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Zcash - Digital Currency And Software

Zcash - Digital Currency And Software.

Spend it, save it or send it to a friend. Unlike many other forms of payment, Zcash shielded transactions keep all your financial information private and in your control.

Zcash is a cryptocurrency aimed at using cryptography to provide enhanced privacy for its users compared to other cryptocurrencies such as Bitcoin, on which it is based and shares many similarities with, such as a fixed total supply of 21 million units.

Transactions can be "transparent" and similar to bitcoin transactions in which case they are controlled by a t-addr, or they can be "shielded" and are controlled by a z-addr.

This cryptocurrency should be of interest since I began this article which took almost ( 2h ), now its value almost increased 3USD from when I started until I stopped and published it.

Shielded transactions:

A shielded transaction uses a type of zero-knowledge proof called zk-SNARKs, which provides anonymity to the coin holders in the transaction. Zcash coins are either in a transparent pool or a shielded pool.

Zcash was the first project to implement zk-SNARKs, a novel form of zero-knowledge cryptography that gives its users the strongest privacy available in any digital currency.

"In May 2022, Zcash introduced the Orchard shielded payment protocol, which utilizes the Halo 2 zero-knowledge proving system. Halo is a new zk-SNARK that’s finally capable of solving two outstanding issues in Zcash: removing the trusted setup while hitting performance targets and supporting a scalable architecture for private digital payments."

Zcash was the first widespread application of zk-SNARKs, a novel form of zero-knowledge cryptography. The strong privacy guarantee of Zcash is derived from the fact that shielded transactions in Zcash can be fully encrypted on the blockchain, yet still be verified as valid under the network’s consensus rules by using zk-SNARK proofs.

Shielding Funds Security tips:

One of the most important ways to maintain financial privacy with Zcash is by holding a certain amount or all of your funds in a shielded address. The more funds held in shielded pools, the greater the overall privacy of the network.

Privacy Protection Best Practices for Shielded Zcash:

  1. Store more Zcash on a shielded address than is need for any single transaction.
  2. Do not leak metadata such as the tx id, tx amount, or counterparty information as they can be used to create linkages.
  3. Do not share viewing keys without understanding the privacy implications of doing so.

Transaction linkability is the ability to connect unique transactions to an individual address or group of addresses through monitoring activity on-chain. Partial and fully shielded transactions help mitigate and greatly reduce transaction linkability but people should still be mindful of meta-data leakages.

Prevent Network Graph Analysis:

Always use a non-free, no-log VPN and change IP-address if you decide to do some transactions whether open or shielded

A unique IP address can allow network observers to correlate your Zcash transactions with each other and with your other traffic. Zcash is a global network using IP addresses over TCP for maintaining connections between nodes and does not obfuscate users’ IP addresses.

Users should be aware that when an adversary knows a person’s IP address, other private details can easily be discovered (names, locations, business interests, etc). For example, in Zcash, correlations can be made between transactions sent from shielded addresses and those sent from transparent addresses.

Additional recommendations:

The transaction fees are publicly visible for all transactions, so when using a shielded address it’s best for privacy to rely on a privacy-focused wallet to select a fee rather than to select them manually.

While it is safe to reuse one shielded address for receiving payments for a single purpose (e.g. donations to a non-profit), using one shielded address to receive payments for multiple purposes (e.g. a business service and donations to a non-profit), makes it possible for someone to compare the contexts where the address is used and build an identity profile.

Be aware of IP linkability between transactions sent from shielded addresses and your other network traffic.

For advanced Linux users:

Advanced Linux users may use Tor to obfuscate the IP address of their Zcash node and it that case NordVPN is recommended as it has Onion Over VPN that works as a standard server, however, traffic is also then routed through the Onion network as well, again, adding an extra layer of security.

Warnings & Recommendations:

  • Wallet encryption is disabled ( should be enabled ) and always use full-disk encryption or at the very least ( encryption of your home directory) to protect your wallet.
  • Ensure no other users have the ability to execute code (even unprivileged) on the hardware your zcashd process runs on, unless you have fully analysed your operational security.
  • Make regular backups of your wallet.
  • Do not change the default setting that only allows RPC connections from localhost.
  • Use a minconf of 15 (minimum number of confirmations) to defend against potential blockchain reorganizations (note: zcash may increase this number if ongoing research reveals notable risks).
  • Setting the-debug=zrpcunsafe configuration is helpful for diagnosing issues, but "the log will contain private information", so be careful when sharing the contents of it with others. If this is too much liability, use -debug=zrpc instead.
  • When you send a transaction, your node sends the transaction to other nodes that are part of the Zcash peer-to-peer network.By observing that your node was the first to broadcast the transaction, those nodes may learn that your node created the transaction. To prevent this, configure zcashd to use Tor network.

Trading or selling Zcash:

You can buy, sell or trade Zcash on a number of online marketplaces called exchanges.

Featured exchange:

Gemini - Prices here for different cryptocoins.

NOTE: The Gemini exchange is one of the most trusted in the industry. It's easy to use and allows shielded withdrawals of your Zcash. Still a database of 5,7M users was offered for sale on hacker forums Dec 15th, 2022.

Exchanges with shielded Zcash support, besides Gemini:

A list of countries where cryptocurrency is considered legal and where it is illegal:

Tax for selling cryptocurrency in Brazil:

15% of the profit you made when you sell some assets.

FOR EXAMPLE:  If 1BTC is bought for BRL 34,000.00 and sold for BRL 36,000.00, there is a capital gain of BRL 2,000.00, and this amount will be subject to taxation at a rate of 15%, generating a tax payable of R$ 150.00. It is wrong to calculate the tax only on the portion that exceeds R$ 35,000.00.

Read more here ( Portuguese site ) explains how it works.

Declaração de Bitcoin e Criptomoedas -  da Receita Federal

Tax for selling cryptocurrency in the United States:

The amount of capital gains tax you owe for your crypto activity in the United States is determined by how long you’ve owned your assets and your income tax bracket. So what is the tax on the crypto gains?

Note: The information below can change at any moment.

This is split into two sections:

  • Short-term capital gains: Gains or losses on crypto assets held for less than a year are taxed at the same rate as your income tax bracket. Here is a complete list of tax brackets for 2021-22. Any losses can be used to deduct up to $3,000 in income tax. Any additional losses can be carried forward as previously stated.
  • Long-term capital gains: Any gains or losses from crypto assets held for more than a year are taxed at a significantly lower crypto tax rate of 0%, 15%, or 20%, depending on individual or combined marital income.

Read more here ( American site ) explains how it works.

From what info I could gather about US Tax:

You pay from 0% to 37% in tax in the US, depending on if you are single or married, your total household income and for how long you had the cryptocurrency.

Read more here ( American site ) explains how it works.

Now it is time to choose as wallet for your cryptocurrencies:

Recommended by Zcash for Desktop:

Now choose carefully !

  • ZecWallet - Linux desktop support for Debian 11, LMDE5
    Syncs in under a minute. No blockchain download needed!
    Size: 125MB
    Download here.

    Latest Version: 1.8.8
  • Exodus - Linux desktop support for Debian 11, LMDE5
    Size: 152MB
    Latest Version: 23.5.8
    Download here.

    Note: Their support seems limited.
  • Jaxx - Easily send and receive dozens of cryptocurrencies right in your wallet.
    Note: Only available as AppImage for Linux desktop, but doesn't work on Debian 11 or LMDE5.
  • SafePay - The SafePay Cryptocurrency Wallet makes your crypto payments and storage safe and easy!
    Note: 118MB and you are recommended to verify the downloaded file. It doesn't work with Debian 11 or LMDE5.

Note: None of this software is available in Debian 11 "Bullseye" repository nor LMDE5 repository.

How to install Exodus via a terminal window:

Note: Exodus works with Debian 11 and LMDE5.
Version: 22.7.1

First download Exodus here.

cd Downloads

Press Enter.

sudo dpkg -i exodus-linux-x64-22.7.1.deb

Press Enter. Done.

This is how it looks:

Exodus Main

Scrolling down a bit will give you several currencies actual value, nice right:

Exodus Main 2

Now it is up to you if you want to risk it using your smartphone, which is very hackable, especially if you are using an Android phone.

Please note that you can be tracked by your operator using IMEI, MEID, ESN, IMSI and in Brazil the top three mobile phone operators in Brazil are Vivo legally known as Telefônica Brasil, Claro and TIM are some of the operators that showers you in sms mesages and calls with offers of all kinds. Of course let us not forget Oi Brasil who are using WhatsApp to try to find clientel.

The thing is almost all of these companies have been caught selling your data and some are spamming you like hell, with 8-12 or more sms per day. Remember they have access to your smartphone in ways you can't control without "root" access.

In the US, I imagine it is not that different, but they still allow "Burners" from what info I could gather.

In most of Europe, you can buy and use "Burners", which basically means you buy a cheap phone with a number and then you smash it and dump it in the trash when you are done with it.

U.K is excluded, they register everything and almost puts a CCTV in your bedroom. Naughty fuckers aren't they? Not the kind of Intel you get online, is it now?

Crypto currencies I would avoid:

Ethereum has for five (5) years straight been the most hackable cryptocurrency. Most likely due to its "Smart Contracts". These stored programs automate the execution of an agreement between the parties, with no additional entities involved and as such a concept it greatly simplifies the process of conducting business, but it requires complex programming languages such as Solidity and Vyper.

Also Smart Contracts reside at public addresses, which makes them susceptible to reverse engineering.

Also you should know that anyone can start their own DeFi service, because all you need is “a website, running a Web3 Decentralized App and a Smart Contract" and do some online marketing.

Developers website