Zcash (ZEC) vs Monero (XMR): Which Coin is More Secure & More Private?

Privacy-oriented cryptocurrencies have been increasingly adopted as they allow users to transfer funds without revealing too much about the origin (sender) of the transaction or their personal (identification) information. Monero (XMR) and Zcash (ZEC) are among the leading privacy coins - not only in terms of market capitalization, but also as far as their adoption is concerned. In this article, we’ll carefully compare and contrast these two cryptos.

XMR: Untraceable Payments, "Unlinkable Transactions", Resistant To "Blockchain Analysis"

Monero (XMR) is an open-source, decentralized digital currency which was launched in April of 2014. It aims to be “a digital means of exchange with untraceable payments, unlinkable transactions, and it is resistant to blockchain analysis.” This is achieved using Monero’s proof-of-work (PoW) algorithm - which is called CryptoNight.

CryptoNight was created by the CryptoNote project - which uses ring signatures and stealth addresses. These two features make it difficult to accurately identify and track the origin (sender) of transactions. In addition, Monero’s CryptoNight consensus mechanism is considered to be very secure and allows users to maintain the highest level of privacy (when compared to other privacy coins).

Unlike many other altcoins, XMR coins are not associated with the fund holder’s public crypto address. So, if a user shares their public address with anyone, the address itself will not reveal the amount of funds that the user is holding.

Monero (XMR) Market Cap Drops From $3.7 Billion To $1 Billion 

Moreover, the Monero platform does not have a block size limit and it may be (adjusted) increased according to its network requirements at a particular time. Because of this dynamic block size, the Monero blockchain can potentially process 1,000 transactions per second (TPS) - assuming that its network participants are using proper hardware and the latest client software.

In April of 2018, the market capitalization of XMR coins was $3.7 billion and has now dropped considerably to around $1 billion at the time of writing, according to CryptoCompare data. However, this is likely due to the overall decline in the market of cap of almost all major cryptoassets.

Zcash (ZEC) is another fully open-source digital currency platform that was launched in 2016, however, many in the crypto community do not think it is completely decentralized. Similar to Monero, Zcash transactions are considered highly secure and maintain user privacy.

ZCash Network Uses Fungible Tokens/Coins

The Zcash platform was developed by some members of the Zerocoin project - which is an initiative that aims to improve the anonymity of bitcoin (BTC) transactions (and is built off of the Bitcoin Core codebase). Total supply of ZEC coins has been capped at 21 million.

One of the main (proposed) use cases for ZEC was to develop a fungible cryptocurrency. These types of coins are interchangeable, meaning that ZEC coins can serve as a replacement for other crypto tokens and coins. Transactions with fungible cryptos are more difficult to track - which makes it harder to identify the sender and recipient of funds.

Both Zcash and Monero use the proof-of-work (PoW) consensus mechanism, however, there are fundamental differences between how both platforms have implemented their respective network management protocols. Transaction data for XMR coins is “mixed” with others, while transfers involving ZEC aim to eliminate traces of transaction data.

Zcash Does Not Offer Privacy By Default

The main difference between Zcash and Monero is that the former is not private by default, so as soon as a Zcash miner discovers a block, the ZEC coins associated with that block are sent to the corresponding private Zaddress. Moreover, Zcash uses fixed 2 MB block sizes with 2.5 minute intervals between consecutive blocks - which is basically equivalent to a (hypothetical) 8 MB block size for bitcoin (BTC) with 10 minute intervals between blocks.

What this means is that (theoretically), the Zcash network can handle 8x as many transactions per second than the Bitcoin blockchain - which is about 50-65 TPS.

Compared to Monero, Zcash transactions are usually less expensive. Notably, in April of 2018, the market capitalization of ZEC coins was of about $1 billion and has now dropped significantly to around $440 million

The Swiss Warm to Crypto Investments

The Swiss are shifting more focus to cryptocurrency investments. This is according to a survey taken on behalf of Migros Bank, which revealed that a growing proportion of Swiss residents are invested or actively looking to invest in cryptocurrencies.

The survey which was conducted by market research institute Intervista showed that 7% of savers between the age of 18-55 already hold cryptocurrencies such as ether and bitcoin. Even more encouraging was the finding that 7% of those aged between 30 and 55 plan to extend their crypto portfolios in the future.

Unsurprisingly, the survey found younger participants to be the most bullish on the long term prospect of crypto. According to 13%, aged between 18 and 29, cryptocurrencies will become more "important" in the future.

Less extraordinary were the results of the older generation. Per the survey, respondents aged over 55 were much less likely to own cryptocurrencies, and only 0.5% thought that it was a worthwhile long term investment. 

Switzerland Ups the Ante on Crypto Regs

This uptick in demand for cryptocurrency comes just after Switzerland imposes more stringent crypto regulations. 

Jumping off recommendations issued within both the Financial Action Task Force (FATF) guidance and the EU's 5th anti-money laundering directive (5AMLD), the Swiss Financial Market Supervisory Authority, or FINMA, recently opted to tighten their travel rule.

The rule, which requires crypto firms to disclose customer information for transfers above $1,000, was initially set by FINMA at a threshold of $5,000 (5,000 CHF) but has since lessened to just $1,000 per the FATF and 5AMLD directives. 

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