Zcash (ZEC)

The Zcash network offers two kinds of addresses. The first are Transparent addresses, called t-addresses, which work like bitcoin addresses. When someone sends Zcash between t-addresses, the sender's address, the receiver's address, and the exact amount land on the ledger in plain text. The second are the Shielded addresses, called z-addresses, use zero-knowledge proofs to hide the sender, receiver, and amount, but only when both sides of the payment use shielded addresses.¹

The protocol does not force privacy so it's surveillance-by-default. Unlike privacy coins, Zcash makes your wallet public to the world by default like bitcoin and subject to the same surveillance risks as other transparent coins.

Most wallets, mobile apps, and centralized exchanges make the transparent Zcash addresses the default. Users have to take extra steps to stay in shielded mode. Because the ledger stays public, any transparent transaction can be tracked, linked to real-world identities, and studied by governments, companies, or blockchain analysts.^{1 3 13}

The problem Zcash tried to solve

In ordinary banking, balances and transactions sit behind centralized controls. On an open (transparent/surveillance) ledger, anyone can follow where funds move. People do not put their legal names in the chain; they use addresses. If an observer ties one address to a person, they can often track and trace that person's financial history across the graph.^{4 6}

Zcash reasoned that it could offer decentralized digital cash without broadcasting every detail to the public internet with opt-in privacy features- a decision makes Zcash closer to surveillance chains like bitcoin than privacy preserving coins like, say, Monero.⁴

Academic origins

In 2013, researchers at Johns Hopkins University (Matthew Green, Ian Miers, and Christina Garman) proposed Zerocoin as a way to add privacy to bitcoin. They found integrating it into bitcoin too fraught, due to the contentious nature of the bitcoin community, and moved toward a new protocol, Zerocash.⁴

In 2014, the Hopkins group worked with scientists at the Technion (Israel Institute of Technology), Tel Aviv University, and MIT on the Zerocash paper that formalized the ideas behind shielded transfers.⁴

Eli Ben-Sasson, a Technion professor with a doctorate from the Hebrew University of Jerusalem, co-led much of the zk-SNARK line of work that powers Zcash-style proofs.⁸ Eran Tromer from Tel Aviv University was another key author on that research line.⁴ Funding paths cited in later coverage include Israeli research programs such as I-CORE and the Israeli Ministry of Science and Technology; the Zerocash lineage later drew an IEEE Test of Time recognition in 2024.⁴

In 2015 the team formed the Zerocoin Electric Coin Company (later Electric Coin Company), founded by Zooko Wilcox. Edward Snowden participated in the initial multiparty ceremony to bootstrap Zcash parameters, a detail often retold in press coverage.⁹ The network went live on October 28, 2016.⁴

How the cryptography works (simply)

Zcash uses zk-SNARKs (zero-knowledge succinct non-interactive arguments of knowledge): a proof that a statement is true without revealing the underlying secrets.¹

Imagine a digital badge that lights green to show you are over eighteen without showing your birth date, name, or street address. For shielded Zcash, the wallet builds a proof that inputs balance to outputs under consensus rules and that you had authority to spend them. Nodes verify the proof without learning who paid whom or the precise amount.¹

The surveillance reality

Because transparent addresses are default, the public ledger stays easy to surveil for anyone who mostly uses t-address transactions. If you live on t-addresses, your history is as exposed as it is on bitcoin for the transparent slice of your activity.^{1 13}

Privacy in these systems leans on an anonymity set: you hide inside the crowd. For long stretches, a relatively small fraction of value sat in the shielded pool, which makes shielded actions statistically louder when few peers join them.^{6 13}

In December 2025, Arkham Intelligence published work claiming they had deanonymized more than 53% of Zcash transactions, linked roughly 48% of inputs and outputs to specific entities, and labeled about 37% of balances (they cited on the order of $2.5 billion at the time of their modeling). They highlighted transactions such as a U.S. government-associated wallet holding funds tied to seizures from Alphabay operator Alexandre Cazes.⁵ (To me it's just not worth that playing whack-a-mole with your privacy.)

They also narrated retail-scale behavior, for example a trader who bought heavily during an October 2025 drawdown, held several weeks, then routed profit to Gemini in patterns Arkham says it could follow. The zk-SNARKs were not "cracked" in the sense of invalidating the math; the lesson in their writeup is that transparent rails, exchange interfaces, and boundary behavior leak enough to rebuild stories.⁵

Many large venues only support deposits and withdrawals on transparent addresses, which keeps the default path visible. Transactions that hop between transparent and shielded pools leak information at the edges (timing, sizing, and graph shape), even when the shielded segment itself reveals nothing on-chain.¹³

Here's the catch: most people use transparent addresses. So if you live on t-addresses, your history is as exposed as on bitcoin for the transparent slice of your activity.

Usage statistics: the shift toward shielded

In 2025, firms that track Zcash data reported more use of shielded transactions. Coin Metrics described the picture as privacy mattering again while overall network activity picked up. Other writeups estimated that a growing share of all Zcash sat in shielded pools; by late 2025, some put that share between about one-fourth and nearly one-third of coins in circulation.^{2 14}

By April 2026, one exchange-facing recap pointed to on the order of 5.17 million coins in shielded pools and roughly 31% of circulating supply, with day-to-day traffic in early 2026 sometimes showing a majority of transactions as shielded in their windowed samples.¹⁴

Product changes seemed to have helped: the Zashi wallet prioritized shielded transactions by default and later rebranded to Zodl in February 2026, lowering some UX friction for staying inside shielded transactions if the user sticks with compatible counterparties.¹⁴

Network economics and the developer funding crisis

Like bitcoin, Zcash caps supply at 21 million coins. Block subsidies halve on a four-year cadence: November 2020 (12.5 to 6.25 ZEC), November 2024 (6.25 to 3.125 ZEC), with the next halving slated around February 2028 in public roadmaps.⁷

Unlike bitcoin, Zcash carved out a Development Fund: ZIP 1014 originally sent 20% of issuance to ecosystem work split among the Electric Coin Company, the Zcash Foundation, and community grants rather than paying miners alone.⁷ That arrangement was set to expire in November 2024; debate over renewal, governance, and whether automatic payouts should continue produced public tension, with NU6-era updates reallocating slices (for example 8% to Zcash Community Grants and 12% to a holder-influenced bucket in the community-approved framing).^{7 12}

Security crises and technical upgrades (2025-2026)

In April 2025 maintainers announced deprecation of zcashd, the 2016-era C++ node, in favor of Zebra, a Rust implementation meant to modernize consensus and engineering velocity.

In early 2026, researcher Alex "Scalar" Sol reported severe defects affecting both codebases: one class of bug let a malicious shielded transaction crash validating nodes; another risked consensus divergence between zcashd and Zebra that could fork views of history if unpatched. On April 17, 2026, Zcash Open Development Lab, the Zcash Foundation, and Shielded Labs published fixes (notably zcashd v6.12.1 and Zebra v4.3.1). Mining pools reportedly patched privately before public disclosure, and teams stated they saw no in-the-wild exploitation evidence at disclosure time.¹⁵

Governance clash and institutional interest

In January 2026, reporting described the Electric Coin Company's engineering team resigning after disputes with Bootstrap, the nonprofit structure attached to network support, a narrative CoinDesk covered as a governance fracture.¹⁰

Institutional threads ran in parallel. Grayscale pursued conversion of its Zcash trust to a spot-style ETF structure in late 2025 filings commentary, while the SEC reportedly closed an investigation into the Zcash Foundation without charges in January 2026, a step press tied to renewed retail listings such as Robinhood onboarding ZEC.¹¹ In March 2026, Zcash Open Development Lab announced a large seed round (coverage cited more than $25 million) aimed at widening shielded payment access.¹¹

Messari's late-2025 overview remains a useful neutral explainer for tokenomics, upgrade cadence, and governance touchpoints despite the fast-moving headline cycle.⁴

The Aquarian Take

Zcash is a popular cryptocurrency. It's accepted in many places crypto is for gods and services and it's got a thriving community of users. There's nothing wrong with that and I love the fact that there's so much choice in the space. It exemplifies the free market at work. Many people who I respect advocate for it and use it even though I vehemently disagree them.

One thing I've noted is that shielded transactions are on the rise... hitting nearly 60% of activity in early 2026, with about 31% of the total supply now shielded. Privacy matters and I think that's finally being recognized. But while the increase in private transactions sounds like progress for privacy, it's really not the whole story.

What's actually happening is a push from various wallets (like Zodl) to make shielded transactions the default. This masks the underlying issue: Zcash remains a surveillance-by-default coin at the protocol level. Any major exchange where Zcash exists will likely force you into transparent addresses for deposits and withdrawals to stay "compliant". You're stuck hopping in and out of transparent and shielded pools, leaking metadata and transaction patterns every time you touch the surveillance side. It's like playing whack-a-mole with your own privacy.

Let's say all exchanges and all wallets were to enforce privacy-by-default for all transactions. It still wouldn't solve the problem of leaking metadata and transaction patterns every time you touch the surveillance side. It makes it easier to avoid, but it doesn't dissolve the risk of exposure the way privacy preserving coins like Monero do.

For those of us who value your right to privacy, half-hearted privacy is a non-starter.

Institutional Control & Price Manipulation

There are also growing indications that Zcash is a "captured" asset. In March 2026, the Zcash Open Development Lab announced a $25 million raise from heavyweights like Paradigm and a16z. While some see "institutional validation," others see a project increasingly beholden to the same venture capital interests that prioritize regulatory friendliness over user sovereignty. This influx of institutional capital, combined with "mispriced asset" narratives from investment firms, points toward the artificial manipulation of Zcash's market value.

The Epstein & MIT Connection

Most concerning is the institutional "DNA" of the project. Recent investigative reports, including a February 2026 report from Latvian Television, have deepened the links between Zcash's founders and Jeffrey Epstein's network:

• Direct Contact (Madars Virza): Zcash co-founder Madars Virza had direct personal and business correspondence with Epstein between 2017 and 2019. Epstein even engaged tax consultants to assist Virza and described him as a "coin guy."
• The Bannon Link: In 2018, Epstein personally introduced Virza to Steve Bannon during a meeting of the Cambridge scientific community. Emails show Virza visiting Epstein's New York home in 2019, later describing the financier as "a torrent of positive energy."
• The MIT "Bridge": Zcash was born out of the MIT Media Lab (specifically the Digital Currency Initiative), which was the primary vehicle for Epstein's funding of the crypto space. Joi Ito, who resigned in disgrace over the Epstein scandal, was the direct link, emailing Epstein as early as 2015 (EFTA00680068.pdf) about bringing bitcoin developers into the lab's orbit.

Document Evidence & Mirrors

These connections aren't speculation; they are documented in the DOJ's Epstein files. If you can't access the government links, you can find mirrors of these specific files on Jmail.cc, DocumentCloud, or Archive.org (search for "Epstein DOJ Dataset 9 or 10"):

• EFTA00680068.pdf: Ito forwarding details on the MIT DCI to Epstein (2015).
• EFTA01917472.pdf: Metadata regarding a "Final Blockstream allocation" involving Epstein and Joi Ito (2014).
• EFTA00901772.pdf / EFTA01001757.pdf: Chains involving Brock Pierce and Epstein regarding Coinbase positions and fund wires.

Epstein Takeaway

We're not saying these people are guilty of anything in particular. They might be perfectly innocent. We're not making any accusations here. But it's hard to not see these connections as a red flag for Zcash. The code is open source, so you can see for yourself whether or not you trust the people behind it. Or maybe it doesn't matter to you at all. It's your choice after all. For us... it matters.

We understand the implications of a surveillance-by-default coin and the risks it poses to your privacy as the global financial surveillance grid comes online and feel it's necessary to highlight them.

Safer Alternatives

For those who rationally refuse to compromise on their privacy, Zcash isn't the best choice. If you like their shielded tech, but concerned about looking over your shoulder due to the surveillance-by-default nature, check out Pirate Chain as it's a fork of Zcash but enforces privacy-by-default for all transactions.

Further Reading

• Optional Privacy Isn't Privacy- it's Surveillance - It's a bit older but still VERY relevant.
• Spotlight on Pirate Chain - A newer article that goes into more detail about Pirate Chain and how it's different from Zcash.