Cryptocurrencies have risen over the past few years due to a number of factors, especially the promise of privacy and anonymity. A host of the digital coins in the crypto industry were created to enable their users hide their identities and transactions that would otherwise be used to reveal their true selves.
Considering the ever-increasing concerns over the anonymity capacities of cryptocurrencies like Bitcoin, crypto investors have begun looking in the direction of new options. One such alternative is Zcash (ZEC), which describes itself as the “https alternative when Bitcoin represents the http for financial transactions”.
This definition goes to highlight ZEC’s advanced security and privacy features that’s demanded by many users. In the technical sense, Zcash utilizes a cryptographic tool known as Zero-Knowledge Proof, and provides users the choice of shielding transactions.
The coin allows users to engage transactions without the need to expose their addresses to other participants – including the fact that Zero-Knowledge Proof hides all transaction amounts.
Having had that introduction – do you think that Zcash transactions are untraceable?
Well, a study into the traceability of the crypto industry’s most-beloved privacy coins has concluded that more than 99% of Zcash users lack a firm understanding of the protocol’s privacy features – an aspect that seriously presents traceability issues as far as ZEC transactions are concerned.
A research team from the Carnegie Mellon University conducted a study that reported on the privacy features of the two most popular privacy coins – Zcash and Monero (XMR).
The basis of the study was pegged on the premise that the many altcoins produced in the recent years have boasted of providing robust privacy features, marketing themselves as virtually untraceable. The paper sought to establish the legitimacy of these claims in a bid to clarify the longstanding user concerns about the traceability of their crypto transactions.
In particular, the researchers studied the known competitors in the privacy-centric niche of the crypto industry to ascertain the claims. The study’s approach looked into the traceability of the coins following their most recent security updates and judged the truth in their marketing as far as the guarantee of user privacy is concerned.
The traceability experiments relied on the data provided by previously published papers for each privacy asset.
The results of the study showed a strong correlation between the implementation of tough security and anonymity protocols into the crypto system and the lack of traceability of digital assets as in the context of Monero.
Conversely, Zcash appears to falter in creating changes that target the alteration of user behavior. Although the privacy-centric coin had strict cryptographic features, Zcash transactions proved to be much more traceable. It was inferred that this problem was caused by more than 99% of the coin’s users who seemed to undermine the privacy of the entire network.
In Monero’s case, the study found that 30% of its transactions were traceable.
Users to Be Blamed for Zcash Traceability
The report by the researchers defined Zcash as a Bitcoin fork that was created with the idea of obliterating the link between the sender and receiver of cryptocurrency.
The report asserted that Zcash is still not the most popular digital asset within the dark web economy – a reality that is reflected on findings indicating that Bitcoin has always been the most preferred cryptocurrency by darknet operators and users.
Otherwise, the already-mentioned cryptographic tool Zero-Knowledge Proof enables ZEC to stop any possible activity between the transaction prover and verifier – a mechanism that prevents the possibility of linking addresses together.
Despite this, according to the study outcomes, a majority of Zcash users have failed to fathom ZEC’s operating model, and the minimal number of users employing shielded transactions make Zcash “effectively traceable”.