With cryptos hitting all sorts of multi-year or all-time records, it’s reasonable to conclude that few investors are now pondering over their associated blockchain technology. Who can fault them if it is all about money? With bitcoin (BTC) breaking beyond the $40,000 barrier (albeit it has since been corrected), the cryptocurrency industry has entered a new era. As a result, alternative cryptocurrencies (altcoins) such as Zcash (ZEC) are particularly appealing.
Do you prefer 1 BTC or 513 Zcash coins?
Cognitively, many investors would choose to possess complete units of assets rather than fractional shares. With Bitcoin reaching far into the five-digit range, this is a prospect that only a small number of individual investors can afford. Zcash, on the other hand, is a unique beast. At the time of writing, ZEC is now trading for slightly under $80 at the time of writing (subject to extreme change by the time you read this). Call it whatever you want. 1 BTC or 513 Zcash is of equal monetary value. However, there is something special about possessing 500 units of something rather than one.
Aside from the psychological “worth,” smaller, more practical denominations emphasize ZEC’s core promise. Zcash mainly serves as a next-generation alternative to monetary operations. All transaction-based information, including bitcoin, is logged on the blockchain. That information, unlike bitcoin, is not publicly conveyed, assuring the utmost security and privacy.
On the exterior, Zcash appears to be comparable to Monero (XMR). It is the “bad boy” of the cryptocurrency industry. It is due to its unique design that anonymizes activities on its blockchain. Unsurprisingly, this has made Monero a target for regulatory organizations. However, lumping ZEC into the same group would be unjust. As per ZEC’s official website, its design includes “Selective disclosure tools within Zcash”. This “enable a participant to disclose some transaction data for compliance or audit reasons.”
Additionally, Zcash transactions are free of charge. In the future, this could contribute to kickstarting the microtransaction business. It is possible when the developing markets to growing and frontier economies are favored. Nonetheless, there’s the lingering question of whether ZEC is a good investment.
Buyer beware! I’m not joking
Like any cryptocurrency-related venture, one must comprehend these two key words. One recognizing the enthusiasm that has engulfed various capital markets. Everything, from stocks to commodities to cryptocurrencies, appears to be on the rise.
Unfortunately, The blockchain swept away many individuals. For example, I recall reading about John Kim, an entrepreneur who liquidated everything to jump all in on litecoin (LTC). He did so in 2018, just as the bitcoin industry was ready to undergo a long winter.
Unsurprisingly, Kim acknowledged that he had some “dark moments.” That is not a joke, brother. Kim seems to be doing considerably better, as per the report, and he may wind up being the last one laughing. But sincerely, don’t do that. Please?
Anyway, that is a long-winded—but perhaps instructive—way of emphasizing that virtual currencies are still in the Wild West. Zcash is in no way an exception. However, where ZEC stands out is in its reaction to the bitcoin sympathy game. As you might expect, many altcoins have a strong direct association with bitcoin: as BTC rises, so do certain altcoins and vice versa.
ZEC, on the contrary, formerly had a significant association with bitcoin. The two assets had a 71 percent correlation coefficient from the first three months of 2018 to the second quarter of 2019. That’s a substantial ratio. However, the link declines significantly after the third quarter of 2019. And the relationship is essentially inverse from Q3 2020 up until the time of writing.
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