Zcash, the latest virtual currency, has been a smash success since its launch seven months ago, drawing in new users with promises of unrivaled privacy protection.
After debuting on currency trading platforms in October, Zcash took off, hitting an exchange rate of $1,000 per unit, putting it in league with the much better established Bitcoin.
While its value has since come down to earth, Zcash is attracting the interest of Russian, Chinese, Venezuelan and South African consumers. Brazilians now use Zcash to pay taxes and electricity bills.
To make its mark in the world of virtual currencies, Zcash boasts that it protects user privacy . But because of that guarantee it does not offer the transparency demanded by authorities who want to prevent these new tender from being used in money laundering, financing terror ism, evading taxes or fraud.
Zcash was developed by researchers at Johns Hopkins University and MIT in the US and Tel Aviv University and the Technion-Israel Institute of Technology in Israel.
Only five of the six people who developed the cryptography have been publicly identified.
It is based on a technology dubbed zk-Snark, which allows untraceable transactions. Other cryptocurren cies such as Dash and Monero offer a level of privacy , but Zcash, managed by a firm called Zerocoin Electric Coin Company , even obscures the origin of a payment.
Virtual currencies are not regulated by any central bank, and can be "mined" or produced by anyone with sophisticated software skills to gather up the code.
Nevertheless, despite this, experts warn that Zcash may be vulnerable to hacking or counterfeiting.
