Author: Naly
Compiled by: TechFlow TechFlow
summary
Zcash (ZEC) can be considered a stealth version of Bitcoin.
It has the same supply cap, the same halving mechanism, and the same deflationary architecture as Bitcoin, but it is invisible.
As institutions, governments, and native users of the crypto industry increasingly view Bitcoin as a sovereign store of value, the world is beginning to realize the need for a second dimension of currency—one that is not only scarce and self-custodial, but also permissionless and privacy-preserving.
In a world rapidly moving towards AI surveillance, programmable money, account freezes, and cashless control systems, Zcash offers a second dimension of monetary freedom—not only scarcity but also protection.
This report will delve into the core concept of Zcash as a “stealth Bitcoin” and why it may be the most asymmetric investment option in the crypto space today.
Key highlights:
A cryptocurrency system with a fixed supply cap, similar to Bitcoin, but its maturity lags behind two halving cycles.
It draws on a strong cypherpunk background, including cryptographic setups involving Edward Snowden.
Even without technical knowledge, it's easy to understand: the concept of invisible currency is intuitive enough.
The renewed attention from institutions and thought leaders, such as Naval Ravikant, stems from the growing importance of financial privacy, rather than hype.
This report breaks down Zcash's investment logic into eight key areas:
Ideology
Origin Story
Technological advantages
competitors
Token Economics
Macroeconomic correlation
Risks and Challenges
Investment Logic
1. Ideology
Zcash was not created to compete with Bitcoin, but to address its shortcomings. Bitcoin grants monetary sovereignty, while Zcash grants monetary privacy. It extends Satoshi Nakamoto's design to an area that Bitcoin has never been able to control—stealth.
From Bitcoin's early development, privacy has been considered one of its fundamental weaknesses. Hal Finney—one of the first to run Bitcoin and the recipient of the first transaction sent by Satoshi Nakamoto—was acutely aware of this. He warned that while Bitcoin's transparent ledger offered significant advantages in verification, it would inevitably undermine its fungibility because the coin's history could be traced and distinguished. For Finney and the early cypherpunks, this undermined the core concept of digital cash.
Hal Finney was active on cypherpunk mailing lists in the 1990s, a community that first discussed concepts such as zero-knowledge proofs and cryptographic anonymity as tools for achieving personal autonomy. He firmly believes that future digital currencies need to be both verifiable and private.
Years later, Zooko Wilcox—another veteran cypherpunks and early Bitcoin contributor—dedicated himself to solving this problem. He collaborated with a world-leading team of cryptographers to co-author the academic proposal Zerocoin, aiming to extend Bitcoin's transaction privacy features. However, when Bitcoin Core developers rejected this proposal, the team decided to start from scratch, creating a completely new protocol.
This protocol eventually evolved into Zcash, which officially launched in 2016. Its founding principle is simple yet radical: privacy is the norm. It is not a privilege or optional feature, but a fundamental attribute of sound money.
For a long time, privacy has been misunderstood as something secret or hidden. However, in reality, privacy is about dignity, autonomy, and the freedom to choose who to disclose information to. It is the silent cornerstone of self-sovereignty.
Bitcoin achieves censorship resistance through decentralization, while Zcash goes a step further, bringing financial invisibility. By employing zero-knowledge proofs, Zcash allows users to verify transactions without disclosing the sender, receiver, or transaction amount. It is the first time that value can be transferred on a public blockchain without revealing identity or activity.
This innovation made Zcash the first project to actually deploy zk-SNARKs in a permissionless blockchain, a milestone that shaped the broad field of zero-knowledge cryptography. Even today, Zcash remains one of the few protocols that treats privacy as an underlying property rather than an add-on feature.
Zcash's origin story connects two eras: the cypherpunk beginnings of Bitcoin and the forefront of modern cryptography. It represents the maturation of an idea originally conceived by Satoshi Nakamoto, Hal Finney, and other early internet builders: privacy is not a vulnerability to be patched, but a right to be protected.
2. Origin Story
In the early days of Zcash, generating cryptographic parameters was necessary to achieve shielded transactions. However, if these parameters were compromised, it could theoretically lead to undetectable coin inflation. To mitigate this risk, the Zcash team designed one of the most captivating launch events in cryptocurrency history, known as "The Ceremony."
The "Ritual" is a globally distributed, multi-party computation activity conducted with extremely high operational security standards. Each participant operates in a physically isolated environment, using network-isolated devices, and destroys all encrypted materials upon completion of the task. Its goal is to ensure that no single party, or even multiple parties, can collude to reconstruct the key.
Among the participants was Edward Snowden, who participated under an alias and only revealed his identity in 2022. Snowden's involvement, as a symbolic figure in the digital privacy movement, further solidified the "ritual's" place in cryptocurrency history.
Radiolab's coverage of this event read like science fiction:
Wizard Hat
Paper map, no GPS
The hardware burned in the campfire
The TV was removed from the randomly selected hotel.
Laptop under the pillow
Remove phone battery during call
Bitcoin has a Genesis Block, while Zcash has a "ritual".
Bitcoin records history, Zcash records crypto history.
If you believe privacy is a collective right, then Zcash is the starting point for that idea. This is especially important in narrative-driven markets. Internet slang and origin stories aren't distractions from fundamentals; they are vehicles for beliefs, and beliefs are the driving force behind network effects.
3. Technology
Zcash is the first project to implement zero-knowledge concise non-interactive knowledge proofs (zk-SNARKs) in a permissionless blockchain environment. Although zk-rollups have become increasingly popular in recent years, Zcash applied zero-knowledge cryptography to a real-world production environment as early as 2016.
The core of zero-knowledge cryptography is that it allows one party to prove something is true without revealing any underlying data. In traditional blockchains (such as Bitcoin and Ethereum), verifying a transaction requires publicly disclosing the sender, receiver, and transaction amount, all of which are permanently recorded on a transparent public ledger.
Zcash offers a radically different model. Through zk-SNARKs, users can prove the validity of transactions without disclosing any details. This is not an additional layer of obfuscation, nor an optional privacy tool, but a fundamental function enforced by cryptography and built into the protocol.
Zcash supports two types of addresses: transparent addresses (t-addresses), which function similarly to Bitcoin's model; and shielded addresses (z-addresses), which offer complete privacy protection. Funds can flow freely between these two pools. This flexibility, along with the integrated nature of the shielded pools, makes Zcash structurally distinct from almost all other blockchains.
The privacy of the ZEC network is directly related to the liquidity in the Shielded Pool: just like a crowd, the larger the number of people, the more difficult it is to identify the individuals within it.
While the technology itself is very powerful, critics point out that shielded transactions have historically represented only a small fraction of overall network activity, providing a “small population to hide from” shielded users. This is partly due to insufficient wallet support, user experience barriers, and the relatively high computational resources required to generate zk-SNARK proofs.
At times, the percentage of fully shielded ZEC transactions was even below 5%. However, this trend is reversing. Recent updates to the proof system and the emergence of new tools such as the Zashi wallet have made shielded transactions much easier to use. According to the Zcash Foundation, over 70% of active wallets now support shielded transactions, and the volume of daily shielded transactions is rapidly increasing.
Today, over 25% of circulating ZEC has entered the shield pool, and that number is rapidly increasing. The key difference here is that privacy alone is not enough. For widespread adoption, privacy must be available. Zcash has spent the past decade building its cryptographic foundations, and is only now beginning to develop the user interface that will propel it into the mainstream.
4. Competitors
Before delving into Zcash's tokenomics, it's essential to clarify its uniqueness within the broader realm of digital asset privacy. In today's market, Zcash faces relatively few true competitors.
Despite its widespread use, Monero relies on ring signatures—a powerful technique that has vulnerabilities in statistical and heuristic analysis. Even Monero's developers acknowledge these limitations and are exploring the integration of zero-knowledge systems to enhance privacy. Furthermore, Monero's model carries a reputational burden, having long been associated with Dark Web markets and unregulated activities.
Furthermore, Monero is no longer listed on major exchanges such as Coinbase, Binance, and Kraken, while Zcash can be freely traded on these platforms. This is because Monero offers absolute privacy, making it unregulated; whereas Zcash offers optional privacy, allowing users to choose between transparent or hidden trading.
As observed by Mert of Helius:
“Zcash is dual-mode – users can choose to block or not block their assets.”
If you want privacy to be widely adopted, you need a system that can withstand the test of reality.
It is this balance between privacy and compliance that has provided Zcash with a path to continued growth. Its architecture enables selective disclosure through Viewing Keys, allowing users to share transaction data with auditors, regulators, or trusted third parties when necessary. In short, it provides privacy that operates within the system, rather than privacy outside of it—a necessary prerequisite for widespread adoption.
However, it's inaccurate to simply view Zcash and Monero as competitors. The real challenge isn't which privacy asset wins, but whether privacy can continue to be a crucial pillar of the digital economy. Both ecosystems are driving this development. However, from a design and adoption perspective, Zcash's hybrid model of privacy and compliance makes it more likely to achieve mainstream and institutional integration.
Tornado Cash, a privacy protocol on Ethereum, was once a promising project, but it demonstrated the limitations of systems completely devoid of regulatory adaptability. Its developers faced prosecution due to sanctions and dismantling by authorities, and its smart contracts were subjected to intense scrutiny. This sends a clear message: privacy without resilience or adaptability cannot survive.
In contrast, Zcash achieves privacy at the protocol level through zero-knowledge proofs, a cryptographically stronger approach than ring signatures or mixer-based methods. It combines mathematical rigor with practical flexibility, providing privacy that can coexist with transparency when needed. This technical robustness and legal viability are what make Zcash unique.
Furthermore, Zcash's concept is very easy to understand: it's a "stealth version of Bitcoin"—the same supply cap, the same halving model, the same deflationary architecture, but with shielding capabilities. This narrative simplicity is particularly important from an adoption and investment perspective.
Starting as a cryptographic experiment, Zcash is gradually maturing into a sovereign, private, and programmable financial system. In an era rife with surveillance, programmable currencies, and geopolitical instability, it occupies a unique position.
5. Token Economics
In the post-ETF era, institutions are already familiar with Bitcoin's halving cycles and fixed supply, while Zcash's design seems like an asymmetrical gift.
As Bitcoin's model—fixed supply, halving every four years, and predictable scarcity—becomes a consensus among institutional investors, an asset that is similar but introduces privacy features represents a logical evolution of this concept.
Zcash completely replicates Bitcoin's monetary structure:
Maximum supply of 21 million
It halves approximately every four years.
High initial issuance volume
No ICO, no pre-mining, no venture capital allocation
This is Bitcoin's scarcity model, only in an "invisible" form.
The key difference is that ZEC's halving cycle is two years behind. This lag means it is moving along the same currency curve, just at a more advanced stage.
What sets this cycle apart from previous ones is the scale of capital entering the market. Today, those accumulating Bitcoin are no longer retail speculators or crypto-native funds, but rather managers of trillions of dollars in assets, pension fund allocators, and sovereign entities seeking exposure to hard digital assets. The emergence of spot ETFs has institutionalized the Bitcoin narrative, opening the floodgates for traditional capital that now views programmatic scarcity as a legitimate asset class.
Image: Greyscale Zcash Trust
Many asset allocators missed out on Bitcoin's early development and are unlikely to repeat the same mistake. As institutional investment expands beyond Bitcoin, ZEC's Bitcoin-like supply mechanism, regulatory acceptability, and clear narrative make it a natural secondary allocation option.
ZEC offers the same mathematical scarcity as Bitcoin, while adding another dimension: stealth. For large asset managers who recognize both the power of transparency and its risks, even a small allocation to ZEC represents more options for the next phase of the digital asset cycle.
Launched in 2016, Zcash's early market dynamics were impacted by a steep issuance curve and the lack of pre-sales or venture capital allocations. With supply primarily concentrated in the hands of miners, selling pressure was immense. The price plummeted from its initial speculative peak, the pool of holders gradually expanded, and the asset entered a long-term accumulation phase.
These market dynamics have now reversed.
Circulating supply: Approximately 16.3 million ZEC
Maximum supply: 21 million
Market capitalization: approximately $4.46 billion, a record high, although the price per unit ($272) is still lower than the peaks in 2017, 2018 and 2021.
This difference is crucial. ZEC's early high inflation kept the price chart flat for years, but with supply growth now slowing significantly, market capitalization reveals the real trend—a steady, structural rise that echoes Bitcoin's historical post-halving inflection points.
Chart: ZEC Market Capitalization (Logarithmic Scale)
Trading volume is surging (around $1.28 billion daily), and major players appear to be quietly positioning themselves. Amid the largest liquidation storm in crypto history—over $19 billion in forced liquidations—ZEC is one of the few assets to see its price rise, a clear sign of accumulation.
On-chain data confirms this potential shift:
The number of active addresses and privacy wallets is steadily increasing.
More than 70% of ZEC wallets now support the z-address (privacy address) feature.
After years of stabilization, the number of transactions in privacy pools has begun to grow exponentially.
The distribution of holders remains clean and natural: there has never been any pre-mining, the founder rewards have been fully allocated, and long-term believers control the majority of the supply.
From an investment perspective, this is a textbook example of asymmetry: fundamentals are strengthening, the supply curve is tightening, market capitalization is quietly hitting new highs, and the narrative—Bitcoin's "invisible twin"—is beginning to resonate again. This isn't speculation; it's repricing. The market is beginning to rediscover the true value of Zcash.
6. Macroeconomic correlation
Zcash cannot be assessed in isolation. Its importance only becomes apparent when placed within the context of accelerating digitalization, increasing surveillance, and deepening macroeconomic vulnerabilities.
In most developed countries, public trust in institutions is eroding. Sovereign debt has reached unsustainable levels, fiscal deficits have become a structural problem, and central banks have fewer and fewer tools at their disposal due to political and leverage constraints. Inflation is no longer a temporary shock, but has become a policy issue.
In the current environment, Bitcoin has become one of the main hedging tools against currency devaluation, offering protection as a modern reserve asset for those seeking to avoid fiat currency dilution. However, every Bitcoin transaction, wallet balance, and sovereign purchase is visible on the blockchain. While Bitcoin's transparency ensures the security of its supply, it also exposes the privacy of its holders.
In short, Bitcoin can hedge against inflation, but not against surveillance.
As physical cash gradually disappears and central bank digital currencies (CBDCs) draw ever closer to deployment, the ability for private transactions is gradually shifting from a right to a privilege. Zcash restores this right—not through policy, lobbying, or licensing, but through code.
The past decade has shown that financial infrastructure is no longer neutral. Payment systems have been weaponized, protesters have been deprived of banking services, foreign reserves have been frozen, and entire groups have been excluded from the global financial system because of a few keystrokes.
What was once considered a dystopian scenario has now become standard policy.
Zcash offers an alternative. It's not a platform for speculation or profit, nor is it the underlying foundation for NFTs or games. Its goal is simpler: to protect the privacy and fungibility of the currency itself. By implementing programmable privacy transactions at the protocol layer, Zcash ensures that financial freedom is not lost as the currency becomes fully on-chain.
The macro trends are already clear: surveillance will intensify, scrutiny will expand, and the demand for extrication from a completely transparent financial system will grow stronger. Individuals, businesses, and even institutions operating in adversarial jurisdictions will seek tools that enable the clandestine flow of value. Zcash may not be the only answer, but it is one of the few trustworthy, technologically mature, and aligned solutions.
As Bitcoin enters the institutional arena, being absorbed by ETFs, custodians, and sovereign portfolios, Zcash stands firm on a different front: individual autonomy. It is a quiet complement to Bitcoin's public role, an invisible layer protecting the privacy Bitcoin never intended to provide.
In a world where every transaction leaves a trace, the right to financial invisibility may become the most valuable asset.
7. Risks and Resistance
Despite its robust cryptography and clear philosophical principles, Zcash faces several real-world challenges. The very features that make Zcash compelling—its privacy, purity of philosophy, and technological ambition—also become obstacles to its widespread adoption, usability, and regulatory acceptance.
Regulatory pressure is the most persistent risk. While Zcash has avoided the fate of being dismantled by sanctions like Tornado Cash, it remains in a legal gray area. Privacy assets are often portrayed as instruments of illicit finance, despite a lack of sufficient evidence to support this claim. This perception has already led to Zcash's delisting in some key markets, such as South Korea and the UK. If US regulators take a stricter stance on privacy transactions or expand the scope of anti-money laundering (AML) enforcement, ZEC's accessibility could significantly narrow.
Usability is another hurdle. While Zcash's zero-knowledge architecture is advanced, it's not always easy to use. Privacy wallets, viewing keys, and private transactions typically require a higher level of technical literacy than the average user. Although tools like Zcash significantly improve the user experience, widespread adoption still requires seamless integration of privacy features into mobile apps, multi-asset wallets, and payment systems. For privacy to scale, it must become effortless.
Coordination issues also exist within the ecosystem . The coexistence of the Electric Coin Company (ECC) and the Zcash Foundation has sometimes led to fragmented roadmaps and inconsistent communication. With the Crosslink upgrade approaching, close collaboration between these two entities will be crucial for maintaining trust and driving progress.
Zcash's dual-pool model offers both transparent and privacy addresses, a flexibility that comes with certain trade-offs. Because privacy is optional rather than the default, only a portion of network activity can enjoy complete anonymity. If the adoption of privacy addresses fails to grow with rising prices (which is currently happening), this split could weaken the network's overall privacy guarantees and diminish one of its core differentiating advantages.
Furthermore, Zcash operates in an increasingly competitive zero-knowledge technology field. Since its launch, zk-rollups, modular privacy layers, and other architectures integrated with the Ethereum ecosystem have attracted significant attention and funding from what was once focused on underlying privacy chains. While few of these alternatives offer the same maturity or mission purity as Zcash, they are vying for developer attention and capital.
However, none of these risks are fatal. Each represents an execution challenge, not a structural flaw. Zcash's future lies not in redefining its mission, but in precisely executing it, clarifying its narrative, uniting the community, and continuously optimizing its product.
The battle for privacy will not be won by ideology alone. It will be won by usability, legitimacy, and a sustained belief in the right to free trade.
8. Investment Logic
Chart: Greyscale ZEC Investment Argument
Zcash represents a rare investment opportunity: a structurally scarce, crypto-verified, and market-tested asset currently trading far below its intrinsic value.
Unlike most digital assets that rely on narrative-driven approaches, Zcash's value stems from its design. It is based on scarcity, built upon proven cryptography, and has gradually gained recognition as the cornerstone of digital currency privacy.
The rationale for investing in ZEC is based on three core pillars: timing, belief, and design.
Timing : Zcash's halving cycle is two times later than Bitcoin's, and its currency curve is similar to Bitcoin's, but it's in a more mature stage. Its most recent halving occurred in November 2024, a significant turning point in its issuance plan, with the annual inflation rate dropping from 12.5% to approximately 4.2%. This puts ZEC on the same structural path as Bitcoin's breakout phase in history. Bitcoin consistently struggled to maintain a price of $1,000 before its second halving, after which programmed scarcity began to dominate market dynamics. Zcash is now at the same juncture. The next halving will reduce the issuance rate to approximately 2%, after which the inflation rate is expected to fall below 1%, gradually converging with Bitcoin's long-term currency model.
This shift is occurring in an era where macroeconomic conditions are increasingly favorable to hard assets and self-custodied assets. Against the backdrop of surveillance, capital controls, and the rise of programmable money, privacy and scarcity are emerging as a unique asset class. Few assets can combine credible monetary design, established history, and structural scarcity at such an early stage of understanding.
Belief : Zcash is unburdened by venture capital, carries the baggage of ICOs, and is free from speculative funding driving short-term narratives. Its issuance is transparent and limited, with a natural distribution method. Those who hold ZEC after years of neglect deeply understand the protocol's significance. They are not profit-seekers or hype participants, but rather builders, cryptographers, and early adopters of free technology. This foundation makes Zcash more resilient during market downturns and more explosive during narrative shifts.
Design : Zcash is not an application chain, a layer-2 network, or a DeFi toolkit. It is a currency—a pure, privacy-preserving, and programmable currency. This simplicity gives it clarity and durability, setting it apart in a market rife with complexity. It conveys a language that institutions and individuals can understand: it has the architecture of Bitcoin, but remains invisible.
Market asymmetry and portfolio positioning
This section is based on Frank Braun's analysis, whose research at the intersection of offshore wealth and digital privacy assets provides an excellent quantitative context for understanding investment opportunities in Zcash.
Global assets are estimated at approximately $1,000 trillion. Gold has a market capitalization of $27 trillion, while Bitcoin has a market capitalization of $2.3 trillion—about 8.5% of the value of gold and only about 0.2% of global assets. In contrast, the total market capitalization of the entire privacy coin sector is only $12.6 billion.
This gap is particularly striking when compared to an estimated $10 trillion in undeclared offshore wealth, representing about 1% of global assets. The market value of all privacy coins combined is less than 0.1% of this pool of offshore wealth.
Historically, real estate has been a primary vehicle for storing hidden wealth, offering both opacity and returns. However, this channel is gradually closing. Global anti-money laundering ( AML ) regimes, stricter reporting standards, and digital regulation are making cross-border real estate and corporate structures increasingly transparent. As capital seeks new self-custodial, censorship-resistant forms of storage, programmable privacy networks like Zcash may become a digital alternative.
From a portfolio construction perspective, ZEC can play two unique roles. It is both a hedge against central bank digital currencies (CBDCs), capital controls, and the pervasive data capture in the modern financial system, and a high-beta asymmetric investment that returns to the founding principles of cryptocurrencies—self-custody and privacy as the cornerstone of sovereignty.
The potential demand is enormous. If privacy assets can capture 1% of global offshore wealth, the implied valuation of ZEC could approach $6,000 per coin. At 5%, the valuation would exceed $30,000; at 10%, it would exceed $60,000. These are not predictions, but frameworks—data that highlight structural asymmetries in a world where financial invisibility is disappearing.
Institutional funding inflows are still in their early stages, but attention is gradually shifting. After years of neglect, Zcash is once again a topic of discussion among influential investors and developers. Prominent figures like Naval Ravikant and Balaji Srinivasan have publicly emphasized its importance as a “stealth Bitcoin”—a scarce crypto asset designed for a surveillance-driven financial age.
Zcash isn't for everyone, but it doesn't need to be. Its goal isn't to compete with Bitcoin, but to complement it; to represent the hidden asset in a portfolio, while other assets are defined as visible.
In an era where the digital world is gradually moving towards full traceability, the most rebellious investment choice may no longer be leverage or returns, but privacy itself.
Summarize
Zcash is not just another digital asset. It does not compete on transaction volume, modular composability, or total value locked, nor does it attempt to position itself as a general-purpose infrastructure layer for decentralized finance. Zcash's mission is more focused and more radical.
It is committed to defending financial autonomy in an era of full visibility .
In a world where data has become currency, surveillance is embedded in infrastructure, and financial transparency is no longer an option, Zcash offers an alternative. It brings crypto cash to the digital age—an asset whose value transcends codebases, issuance curves, or cryptographic design. Its true value lies in what it defends: individual autonomy within an increasingly transparent financial system.
For years, Zcash has been ignored by the market. This wasn't because it failed, but because it refused to compromise. It consistently adhered to an idea the market wasn't yet ready to accept. But all that is changing. Demand for private currencies is rising, technological tools are maturing, and threat models are expanding.
Zcash's success doesn't depend on widespread adoption. It only needs to resonate with those who value privacy. In a world where privacy is no longer the default option, these people include not only activists or dissidents, but also a growing number of ordinary citizens who recognize that financial surveillance has become a reality. For them, Zcash is not just a speculative asset, but a safeguard against the recording and analysis of every transaction, action, and connection in the future.
Perhaps one day, stealth currencies will become indispensable. And when that day comes, Zcash won't need to evolve to fit the times. It will already be what the world needs.
If you'd like to explore this topic further, the following resources offer insightful perspectives on Zcash, privacy technologies, and the macro-environment shaping digital sovereignty:
Why a Small Allocation of ZEC Should Be Considered - Sacha
My Zcash Investment Thesis - Frank Braun
Zcash 2.0: Misconceptions about Unstoppable Private Money - Frank Braun
Disclaimer : The above content does not constitute any financial advice. It represents only my personal opinion and my chosen approach to these changes. Everyone's situation is different; please conduct independent research, maintain critical thinking, and make decisions that are appropriate for you.
