The state of Zcash adoption

Since 2016, Zcash has become one of the most widely adopted digital currencies, supported by high-quality financial institutions and crypto companies around the world. At Electric Coin Co. (ECC), our primary focus is driving universal accessibility of Zcash, because we believe that private, non-censorable transactions are necessary for business and commercial use cases. 

Zcash is an open-source and permissionless digital currency that protects users’ privacy through zero-knowledge cryptography. This gives people the option to send and receive transactions without revealing information about the sender, recipient and transaction amount. This is called a shielded transaction, and it’s one of two types of transactions Zcash supports: Shielded transactions are private and encrypted, while transparent transactions are public and function similar in nature to transactions on the Bitcoin network. 

This blog outlines the state of Zcash adoption and details primary ways Zcash is used. To date, ecosystem participants are using Zcash through a variety of platforms as payment for goods and services, for private charitable donations, and a cross-border medium of exchange.

Ecosystem

Our adoption strategy is focused on (a) providing infrastructure to securely store and manage Zcash and (b) improving market liquidity. We are committed to making Zcash universally accessible so that anyone is free to transact on the network.  

Zcash is available on top global exchanges and is supported by seven of the Bitwise Real 10, which measures cryptocurrency exchanges by real (vs. faked) transaction volume. Constituent exchanges include: Binance, Bitfinex, Bittrex, Coinbase, Gemini, Kraken and Poloniex. As of May 1, 2020, Zcash is ranked 11th by Coinmetrics for 24-hour transaction volume, a measurement of on-chain economic activity.

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A large percentage of Zcash trading in the United States occurs on exchanges that are registered with FinCEN as money service businesses (MSBs), including Kraken, Poloniex, Coinbase and Gemini. The latter two exchanges also hold a New York state BitLicense.

In May 2018, the New York State Department of Financial Services (NYDFS) issued a statement granting approval for Gemini to support Zcash trading and custody. As a New York Trust Company, Gemini is subject to rigorous review of anti-money laundering, capitalization, consumer protection and cyber security standards. Gemini’s support for Zcash furthered our mission to provide everyone with access to the tools and platforms needed to transact safely and securely. According to Gemini, “the Zcash protocol’s cutting edge use of zero-knowledge [cryptography] makes it a truly innovative privacy coin that offers confidentiality for peer-to-peer transactions similar to those afforded to fiat currency transfers (e.g., ACH, FedWire, SWIFT).”

Security and privacy are critical for widespread adoption, and ECC has invested in relationships with best-in-class service providers. Today Zcash is supported by regulated and institutional-grade custodial and wallet services, and we continue to prioritize work on wallet libraries and SDKs to support the growth of the ecosystem.

Commerce

Zcash is supported at top cryptocurrency payment providers, including Flexa and Gemini Pay. On the Flexa network last month, Zcash accounted for 11 percent of all transactions at Baskin Robbins, 31 percent of all transactions at Ulta, 16 percent of all transactions at GameStop, 13 percent of all transactions at AMC theaters, and 19 percent of all transactions at Petco. Today, Zcash can be used at more than 39,000 major retail locations, coffee shops, movie theaters and more.

Zcash payments don’t require a credit card or bank account, which creates access to more inclusive financial services that reach unbanked and underbanked populations.  Zcash transactions are secure, borderless and available to everyone, regardless of age, ethnicity or financial status. 

Charities and nonprofit donations

Privacy is an often-overlooked component of charitable giving, for both the donor and recipient. There are a number of reasons why someone might choose to donate anonymously. In many cases, it’s because they want to support a cause without public notoriety. Likewise, charities that are firmly focused on an organization’s mission may not want the source of a donation to be a distraction from the work they are doing.

A growing number of charitable causes accept Zcash. Their missions range from privacy advocacy to freedom of the press and more.

AirDrop Venezuela is an organization dedicated to providing humanitarian aid directly to thousands of Venezuelans. Funds can help a family purchase food, medicine or scarce imported goods. To date, the initiative has raised more than 300 Zcash and reached over 60,000 ID-verified recipients. 

BitcoinTuesday is a campaign launched to support those affected by the Covid-19 pandemic. More than 160 Zcash has been raised as part of this initiative, with the proceeds going to a wide range of participating charities: 41 percent of the Zcash donations were sent to Save The Children, 31 percent to SOS Children’s Villages, 16 percent to Human Rights Foundation, 8 percent to No Kid Hungry, and 4 percent to TOR Project. 

The Giving Block ran a campaign for International Women’s Day to support two non-profit organizations: Africa Development Promise and The Mona Foundation. Africa Development Promise is a charity focused on empowering rural women and supporting their efforts to achieve economic independence. The Mona Foundation’s mission is to provide educational opportunities to children around the world and empower women and girls so they can elevate their communities. The campaign raised $15,000 and Zcash was the top donated cryptocurrency.

Many other charitable organizations accept Zcash, such as:

  • Electronic Frontier Foundation is the leading nonprofit organization defending civil liberties in the digital world. EFF champions user privacy, free expression and innovation through impact litigation, policy analysis, grassroots activism and technology development.
  • Freedom of the Press protects, defends and empowers public-interest journalism in the 21st century.
  • GiveCrypto.org distributes cryptocurrency to people living in poverty.
  • Open Privacy Research Society conducts scientific research advancing the area of privacy and anonymity as they relate to computer science and computer security.
  • The Tor Project creates Tor Browser, which enables you to use the internet privately and resist surveillance.
  • The Internet Archive is building a digital library of Internet sites and other cultural artifacts in digital form. They provide free access with a mission of providing “Universal Access to All Knowledge.”

Encrypted messaging

There has been an increase in novel applications of Zcash that utilize the encrypted memo field of shielded transactions. The memo field lets a Zcash user sign and encrypt messages that are appended to the blockchain. 

ZECpages is an anonymous messaging board and directory where users share stories, songs, poems, jokes and anything else that’s top of mind. A Zcash user can simply send a shielded transaction to the directory’s specified z-address and include a memo in the transaction to post a message on the board. Since inception, 137 people have shared nearly 200 unique messages on the platform.

Zbay is a peer-to-peer marketplace for exchanging goods and information. It uses Zcash shielded transactions and encrypted memos to communicate and transact. Zbay decided to build on Zcash so it can offer basic privacy protections like end-to-end encryption for direct messages and group chats. Unlike a centralized service like Facebook, where privacy guarantees are based just on what Facebook says it will do, the privacy guarantees in Zbay are based on encryption, free software and peer-to-peer networks.

Remittance

Sending cross-border payments can be a complex process due to industry fragmentation and intermediation, causing high transaction fees and long settlement times. According to McKinsey research on cross-border payments, the average time to complete a cross-border transaction is three to five business days. Inter-bank-transfer and foreign-exchange fees accumulate at each step in the process and often amount to more than 10 percent of the total transaction. Nowhere is this more important to solve than in low and middle-income countries where low-cost payments are a necessity.

Zcash enables instant, low-cost, and secure cross-border payments, which provide compelling benefits over the traditional banking system. In many countries around the world, Zcash transactions provide privacy that is crucial to protect the safety and wellbeing of those people.

Earn Zcash

Over the last several years, the primary way people have obtained cryptocurrency is through buying it. For broader adoption, however, we believe people should be able to earn it. Through the Coinbase Earn campaign, users could earn Zcash by watching short video lessons about the privacy-preserving currency.

We worked with the Coinbase team to develop over seven minutes of educational content. That content was viewed over 500,000 times by more than 117,000 unique Coinbase users. Coinbase reported that 58 percent of their users held onto the Zcash they earned through the program and that 4.7 percent acquired additional Zcash.

Zooko Wilcox, founder and CEO of Zcash, characterized the campaign as a great tool for the currency and its adoption, saying, “Coinbase Earn is a phenomenal way to educate new users about Zcash. Thanks to Coinbase Earn, hundreds of thousands of people have learned about financial privacy, zero-knowledge proofs and how to use Zcash to protect their privacy online.”

Education in underserved communities

In the Bronx, 29.7 percent of the population lives in poverty — just miles away from the wealthiest neighborhoods in New York City. The lack of access to traditional banking forces many households turn to alternative financial services that charge exorbitant fees, leaving the unbanked and underbanked trapped in a cycle of poverty. Improved financial literacy and access to affordable banking products are necessary to increase economic participation in these communities.

In 2019, ECC provided scholarships to 35 students to attend two-day Crypto Community Project workshops in the South Bronx. During the program, students worked with leaders in the cryptocurrency ecosystem to learn about the fundamentals of blockchain, personal finance and self-sovereignty. They learned how to install their first digital wallets, how exchanges work and how to send a Zcash transaction. The students were also asked to go out into the neighborhood and spend some of the Zcash they received as part of the program.

Instead of a traditional curriculum, the classes were taught by industry leaders from companies like Flexa, Gemini, Casa, Messari and ECC. Three of the students received paid internships directly from the host companies; and several others formed mentorships with the speakers that continued long past the event.

Crypto Community Project in the South Bronx

Our goals for the program were to:

  • Empower students to become leaders and major contributors to the Zcash ecosystem.
  • Provide educational resources to expose students to concepts in blockchain technology.
  • Create professional-development opportunities for students to get real-world experience in the crypto industry.

By focusing on education and putting Zcash directly into the hands of the underbanked, we can begin to address some of the inequities that exist and provide access to basic financial services for everyone.

Conclusion

Zcash enables a range of use cases for public blockchains that would not be possible on a fully transparent ledger.

The need for privacy exists in commerce, personal finance, philanthropy, communication and more. Zcash is solving real-world problems that require digital privacy. As new infrastructure is developed, the tipping point to crypto mass adoption gets closer. Privacy will be necessary to meet the evolving needs of both consumers and commercial businesses.