Zcash guide — optional privacy, with real caveats
Who this guide is for. For readers who know the Monero guide and are wondering whether Zcash (ZEC) is an alternative — for example broader exchange availability, or wanting to selectively prove a transaction later. Not a guide for readers who just want to pay privately without thinking about it — Monero's privacy-by-default is simpler for that.
Zcash guide
Who this guide is for. For readers who know the Monero guide and are wondering whether Zcash (ZEC) is an alternative — for example broader exchange availability, or wanting to selectively prove a transaction later. Not a guide for readers who just want to pay privately without thinking about it — Monero’s privacy-by-default is simpler for that.
What you gain, and what it costs
You gain the ability to make transactions strongly private (amount, sender, and recipient hidden) and, separately, the ability to selectively lift that privacy for whoever you choose via a “viewing key” — something Monero structurally cannot offer. Zcash also remains more broadly available on regular EU exchanges than Monero, which has been dropped from many major platforms in recent years.
The cost is that privacy on Zcash is optional, not the default. A significant share of all Zcash transactions is still fully public (transparent), and how much privacy you actually get depends on which address type you use and which wallet you choose. On top of that, the protocol had a serious, years-undetected bug in 2026 in exactly the component that makes privacy possible — see the caveat further down.
When this is overkill
If you just want to pay for something online without hassle, a debit card, cash, or a privacy-friendly prepaid route is more practical. And if you mainly want privacy you can’t accidentally “forget” to use, Monero’s privacy-by-default is simpler and more mistake-resistant than Zcash’s opt-in model.
What you should know before reading further
Two things that shape the rest of this guide, and that you shouldn’t stumble across buried in a caveat section at the bottom:
A serious bug in the shielded pool, May–June 2026. Since Orchard (Zcash’s current privacy system) activated in May 2022, its underlying cryptographic code contained a flaw — a check that was supposed to guarantee no fake ZEC could be created inside the shielded pool didn’t work as intended. Security researcher Taylor Hornby — at the time working as a paid consultant engaged by Shielded Labs specifically to hunt for this kind of bug — discovered this on May 29, 2026; the network temporarily disabled shielded transactions within days, and an emergency update (NU6.2) fixed the issue on June 3, 2026. There’s no confirmed evidence the bug was ever exploited — but Shielded Labs, the team behind Zcash’s privacy technology, has itself said this can’t be ruled out with certainty either, precisely because shielded transactions are deliberately untraceable by design. That’s not a minor footnote — it’s a direct consequence of how privacy-by-design works, and it belongs stated up front, not buried. As an added precaution, a later upgrade (NU6.3, late July 2026) permanently sealed off the old, potentially vulnerable shielded pool from before the patch, so any residual risk from that period is no longer relevant.
An organizational split among the developers. In January 2026, the entire engineering team at Electric Coin Co. (the organization that originally built Zcash) left the project after a disagreement with the governing foundation over the wallet’s future. The team formed a new, independently funded organization (ZODL) and took development of Zcash’s most popular wallet with them — it has since been renamed from “Zashi” to “Zodl.” See the Zodl review for the full background. The relevant point for this guide: Zcash’s development has seen more organizational turbulence over the past year and a half than Monero’s more stable, community-driven model.
Neither point means Zcash is now unsafe or unusable — the current protocol (after the NU6.2 patch) is technically sound. But an honest guide starts here, not with the sales pitch.
How Zcash technically handles privacy
Zcash uses zero-knowledge proofs (specifically, zk-SNARKs) — a cryptographic technique that lets you prove something is true without revealing the underlying data. A simple analogy: proving you know a safe’s combination without ever saying the combination out loud. Applied to a transaction: the network can verify a transaction is valid (the sender had the funds, no money was created out of thin air) without the amount, sender, or recipient ever becoming visible.
This system has gone through three generations:
| Version | Year | Trusted setup required? | Status |
|---|---|---|---|
| Sprout | 2016 | Yes | Legacy, rarely used |
| Sapling | 2018 | Yes | Still exists, but not the default |
| Orchard | 2022 (NU5) | No | Current standard |
Trusted setup was a real risk in the first two generations: a group of participants jointly generates secret cryptographic parameters that must then be destroyed. If even one participant had kept those parameters, they could in theory have counterfeited ZEC undetected. This was mitigated at the time through carefully run multi-party ceremonies, but it remained a theoretical weak point Monero has never had. Orchard (2022) removed this problem — it uses a newer proving system (Halo 2) that requires no trusted setup at all. New Zcash transactions through the current default address type no longer carry this risk.
Transparent, shielded, and “Unified Addresses” — untangling the address landscape
This is where Zcash gets genuinely confusing for beginners, even in the official documentation:
- Transparent address (t-address): works like a Bitcoin address — sender, recipient, and amount are all openly visible on the blockchain.
- Shielded address (z-address): amount, sender, and recipient are encrypted. Two separate “pools” exist — an older one (Sapling) and a newer one (Orchard) — that are technically distinct.
- Unified Address (UA): the current default format, introduced in 2022. A single address that bundles multiple types behind it (transparent, Sapling, Orchard) — the sending wallet automatically picks the most private option it supports. Think of it as a universal travel adapter: you don’t have to pick the type yourself, the technology handles that.
The practical rule of thumb: use a wallet that shows only shielded (Orchard) addresses by default — not every Zcash wallet does this. The Zodl review covers what this actually looks like in practice.
The “turnstile” — why moving between transparent and shielded leaves a trace
Funds moving from a transparent address to a shielded one (or back) pass through what Zcash itself calls a “turnstile.” The total amount entering and leaving the shielded pool is publicly visible on the blockchain, even though individual shielded balances aren’t. That means: if you buy Zcash on an exchange (transparent) and then shield it, that moment of crossing is itself a point of correlation — and the same applies in reverse if you move shielded ZEC back to a transparent address to sell it. The less often you cross that boundary, the less metadata you leave behind.
Zcash vs Monero — a fair comparison
| Monero | Zcash | |
|---|---|---|
| Privacy by default | Yes, always, no choice needed | Optional — depends on address type and wallet choice |
| Share of shielded transactions | Near 100%, by design | Growing but partial: roughly 30–59% of transactions, about 30% of total ZEC supply (2026) |
| Ever required trusted setup | No, never | Yes, for Sprout (2016) and Sapling (2018); no longer since Orchard (2022) |
| Recent serious bug | No comparable finding | May 2026: 4-year-old flaw in the shielded-pool code, patched June 2026, exploitation can’t be ruled out with certainty |
| Selective disclosure (viewing key) | Structurally not possible | Possible — a real difference for readers who sometimes need to prove where funds came from |
| Availability on EU exchanges | Heavily restricted — dropped from many major platforms | Still broadly available (Kraken, Coinbase, Bitvavo, Binance), but with an uncertain future (see below) |
| Mining with ordinary hardware | Yes, realistic (RandomX, CPU-friendly) | Not realistic — Equihash is now dominated by specialized ASIC hardware |
| Merchant acceptance | Limited (~1,600 known locations) | Even more limited in direct acceptance, with one notable exception: the Flexa integration lets shielded ZEC be spent at thousands of stores in the US/Canada |
| Development and governance | Community-driven, stable | Recent split: core team left for a new organization (ZODL) in early 2026 |
Neither wins across the board. Monero is the simpler, more mistake-resistant choice if financial privacy is your goal and you don’t want exceptions. Zcash is more relevant if you specifically want the combination of “mostly private, but with the ability to prove it on my own terms” — for example, readers who sometimes need to demonstrate to an accountant, counterparty, or regulator that funds are legitimate, without exposing their entire transaction history.
Buying Zcash
Via a KYC exchange
Unlike Monero, Zcash is still available for purchase on the regular exchanges most Dutch/EU users already use: Kraken, Coinbase, Bitvavo, and Binance all still listed ZEC as of mid-2026. Note: some exchanges restrict withdrawing to a shielded address in certain regions — check with your exchange first, as this changes.
Peer-to-peer
As with Monero, direct peer-to-peer trading remains the most private route to acquire Zcash without a KYC link, but it requires more caution on your part and is less standardized than an exchange purchase.
Mining
Technically possible (Equihash algorithm), but not realistic for an individual with ordinary hardware. Unlike Monero’s CPU-friendly RandomX, Zcash mining is now dominated by specialized ASIC hardware; GPU mining barely breaks even, and CPU mining isn’t profitable at all.
Using Zcash for payments
Direct merchant acceptance is more limited than Monero’s — don’t expect to simply pay at an ordinary Dutch shop. The one notable exception is the Flexa integration: through the Zodl wallet, you can spend shielded ZEC directly at thousands of physical stores in the Flexa network (mostly US, Canada, El Salvador) without the merchant seeing your identity or even that Zcash was used. For Dutch/European readers this is mainly relevant while travelling, not for everyday use at home.
Practical privacy — what Zcash doesn’t solve
IP address: Zcash protects the content of a transaction, not your network traffic. Zcash’s own documentation explicitly warns that your IP address can be linked to shielded transactions if you use a third-party node. Tor support exists at the node level (via the Zebra software), but it isn’t on by default.
Exchange linkage still exists. If you buy Zcash on a KYC exchange, that exchange knows you bought ZEC — regardless of what you do with it afterward. Shielding only protects what happens after that point, not the origin itself.
The turnstile boundary (see above). Every crossing between transparent and shielded is itself a visible moment on the blockchain.
Recipient cooperation. As with Monero: if the recipient of a shielded payment reveals their own identity and cooperates with an investigation, they can confirm that you paid them.
Zcash and the law in the EU
The EU’s anti-money-laundering regulation (AMLR, Regulation (EU) 2024/1624 — part of the broader EU AML Package, which aligns with MiCA but is a separate legislative track) prohibits, in Article 79, banks, payment institutions, and crypto-asset service providers from offering anonymous accounts from 10 July 2027 onward, including accounts that enable anonymity via “anonymity-enhancing coins.”
The regulation defines that term itself, in Article 2: crypto-assets with built-in features designed to make transfer information anonymous, “systematically or optionally.” That last word is exactly why this matters for Zcash, even though the text names no specific coins: Zcash’s shielding is optional by definition, and the law explicitly covers that case too — not only coins where privacy is mandatory, like Monero. There’s currently no official, definitive list of which coins this covers; in practice that gets filled in by regulators and exchanges, not fixed in advance per ticker.
Important to keep clear: this prohibition targets regulated institutions — banks and crypto-asset service providers (CASPs) — not the technology itself. The regulation’s own explanatory recitals explicitly state the prohibition does not apply to providers of hardware, software, or self-hosted wallets, as long as they don’t themselves have access to or control over those wallets. In other words: this is a restriction on what regulated parties may offer their customers, not a ban on owning, self-custodying, or using privacy-preserving cryptography peer-to-peer. That distinction — targeting the access points rather than banning the underlying technology — is exactly why this kind of regulation rarely stops what it’s aimed at: it makes the regulated route harder, not the underlying capability impossible.
Practically, for now (mid-2026): Zcash, unlike Monero, is still readily available on regular EU exchanges. Whether that’s still true after 10 July 2027 depends on how exchanges end up applying “anonymity-enhancing” in practice to a coin with optional privacy — that’s not settled yet. No need for alarm, but worth watching if you’re planning around it long-term.
Conclusion
Zcash isn’t “Monero with a marketing problem,” nor is it an outdated attempt at privacy — it’s a different tradeoff. The technology behind Orchard is, since the NU6.2 patch, technically sound, and eliminating trusted setup removed a real historical weak point. The ability to selectively disclose is a structural advantage Monero can’t offer, and broader exchange availability makes it more practical for many readers to actually acquire.
But the honest caveats carry real weight too: privacy is optional rather than default, a significant share of the network is still transparent, the recent bug in the shielded-pool code is a genuine trust incident (even without confirmed exploitation), and the development team just went through an organizational split. For readers who want privacy-by-default with no exceptions, the Monero guide remains the simpler, more mistake-resistant route. For readers specifically looking for the combination of mostly-private-with-the-option-to-prove-it, Zcash is a serious option, but not a carefree one.
Next step
Choosing a Zcash wallet
- Zodl review — the leading Zcash wallet (formerly Zashi), including the background on the rename and the organizational split
Comparing with the alternative
- Monero guide — privacy-by-default with no exceptions
Further privacy
- Privacy DNS guide — network privacy alongside financial privacy