Zcash is expected to undergo its first halving in mid-November this year. An event, which, like Bitcoin, is intended to halve the rewards received by miners on the network. However, there is an additional aspect to Zcash's first halving, which will leave founders without their share of the reward.
Zcash, a cryptocurrency focused on user privacy and anonymity, was launched in 2016 based on the Bitcoin protocol. Therefore, the phenomenon known as “cash staking” also takes place within its network.halving”. Which is intended to halve the reward that nodes receive for mining within the network.
The Zcash halving is scheduled to occur every 4 years, just like Bitcoin. This reduction is also scheduled to occur automatically every time 840.000 blocks are mined within the Zcash network. However, due to a update in its protocol, The development team decided to extend Zcash's first halving to block 1.046.400. Therefore, it is estimated that the first halving of this cryptocurrency will take place by mid-November of this year. An event that will reduce the current reward from 6,25 ZEC to 3,125 ZEC.
Meanwhile, while Zcash and Bitcoin have a completely different approach, the privacy cryptocurrency shares another similarity with Bitcoin. Zcash's supply is limited to an emission of 21 million ZEC, just as Bitcoin is limited to 21 million BTC. However, at present, the inflation that Zcash suffers from is considerably higher than that of this and other major cryptocurrencies in the market.
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What is Zcash and what does the Founders Reward mean?
Zcash is a cryptocurrency Created with a focus on the privacy and anonymity of users on the network. This cryptocurrency allows operations and transactions to be carried out while guaranteeing the confidentiality of users. For this, it uses zero-knowledge proofs. ZK-snarks. That allow you to demonstrate possession of information without having to reveal it at any time.
On the other hand, Zcash uses a mechanism called Founders Reward. This is a means through which the entire team behind the development of the cryptocurrency receives 10% of the miners' rewards. Something that may seem unfair to many, since they may think that it is the miners who do all the mining work, investing their resources. However, this reward to the founders is what allows the team to finance all the development and research that is carried out to improve the characteristics of the cryptocurrency.
Thus, this reward is intended to be distributed fairly and equitably among all participants in the company. Electric Coin Company. Creator of the protocol under which Zcash operates, and in which it continues to innovate its development. However, when the first Zcash halving takes place, this reward to the founders will be disabled, leaving 100% of the network rewards to the miners.
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Halving is expected to reduce the inflation rate
As of this writing, Zcash's inflation rate is one of the highest on the market. Compared to the inflation rates of major cryptocurrencies, as can be seen in the chart below, ViewBaseZcash has an inflation rate of 28,30%. An inflation rate that far exceeds that of other cryptocurrencies, such as Bitcoin or Ethereum.
Source: ViewBase.com
This inflation rate in Zcash has been one of the main causes of concern for cryptocurrency investors. In addition, high-ranking analysts such as Josh Olszewick He even compared this inflation rate to that of a country, claiming that if Zcash were a nation, it would surely rank 8th with the highest inflation rate.
For his part, the renowned economist, Alex Kruger, also tweeted on his official account that Zcash and its disproportionate supply in the market led the cryptocurrency to have a chaotic performance for almost all of 2019.
Still, it is hoped that the first Zcash halving, which will reduce the coin issuance, will also bring its current inflation problems under control. Experts agree that by cutting the current issuance in half, concerns about Zcash's inflation rate may become less of a problem.
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