Zcash (ZEC), a privacy-centered altcoin has surged over 30% in the past 24-hours, rising from a daily low of $154 to $188. The sudden spike in price in the altcoin at a time when the majority of the market is still recovering from last week’s correction is being attributed to the major mining consensus upgrade and to some extent Barry Silbert, the CEO of the Digital Currency Group which is the parent company of world’s largest digital asset manager Grayscale.
Electric Coin Company, the development company behind Zcash released a new roadmap yesterday with a plan to focus on developing a native wallet, integrating interoperability features, and moving from a Proof-of-Work (PoW) to Proof-Of-Stake (PoS). While PoW is considered highly secure and decentralized in comparison to PoS, the recent controversy and focus around the energy consumption by the Bitcoin network has made several blockchains move towards the PoS.
While PoS claims to help with scalability and energy consumption, Bitcoin proponents believe only PoW fulfil the true sense of decentralization. Thus, the announcement caused a huge uproar on social media. Silbert only added fuel to fire by comparing it with the likes of Bitcoin given ZEC also has a limited supply of 21 million tokens.
Silbert went on to add a follow-up tweet reflecting upon the negative comments that his last tweet got, and said since people are hating on ZEC so much, he will buy some more.
Can Major Upgrades on ZEC Help it Climb Out of Price Slumber?
ZEC might have spiked sharply in the wake of the new development roadmap, but it is still very far from its all-time-high above $5,000. The privacy coin is currently trading at $178.94 and hasn’t crossed the $1,000 mark in five years. While the majority of the cryptocurrencies have set new ATHs breaking the 2017 bull run high, ZEC seems to be in a long price slumber.
The move to PoS has helped Ethereum to rise to new highs, and ZEC proponents believe the major upgrade plan for the upcoming three years would help the privacy coin further.
ZCash surges 7% after Digital Currency Group CEO announces $85M purchase
Digital Currency Group CEO and founder Barry Silbert has purchased more ZCash to add to his company’s coffers as the price of the token moved above $240 for the first time in days.
In a Wednesday tweet to his more than 678,000 followers, Silbert announced the purchase of $85 million in Zcash (ZEC), or roughly 376,106 tokens assuming an average price of $226. The buy is just the latest for Silbert, who seems to be portraying himself as a contrarian in the crypto market — responding to negative comments on ZEC by purchasing millions more.
According to data from Cointelegraph Markets Pro, the price of ZEC surged more than 7% following Silbert’s announcement, from $226.08 to $243.84. However, it has fallen more than 20% since reaching a six-month high of more than $300 on Thursday, shortly after its core protocol’s transition from proof-of-work to proof-of-stake.
Crypto whales like Silbert may be buying ZEC in anticipation of more of the project’s tokens going out of circulation due to lockup periods. Zcash’s main developer, Electric Coin Company, announced on Friday that users would be able to stake a portion of their holdings into a dedicated ZEC smart contract to become validators on its blockchain.
Digital Currency Group operates Grayscale, a $53.5 billion AUM digital asset manager th offers investors exposure to cryptocurrencies through its trusts. The firm first listed its Grayscale Zcash Trust on the OTCQX Best Market in October. Silbert has also hinted that the company is making plans to convert its Bitcoin Trust into a spot-settled Bitcoin exchange-traded fund.
Zcash Extends Rally After Proof-of-Stake Plan, Twitter Shills
The privacy-focused cryptocurrency zcash (ZEC) is being noticed by traders again after a rally of more than 50% over the past week. The rally followed news from last week that the coin will switch to a proof-of-stake consensus algorithm.
At 14:27 UTC on Wednesday, ZEC was up 22.7% over the past 24 hours and 56% for the past week, trading at a price of USD 261.
Despite the strong gains in recent days, however, zcash is still far away from its 2018 high of nearly USD 800.
The coin has also ended up somewhat in the shadow of monero (XMR), another privacy-focused coin with a significantly larger market capitalization.
The gains today come after Electric Coin Company, the organization behind zcash, last week launched a new roadmap for development and said they will move the cryptocurrency to a proof-of-stake (PoS) consensus algorithm, from previously relying on proof-of-work (PoW).
The PoS consensus mechanism has become more popular in recent years, with proponents arguing that it is a more environmentally friendly way to secure cryptocurrency networks than the more energy-intensive PoW model.
In addition to transitioning to proof-of-stake, the organization also said it will release a new wallet that will leverage the new consensus algorithm, and that cross-chain interoperability across Web 3 protocols will continue to be an area of focus.
“In this internet, ZEC will be a critical means for economic good and used in solutions that protect privacy and liberties,” Electric Coin Company said about its vision for ZEC’s place in tomorrow’s Internet.
Following the release of the new roadmap, the coin has received public attention from some heavyweights in the crypto industry. Among them was CEO and founder of Digital Currency Group, Barry Silbert, who retweeted and shared a number of bullish takes on the cryptocurrency as of late.
In particular, Silbert appeared to focus on what he called other people’s “hate” towards the coin:
reverse psychology. smart— Barry Silbert (@BarrySilbert) November 24, 2021
Moreover, he also said that all of the hate has only made him want to buy more:
It is worth noting, however, that Silbert’s firm already has an interest in attracting investors to zcash via its Grayscale Zcash Trust, a publicly traded investment vehicle in the US.
In addition to the positive comments from Barry Silbert, however, whistleblower and privacy advocate Edward Snowden has also praised zcash publicly in recent days, saying on Twitter that it is “a decentralized, functional chain with a specific (and useful) purpose.”
Snowden added that zcash enables private transactions “extremely well,” and that the coin in his view “meaningfully advanced what cryptocurrency could DO.”
ZEC price jumps 20% in one day as Zcash devs unveil transition to Proof-of-Stake
Zcash (ZEC) surged by nearly 20% in the past 24 hours, helped by the euphoria surrounding its core protocol’s decisive transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
The ZEC price logged an intraday high at $188.80 on Binance after rising two days in a row by more than 27%. The cryptocurrency’s move upside also wiped out a big portion of the losses it had faced earlier this week, in the wake of a downside retracement across the crypto market.
ZEC price jumped after the cryptocurrency’s main developer, Electric Coin Company (ECC), announced that it would move Zcash’s protocol from PoW to PoS within the next three years. The nonprofit noted that the upgrade would limit the ZEC price’s downward pressures by removing miners that “immediately liquidate” the token for Bitcoin or fiat.
“This shift will also increase the utility for ZEC through capabilities that include yield generation through staking and a possible path to on-chain governance mechanisms for ZEC hodlers,” added Josh Swihart, the senior vice president of growth at ECC, adding:
“There are other benefits of moving to proof of stake which include the reduction of the ZEC energy footprint, providing a possible path to on-chain governance mechanisms, and support for interoperability by addressing problems with proof-of-work transaction finality, among other reasons.”
ZEC bulls cashing on the PoS FOMO
Unlike PoW, PoS mechanisms allow a person to mine or validate block transactions based on the number of underlying tokens they hold/stake. In return, the so-called “validator” receives rewards in the form of yields.
Ethereum, the leading smart contracts platform by market cap, also initiated its transition from PoW to PoS after introducing a dedicated smart contract. In response, users locked about 8.33 million Ether (ETH) tokens into the so-called Ethereum 2.0 address, effectively pushing them out of active supply.
ECC’s announcement promised that users would be able to stake a portion of their ZEC holdings into a dedicated Zcash smart contract to become validators on its blockchain. Therefore, as a result, more ZEC may end up going out of active circulation due to lockup periods, against its Bitcoin-like fixed supply of 21 million tokens.
Barry Silbert, the founder, and CEO of Digital Currency Group — a venture capital firm tweeted Saturday that he would “buy more” Zcash tokens, citing their supply cap. His tweet coincided with a sudden ZEC price rise against the U.S. dollar and Bitcoin (BTC).
Nonetheless, some analysts argued that Zcash would not have a supply cap after implementing PoS.
For instance, on-chain analyst Willy Woo noted in his response to Silbert’s tweet that if Zcash could “decide to extend the dev tax,” and “if it can switch to PoS and cut out the miners,” then he is confident that the cryptocurrency does not have a maximum supply.
“And,” Woo added, “that’s ignoring the inflation bug of 2018 and assuming we could in fact audit the supply,” referring to the Zcash’s infamous vulnerability that could have created infinite ZEC tokens.
Minutes after Woo’s remarks on ZEC’s doubtful supply ca, Silbert tweeted:
ZEC’s latest push upside made it enter an inflection zone, prominent for its record of capping the cryptocurrency’s rallies.
Specifically, the trading range defined by $170-$205 (the reddened area in the chart below) has earlier provided selling opportunities for traders. Even recently, the ZEC price retreated lower after entering the said range while eyeing extended declines toward the purpled upward sloping trendline.
A clear breakout trend may appear after ZEC closes above the inflection zone, accompanied by rising trading volumes, thus targeting the Fibonacci retracement levels at $247 and $316. Conversely, a decisive close below $170 may risk sending ZEC toward $136.