Ethereum (ETH) has had a scaling problem for quite some time now. Most of the proposed solutions for scaling Ethereum (ETH) such as Plasma have lots of challenges and are years away from implementation. One technology that has been gaining traction in the Ethereum (ETH) community is ZK-Snarks. This technology developed by Zcash (ZEC) was proposed by Vitalik Buterin in September, as can be seen in his write-up below. Vitalik wrote that,
“We can actually scale asset transfer transactions on Ethereum by a huge amount, without using layer 2’s that introduce liveness assumptions (eg. Channels, plasma), by using ZK-SNARKs to mass-validate transactions. Here is how we do it. There are two classes of user: (i) transactor, and (ii) relayer. A relayer takes a set of operations from transactors, and combines them all into a transaction and makes a ZK-SNARK to prove the validity, and publishes the ZK-SNARK and the transaction data in a highly compressed form to the blockchain. A relayer gets rewarded for this by transaction fees from transactors. The system is managed by a contract, whose state consists solely of two bytes32 values representing Merkle roots: address book (A) and balances+nonces (B). A starts off as a Merkle root of 224 zero entries, and B as a Merkle tree of 224 (0, 0) tuples.”
If implemented ZK-Snarks could see Ethereum scale by up to 500 transactions per second. This would be a huge boost for the Ethereum (ETH) network, even as it works on other scaling solutions. Beyond Ethereum (ETH), ZK-Snarks has wide-ranging implications for Zcash (ZEC). It makes it stand out as one of the best cryptocurrencies in the market for several reasons.
First, it creates the impression that the Zcash team is a cut above the rest in terms of technological prowess. That’s because they created a technology that not only gives Zcash top-notch privacy but scalability as well. This is a confidence boost for anyone looking into Zcash as an investment. It is noteworthy that Zcash was created based on the research of top scientists from MIT, Tel Aviv University, Technion, John Hopkins, and UC Berkeley. Its tech superiority not only makes it a top privacy coin but also one of the best cryptocurrencies in the market. This to a large extent guarantees its long-term value growth in the market.
Secondly, Zcash has one of the most important features in the privacy coins market, and that’s the ability to send transparent transactions. This could help save Zcash (ZEC) from tough regulations that could be instituted against privacy coins in the future. It has happened this year in Japan, and there are no guarantees that it could not happen again at scale. As such, the fact that Zcash (ZEC) has the capability to by-pass such regulations gives it an edge not just as a privacy coin, but as an everyday payment method as well.
All this points to Zcash as a perfect cryptocurrency. It is private, scalable, and best of all it has a very low coin supply, which gives it an element of scarcity. With such strong fundamentals, it’s not hard to envision Zcash (ZEC) at upwards of $1000 a coin. Actually, it’s one of the few coins that have a realistic chance of hitting bitcoin’s current valuation in the future.