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

Token Listing Guidelines for Binance DEX

On Thursday (April 25), Binance unveiled guidelines for listing tokens on Binance DEX, its new decentralized exchange, and said that these guidelines would enable Binance DEX "to facilitate a larger number of crowd-vetted projects, hopefully listing 10x more tokens than currently listed on Binance.com."

Despite what some people think, issuing a token on Binance Chain does not mean that the new token will automatically get listed on Binance DEX. Binance, which has been criticized like most other centralized exchanges for having an opaque listing process, is hoping that the new "transparent and community-driven" listing process for Binance DEX will finally satisfy most if not all of its detractors.

The Binance DEX listing process consists of the following steps:

  • 1. Proposal
    • "It is recommended that Token Issuers first create a thread under the “Token Issuance & Listings” category in the Binance Chain Community Forum."
    • "It is recommended that this public thread contain full answers to the Binance DEX Token Listing Submission Criteria..."
    • "Token Issuers must initiate an on-chain Proposal Request (fee of 10 BNB) to list a trading pair for a token."
    • "Token Issuers must request BNB as the quote asset for their first trading pair. For example, ABC/BNB."
    • "Once the proposal request is submitted, Token Issuers must post the Proposal ID to their proposal thread in the forum as a ‘reply’."
  • 2. Deposit
    • "Once the proposal request is sent, Token Issuers will need to deposit at least 1,000 BNB within 2 days."
    • "Proposals that do not receive sufficient deposits within this timeframe will not be able to move on to the voting stage and their deposit will not be refunded."
    • "If the Vote passes in Step 3 (majority 'Yes'), the 1,000 BNB deposit will be refunded."
  • 3. Vote
    • "At least half of the voting power is required to vote 'Yes' for the proposal to be accepted."
    • "Binance Chain Validators can vote for either 'Yes', 'No', 'NoWithVeto', or 'Abstain' within the time period specified in the proposal request."
    • "The 1,000 BNB deposit will be refunded if the majority of Validators vote for 'Abstain'."
    • "Proposals are denied if one third of the Validators vote 'NoWithVeto' or if half of the Validators vote 'No'."
    • "Denied proposals will lose all the funds deposited, however this result will only occur in rare circumstances when there is relatively clear fraud, scam or spam."
  • 4. List
    • "If the vote is passed, the Token Issuer will need to initiate a 'List' transaction on-chain (2,000 BNB fee) within the timeframe specified in the proposal, while the previous 1,000 BNB deposit will be refunded back to the proposing user."
    • "The trading pairs will be live immediately after this request is completed."

Binance DEX Listing Process Workflow Screenshot.png

Binance says that the "listing application, project information, vote results and all community interaction will be public on the Binance Chain Community Forum," that the decisions of the Binance Chain Validators (who are the only ones with the power to vote) are "purely based on public information in the forum," and that there is no other way "for projects to contact Binance Chain Validators."

One interesting thing to point out is that although the Binance DEX listing fee has been set to 2,000 BNB (currently, according to CryptoCompare, worth around $45,580), originally Binance CEO Changpeng Zhao (aka "CZ") was thinking of making the listing fee on Binance DEX be around $100,000, as he mentioned in his first Ask Me Anything (AMA) session on February 7:

"There will be a listing fee on the DEX. I actually deliberately want to set that a little bit high, just so we reduce the number of spam or scam projects. And there’s also a voting process by the validators to be listed on the DEX. So there’s a fee, I think the fee will be probably close to $100K US, so we’ll see. But the fee is adjustable over time, it’s quite easy to change."

Earlier today, Mithril, the first crypto project to migrate its token (MITH) to Binance Chain, got listed on Binance DEX:

 

All Images Courtesy of Binance