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Zcash as a New Investment Asset

Zcash
Credit: Flickr / QuoteInspector

Compared to other cryptocurrencies and investment assets, Zcash (ZEC) is still relatively new, making some investors wonder whether they should buy Zcash or not. 

Take a Closer Look

Zcash makes use of zk-SNARKs, which are zero-knowledge proof constructions that let two users participate in an exchange of information without having to reveal identities. The cryptocurrency does still include a public ledger, but it only displays the occurrence of a transfer.

However, it is important for you to keep in mind that Zcash does not deliver privacy and anonymity by default. Instead, it delivers the option of hiding your transaction data so it does not appear on the public ledger. It is even possible that those who choose not to make their transactions private on Zcash can unintentionally make it easier to track those who do opt for privacy. 

How It Differs from Bitcoin

To better understand Zcash, it can help to take a closer look at how it compares to Bitcoin, as that is the cryptocurrency that most people are familiar with. Developers built Zcash’s infrastructure by enhancing Bitcoin’s underlying code, adding the zero-knowledge proofs, updating its proof-of-work consensus model, and making other minor changes. The result is that Bitcoin and Zcash operate incredibly similarly but with the latter delivering more privacy. Bitcoin always records the transaction details mentioned above, including the amount, sender, and receiver, while Zcash offers the option to hide this information. Both blockchains always record that a transaction occurred, however. 

Some Say Zcash Has a Huge Potential

Investors have already begun looking at Zcash as another smart investment opportunity in the world of cryptocurrency. Grayscale Investments, for instance, released their investment thesis regarding Zcash earlier this year, and it includes a dramatic possibility of the Zcash price skyrocketing. Fortune provided a nice, succinct summary of the thesis by Matthew Beck, which relies on financial modeling to project a sharp rise in Zcash value. 

In January, when the report came out, Zcash was at just under $400. The report said that by 2025, this figure could be over $60,000. This prediction assumes that Zcash will represent 1 percent of offshore wealth by this point in time. It also comes with a large disclaimer that there is no guarantee or representation that Zcash will or even is likely to achieve that high value. 
Although this proposition seems incredible, Grayscale does provide several reasons within the report to back up the prediction. These include:

  • Since Zcash is similar to Bitcoin, it can take advantage of the features that Bitcoin already got right; 
  • Because of its built-in privacy opportunities, Zcash has the potential to act as an offshore investment. Grayscale sees it as something like a Swiss bank account but accessible digitally and, therefore, globally; 
  • Zcash has fungibility, meaning that all Zcash tokens get traded like the others with no knowledge of that particular token’s past; 
  • The team behind Zcash has expertise; 
  • Zcash has global trade potential; 
  • Zcash has partnered with J.P. Morgan Chase. 

While many others do share the idea that Zcash has a great deal of potential, most predictions do not reach the same extremely high value as this one from Grayscale. 

Other Zcash Predictions

A quick online search can show you many other predictions for Zcash, almost all of which are significantly more conservative. For example, the Economy Forecast Agency predicts a high of $109 within 2019, up to $234 in 2020, $411 in 2021, and $428 in 2022. While some of those predictions are significantly higher than the current value of Zcash, they are nowhere near the $60,000 prediction from Grayscale. 

Placing Zcash in the Market Rankings

Those who consider investing in Zcash should take the time to see how it fits into the larger picture of cryptocurrency. Zcash experienced a similar drop in value to that of Bitcoin in the first part of this year. While its value in January was about $400, CoinMarketCap lists it at $134.29 at the time of writing. According to that same website, there is a circulating supply of 4,573,606 ZEC, a market cap of $594,956,648, and a 24-hour volume of $98,560,215. Zcash is at the rank of 19. 

How to Invest in Zcash

Those who decide they do want to invest in Zcash will have several methods of doing so, although not as many as with more popular cryptocurrencies, like Bitcoin or Ethereum. The simplest method of investing in Zcash is via a cryptocurrency exchange. If you already have Ethereum or Bitcoin, you can use a crypto-to-crypto exchange to purchase ZEC using BTC or ETH. 

If you do not currently have crypto assets or do not want to use them to buy Zcash, you can also use a fiat-to-crypto exchange. Most of the major exchanges have support for Zcash. Just confirm that your chosen exchange supports it before depositing funds and that you can use the currency you wish to pay with. 

One of the most user-friendly methods of buying Zcash is doing so with a credit card. This option is hardly available at many exchanges, though it is possible with CEX.IO. The exchange has a proven track record in the cryptocurrency space and is a go-to platform for both beginners and regular traders. Buying Zcash with a credit card at CEX.IO is easy and will only require a few steps - registering, ID verification, card validation and actually purchasing itself. Once you buy the coins, you can transfer them to your own wallet or safely store Zcash on the exchange as it offers a cold storage option for the users’ crypto funds.

Conclusion

Zcash follows the basic structure and technology of Bitcoin but enhances the blockchain with added privacy. Thanks to the option to hide information regarding amount sent and the parties in a transaction, many experts predict that Zcash will experience an increase in value in the future. One crypto fund even predicts that Zcash has the potential to become something like offshore holdings for the cryptocurrency world because of its built-in privacy. If this prediction holds true, the value of Zcash could soar extremely high, but you should not count on the results that are too dramatic. Although the predicted values vary, most experts agree that Zcash can be a sound investment asset to add to your portfolio, particularly among other cryptocurrency investments. 
 

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