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Electric Coin Company (ECC), the development team behind Zcash, announced the release of Zcashd version 5.5.0 late Thursday.
Zcash, an implementation of Zerocoin, was initially based on an open-source code mostly borrowing from Bitcoin at its launch in 2016. The Zerocoin protocol was designed to allow Bitcoin users to mint coins without transaction history – a feature that makes it untraceable. However, the protocol had limitations and required users to trust a centralized setup. Zcash was conceived to address these limitations using Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK), which allows for private transactions without the services of a trusted entity.
The zk-SNARK integration to the ZKP toolkit made it possible to veil transaction contents even on a public blockchain. Worth noting, Zcash was specifically forked from the Zerocoin protocol and then later implemented zk-SNARKs to improve upon its privacy and anonymity features.
Zerocoin and zerocash
The Zerocoin protocol was initially proposed in 2013 by researchers at Johns Hopkins University as a way to provide anonymous ‘shielded' transactions on the Bitcoin blockchain. Zerocash, on the other hand, is a more recent protocol proposed in 2014 as an extension of Zerocoin and was later implemented in the cryptocurrency Zcash. The Zcash community voted to transition the project from a centralized development structure to a more decentralized, community-driven model in March 2017. This involved the creation of the Zcash Foundation, a non-profit organization that oversees the development and governance of the project.
Zcash has undergone several upgrades and changes over the years. The Zcash team initially launched the cryptocurrency with a “founders' reward” mechanism, which allocated a portion of newly mined ZEC to the project's creators for the first four years. In 2017, the project saw a series of minor updates, including improvements to the wallet user interface (v1.0.11) and the consensus rules (v1.0.12) released in June 2017.
The first notable upgrade, ‘Overwinter' v1.1.0, shipped almost a dozen months later in June 2018, adding support for new features such as replay protection and versioning, as well as improvements to network security and performance. The ‘Sapling' upgrade v2.0.0 followed in October, significantly improving transaction efficiency and reducing the size of zk-SNARK proofs, making shielded transactions more accessible and efficient. In December 2019, the project released ‘Blossom,' the third upgrade, which increased the maximum block size and reduced block times. The Heartwood and Canopy upgrades came in 2020, the former in July and the latter in November.
Last May, Zcash activated ‘NU5', the sixth major upgrade, which moved Zcash to the Halo proving system. The creators also revised the nomenclature convention, shifting from a theme-based to a number system, with the proposal going into effect then. This week, the Zcash team released a new version of the full node software.
Notable changes in the latest software release
In addition to fixing bugs, v5.5.0 will include a ‘proportional fee mechanism' to resolve occurrences of high transaction load. This change will benefit users of third-party wallets who have previously been inconvenienced by high network load.
The proportional fee mechanism refers to a model where the fees incurred by a user depend on the transaction's size. Transactions considered ‘large' cost the user more in terms of fees charged. Creators and service providers prefer this mechanism because it allows them to earn higher revenue from more significant transactions while charging a reasonable fee for smaller transactions. However, it can burden customers who conduct large transactions frequently, as the fees can pile up quickly.
The new software version also lays the groundwork for fast balance readiness allowing Zcash users to spend funds before a wallet is fully synchronized. Zcash requires a certain number of confirmations before a transaction can be considered final and the funds available for spending. This confirmation time, defined as fund availability, ensures the transaction is valid and the funds cannot be double-spent. Fund availability on Zcash takes into account the time it takes for newly created Zcash tokens (ZEC) to become available for spending after being mined or received from a transaction.
“Much of this work lays the foundation for the fund availability features coming with the next release. Those features will provide the ability to spend funds before a wallet is fully synchronized.”
The Zcash protocol team asked node operators to upgrade to the new release entailing RPC changes and feature deprecations. RPC changes include the removal of “priority” estimation and other changes to ‘transaction fee selection', ‘block template construction', and ‘transaction relay policy'. Deprecated features will remain available by default for 18 weeks, after which they will be disabled.
To learn more about Zcash, check out our Investing in Zcash guide.
Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.