation rate and die out eventually as we reach infinite time. ‘Infinite time’ in mathematics is a very long period, in financial years 150-200 years is considered long enough.
Zcash is entirely different when it comes to inflation, the rate of inflation was as high as 1% week in 2017. It is over 20% annually currently and is designed to decrease with time, and this high inflation rate has hurt the price since its inception.
Monero comes ahead of Zcash when it comes to privacy. Click To Tweet
Monero comes ahead of Zcash when it comes to privacy. The transaction sent on ‘Z-addresses’ requires a complex computational process involving 8 GB of RAM and is slightly time taking. The optional address features (z and t addresses) of Zcash; instead of being an advantage acts as a deterrent to not using private transactions, it is reflected by the low percentage of private transactions. Monero is more decentralised and has a stable and simple economic module as well.