The Zcash cryptocurrency (ZEC) needs to abandon the Proof-of-Work consensus algorithm in favour of a more energy-efficient and environmentally friendly Proof-of-Stake. The proposal was advanced by the founder and head of the company behind the project’s development, Electric Coin Company (ECC), Zooko Wilcox.
Switching #Zcash to proof of stake offers huge improvements to the utility, security, and decentralization of the Zcash network and to the utility and demand for the $ZEC coin. From @zooko: https://t.co/qgCa5w227T
— Electric Coin Company 🛡️ (@ElectricCoinCo) August 3, 2021
Wilcox described the Proof-of-Stake algorithm as not only more efficient but also more secure than Proof-of-Work. In an interview with Forbes, he noted:
“I believe that Proof-of-Work suffers from some security gaps, as demonstrated by 51% attacks. I think Proof-of-Stake could provide a higher level of security at lower costs.”
He explained that in PoW-based systems users have a fairly modest set of tools to defend against attacks. PoS networks, by contrast, allow identifying an attacker and freezing their tokens, giving the rest of the blockchain the ability to operate normally.
Wilcox stressed that his proposal is not driven by ecological concerns, although mining of PoS-based cryptocurrencies causes less environmental harm. The developer proposed updating ZCash because he believes this algorithm is, in general, more efficient.
He also noted that the PoS concept has already been proven and the mechanism is no longer experimental. As examples, the ECC head pointed to the blockchains Algorand, Cardano and Tezos.
Wilcox outlined the main advantages of moving ZCash to Proof-of-Stake:
- PoS will reduce downward pressure on the ZEC price and make the cryptocurrency more useful;
- The energy efficiency of PoS is higher than PoW;
- PoS is more secure, and its use is less costly;
- PoS enables a larger number of ZEC holders to become users of ZEC — they will be able to participate in staking and other network-enabled economic activity;
- PoS will boost demand for ZEC, as the algorithm supports ‘innovative use cases’;
- with the transition to PoS, community participants will have a say — ZEC holders will be able to participate in governance of the protocol;
- PoS networks are more decentralised, resilient to takeovers and attacks, and also egalitarian.
“I believe that the transition of ZCash to PoS offers many meaningful improvements in terms of usefulness, security and decentralisation of the network, as well as for the usefulness and demand for the ZEC coin,” concluded Wilcox.
The privacy-focused cryptocurrency Zcash sits at 72nd place in CoinGecko’s ranking with a market capitalization of around $1.29 billion. At the time of writing, the price of ZEC is around $113.
As of October 1, 2021, Halo Arc fork is planned in the ZCash network, which includes updates to the consensus node, the ECC wallet prototype, and a suite of development tools.
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