ZCash vs Monero: Difference Between Monero (XMR) and ZCash (ZEC)

Find out the differences and similarities between Zcash and Monero. ⚡ Learn which coin is more private and which one is better to invest in.

Many cryptocurrencies, including Bitcoin, have transparent blockchains. The data about every transaction is open to everybody who uses the blockchain. And if one tries very hard, the sender and receiving addresses can be linked to specific individuals. Under such circumstances, it is very difficult to speak about transaction privacy.

Both Monero and ZCash focus on the privacy of users and transactions in their networks. However, these coins are very different. Even the way they treat privacy matters differs significantly.

What Is Monero (XMR)?

Monero is a decentralized cryptocurrency. This privacy-oriented cryptocurrency was launched in 2014 with the aim to solve the privacy issues that were faced by the majority of cryptocurrencies at that time. It runs on an opaque blockchain. It obscures transaction details and the amount sent by disguising the addresses of transaction participants.

What Is ZCash (ZEC)?

ZCash is another cryptocurrency focused on transaction privacy and user anonymity. The ZCash network was launched in 2016 with the aim to solve the privacy issues that Bitcoin was facing at that time. ZCash is built on the Bitcoin network and is similar to the main coin in many regards. The main differences are the ways the coins approach privacy matters and the fungibility level of each coin.

ZCash vs. Monero: Privacy

Monero is a project with the initial aim to solve transaction privacy issues. The project uses privacy-enhancing technologies to ensure the complete privacy of every transaction and the anonymity of users. Every transaction in the Monero network is completely anonymous.

ZCash is also focused on privacy but it takes a different approach to the issue. It allows users to make transparent transactions (just like in the Bitcoin network) or to shield them to make them completely private. It is the main difference in the approach to privacy between ZCash and Monero.

ZCash vs. Monero: Cryptography

In the Monero network, all the transactions are private by default. The network uses three technologies to make all the transactions obscure:

Stealth addresses (automatically generated one-time addresses for every transaction)
Ring signatures (a group of cryptographic signatures with at least one real participant; all signatures appear to be real, there is no way to find out which one is the real one)
RingCT (it hides the amounts of transactions in the Monero network).

To generate a ring signature, the network uses a combination of the account keys of a sender and clubs them with public keys on the blockchain. It makes them absolutely private and unique. It is impossible to find out which keys were used to produce the signature.

ZCash gives users the choice of sending a normal or a shielded transaction.

ZCash has two types of addresses:

Private (z-addresses) – they start with “z”
Transparent (t-addresses) – they start with “t”

Between these two types of addresses, the following transaction types might occur:

Z-to-Z transactions are registered on a public blockchain. The only information seen is that the transaction happened and the fees were paid. Other details are encrypted with zero-knowledge proofs.
T-to-T transactions work just like transactions made in Bitcoin.
Finally, transactions might occur between a t-wallet and a z-wallet. In this case, it is important for users to understand what is shielding or deshielding of transaction data.

Where to Store Zcash and Monero

Both ZEC and XMR can be stored in ZCash and Monero wallets respectively. To choose the best option, make sure you understand what you are going to use the coins for. For trading purposes, a hot wallet (online wallet) might be a better choice. If you are going to keep the coins, a hardware wallet is the safest option to do so.

When selecting a wallet, make sure you check the following parameters:

The wallet shall be developed by a reliable company with extensive experience in the field
It shall be safe, so, 2-factor authentication is a must, as well as backup options
For storage purposes, a wallet that allows you to keep your private keys and a seed phrase is better
Finally, the wallet price shall be adequate

You can read a more detailed guide on the wallet selection here.

Where to Buy Zcash and Monero

ZCash and Monero can be purchased on the majority of cryptocurrency exchanges. You might choose a custodial service where you can keep both coins directly in your wallet offered by the selected platform or you might use the services of an instant exchange like LetsExchange where you can purchase the coins for more than 4,000 other coins and tokens. In the latter case, you need to have a wallet where you will receive the swapped coins. But you will also keep private keys to your coins which means full ownership over them.

Zcash vs Monero: Conclusion

While both coins focus on privacy, their approach to privacy is different. Monero transactions are private by default. ZCash transactions are private when users choose them to be such. Both coins have their pros and cons, and both of them have growth potential.

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