- Zcash (ZEC) completes its first-ever halving at block number #1,046,400
- ZEC price is 21% up in the past two weeks.
- What’s the future for ZEC miners and its price dynamics?
Privacy-enabled blockchain, Zcash (ZEC) completed its first-ever halving process at block number #1,046,400 on November 18, 2020, at 12:34 PM GMT. The halving will see the total miner reward reduced per block from 6.25 ZEC to 3.125 ZEC. This represents a cut on the annual inflation from 25% to 12.5%, a move that some believe has pushed the price of ZEC 21% in the past two weeks.
ZEC completes its first-ever halving
After forking from Bitcoin (BTC) in 2016, ZEC completed its first-ever halving at block #1,046,400, marking a successful year so far for development on the privacy blockchain. Zcash is a blockchain built to protect the users’ anonymity during transactions using the zero-knowledge cryptography, zk-SNARKS.
Transactions on public blockchains such as Bitcoin and Ethereum raise an issue of privacy for users who do not want them broadcasted. According to a statement by Messari’s Ryan Watkins, trying to anonymize the public crypto transactions using mixers only does half the job in protecting your privacy.
“Storing your assets in transparent addresses and attempting to ‘anonymize' them through technologies like mixers only to return to transparent addresses doesn’t solve this issue,” he explains in a tweet.
Privacy coins such as Monero and Zcash, however, allows you to both transact and store your crypto privately, which preserves your anonymity at all times. Despite being one of the most hyped cryptocurrency at launch, ZEC price has collapsed over 99% to its current trading price; $5,352 back on Oct 24th, 2016 to currently priced at $62.46.
Can the halving save ZEC price?
The first halving is expected to change ZEC's collapsing market, changing its fortunes as the inflation rate reduces. Trading at $62 as of writing, dropping 3.79% over the past 24 hours.
Is the halving the solution for the dropping prices on ZEC’s market?
Watkins does not think reducing miners’ mining pressure is the cause of ZEC’s failing market.
“Assuming miners sell all their ZEC as they mine it, they still have only historically made up less than 5% of ZEC daily trading volumes over the past year,” he tweeted. “The measure isn't perfect, but it’s a good enough proxy to show that miners may not be what's holding ZEC back.”
However, the halving is set to bring in sound money policies into the ZEC mining procedure –reducing inflation and strengthening the cap on money supply, set at 21 million ZEC.
“Fixed supply cryptocurrencies like Zcash and Bitcoin aren’t interesting because their issuance rate halves every four years; they’re interesting because their issuance schedule is predictable and deterministic,” Ryan concludes.
Founder’s reward also slashed
Apart from the block reward halving, Zcash will also see the Zcash Founder's Reward's sun-setting. This reward saw the top team-leading Zcash development, including the Electric Coin Company (ECC), ECC founders and vested employees, Zcash Foundation, and other employee compensations, receive a collective 20% of the total block reward.
Following the halving, miners are set to continue receiving 80% of the block rewards while the remaining 20% of rewards to be shared between the new Major Grants Fund (8%), ECC (7%), and the Zcash Foundation (5%).