With Bitcoin anyone can see for example that "1F38k5Q3ob4X4rJtmzAER2Y6j94cU8EKW9 sent 0.0115627 BTC to 1NzLNxxU8Vo2urbGdarJjHCpLyv61JuHwD" (see for yourself: https://blockchain.info/tx/bf151762857db770a5a714afd974e1f46...). This is not really anonymous because first you see the amount being sent. Then you may be able to track who owns these addresses, eg. if someone posts his Bitcoin donation addresses to a website, or if a vendor sells something for a particular price like 17.958 BTC then you can scan the blockchain and look for all transactions of 17.958 BTC and you might be able to infer how many transactions that vendor made even if they used unique addresses for each sale.
All of this is not great. This is why we say Bitcoin is not anonymous, but "pseudonymous".
So Zcash fixes this by obfuscating all of this: sender, amount, recipient are just obfuscated blobs of data. You don't know how much was sent, from who, to whom, but you cryptographically know the transaction is valid (didn't try to send more coins than the recipient has, etc). This is verified through fancy so-called "zero-knowledge proofs". See https://blockchainhub.net/blog/infographics/zcash-explained/
Bitcoin, to which it is most similar, is the currency it tries to differentiate itself from, but it is not its main competitor, and it looks like it shares most of its flaws compared to its main competition, the dollar.
In terms of availability, the US government has facilities in place to produce more cash without breaking the economy, while there is a limit to how many Zcash coins can be produced. In fact, since people cannot transfer Zcash after their death, there is absolute certainty that Zcash has an expiration date.
In terms of volatility, Zcash shares Bitcoin's (and most traded commodities') flaw in that the value of assets held can fluctuate tremendously, making Zcash one of the riskiest currencies on the market. Even buying pounds is a safer investment. The dollar has, yet again, facilities in place to avoid huge swings in its value.
In terms of ease of use, Zcash requires complex maintenance, careful security practices, and computing power. The dollar has a whole banking industry in place, from paper money to debit cards to Apple and Android Pay. All of that makes storing and transacting painless, and not that expensive, all things considered.
In terms of energy consumption, well, yet again Bitcoin's flaws shine through.
Most people want to exchange money for goods and services lawfully, which means adhering to taxes and audits and ensuring that no money laundering takes place, so Zcash's anonymity is not a huge selling point.
Bitcoin had the benefit of being the first practical currency of its kind, which was enough to surpass its flaws. Do you believe Zcash will survive ten years?
Why does everyone always make the argument that because a cryptocurrency doesn't cover every possible use case for a currency that it will never be used.
Tell me how I can anonymously send $10,000 to another country with dollars?
That isn't my argument. Plan9 is technically fascinating and a few people use it, but it is a far cry from even Linux. It feels like Zcash will be the Plan9 of currencies — at best.
Sending $10,000 to another country should not be anonymous, to combat fraud and illegal activities. Many countries have laws about that kind of thing.
Do not underestimate how much a system like that is abused and that is where the problem is with not allowing anonymous transactions.
As much as I'd like to stop terrorism and activities that really are immoral to society as a whole, you can't circumvent the security of the people who are good because it's proven those systems become abused in ways that it was not originally intended.
Mixers often have limited anonymity sets, can sometimes be scams, are opt-in. We are seeing improvements in trustless mixers, but a fully anonymous currency is a very different beast.
zCash offers a level of anonymity beyond anything we have seen (Monero hasn't activated CT yet). Systems with similar properties as zCash ([see auditable eCash](http://www.cs.tau.ac.il/~amnon/Papers/ST.crypto99.pdf)) have been discussed since the late 90's, today marks the first time to my knowledge one has been deployed in production. This is a big deal. I'll raise a glass to the zCash team.
tl;dr zCash is a very impressive cryptographic achievement.
Exactly. Though I have seen ZCash stories on YC HN frequently, the commentaries of my peers have combined with my prejudicial biases to coalesce into the opinion that ZCash will not be a significant part of future commerce, and there is no advantage to me in buying into it now, while it is in the ground floor.
At this point, in order for me to pay attention to any crypto-currency other than Bitcoin, it would have to allow for more than just one of the following:
- buy black-market without getting pinched, more easily than paper money
- pay bills with a verifiable proof of payment, more easily than checks
- buy from untrusted parties, more easily than credit cards
- save at lesser risk of theft than cash in the mattress
- save at lesser risk of confiscation/forfeiture than money in the bank
- save at lesser risk of market volatility than Bitcoin alone
- allow anyone to issue barter scrip
- facilitate trade-chain settlements and redemptions of barter scrips
- allow both anonymous transactions and provable-identity transactions
- facilitate honest trade while crippling scammers
- stable decentralization, such that N% attacks are impossible
- built like a pile of bricks, instead of a house of cards
- no excessive pre-mining or front-loading
- if not future-proof, at least future-resistant
So far, the only thing Bitcoin really has going for it is that it got to the mountaintop first. But since no other alt-coin has proven to be superior in more than one or two of the ways that matter to the users, none have yet displaced even it, and never mind surpassing any of the traditional currencies.
And I think none of the schemes set up to reward those investing in the costs of development will succeed. In the end, a currency has to be a commodity, and you can't charge much more as seigniorage on a commodity currency than the actual cost of operating the mint, unless you have a monopoly. Otherwise, you're better off running the power plant than the data center packed with ASICs.
