Zcash vs Monero: Two Approaches to Privacy

Both hide your transactions. Both protect your financial information. Both get called “privacy coins.”

But Zcash and Monero use completely different technology to achieve privacy.

Quick Comparison: Zcash vs Monero

Two Different Privacy Philosophies

Monero and Zcash take different approaches to the same problem.

Monero’s bet: Force privacy on everyone. Every transaction private. No exceptions. You literally cannot expose yourself by clicking the wrong button.

Zcash’s bet: Let people choose. Shielded when you want privacy. Transparent when you need your accountant to see what happened. Or when an exchange demands it.

Neither is wrong. They’re betting on different things mattering more.

Monero: Privacy by Default

Monero launched in 2014. Every transaction on the network is private. There is no “transparent mode.”

How Monero Privacy Works

Monero uses several technologies together:

1. Ring Signatures

When you send Monero, your transaction is mixed with 15 decoys pulled from the blockchain. The result is a group of 16 possible senders. An observer cannot determine which one actually spent the coins.

Think of it like shuffling your signature into a deck of 15 other signatures. Someone can see a signature exists, but cannot identify whose it is.

2. Stealth Addresses

Every payment generates a one-time address. Even if you publish your main address, payments to you cannot be linked to each other on the blockchain.

3. RingCT (Ring Confidential Transactions)

Transaction amounts are hidden using cryptographic commitments. Observers can verify that inputs equal outputs (no coins created from nothing) without seeing the actual numbers.

Monero Strengths

Why this works:

• No wrong choices. You can’t accidentally expose yourself. There’s no setting to mess up.
• You don’t stand out. Every transaction looks the same. The person using privacy isn’t the weird one.
• Battle-tested. Ring signatures have been running since 2014.
• Everyone’s in the pool. When privacy is mandatory, the anonymity set is everyone.

Monero Limitations

The catch:

• It’s probabilistic. Someone with enough data might narrow down who actually sent the coins. Researchers estimate a 1-in-4 guess rate at current ring size. Not great, not broken.
• Bigger transactions. Ring signatures carry more data. Your wallet syncs slower.
• All or nothing disclosure. Want to prove one transaction to your accountant? You’d have to hand over your view key, which shows your entire receive history. No cherry-picking.

Zcash: Privacy by Choice

Zcash launched in 2016. It uses zero-knowledge proofs to achieve privacy that is cryptographic rather than probabilistic.

How Zcash Privacy Works

Zcash uses zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge).

A zero-knowledge proof lets you prove something is true without revealing why it is true.

In Zcash, this means proving a transaction is valid (you own the coins, no double-spending, amounts balance) without revealing:

• Who sent the transaction
• Who received it
• How much was sent

Shielded vs Transparent

Zcash has two address types:

Transparent addresses (t-addresses): Work like Bitcoin. Fully visible on the blockchain. Used for exchange deposits, regulatory compliance, or when transparency is desired.

Shielded addresses (z-addresses): Use zero-knowledge proofs. Completely private. Sender, receiver, and amount are all encrypted.

Users choose which to use for each transaction.

Zcash Strengths

Why this works:

• Math, not probability. Breaking it requires breaking the cryptography. No statistical games.
• Bigger anonymity set. Every shielded transaction looks identical. You’re hiding among the entire shielded pool, not 16 decoys.
• Pick what you reveal. Viewing keys let you prove specific transactions. Your accountant sees what you show them. Nothing else.
• Small and fast. zk-SNARKs are compact. Verification takes milliseconds.

Zcash Limitations

The catch:

• You can mess it up. Choose transparent by accident? You just broadcast everything. Defaults matter a lot.
• Historically thin pool. For years, most Zcash users stuck with transparent addresses. Fewer people in the shielded pool means smaller anonymity set.
• Newer, weirder math. Zero-knowledge cryptography is more complex. Harder to audit. More things that could go wrong.

Read more: Zero-Knowledge Proofs Explained

Technology: Ring Signatures vs zk-SNARKs

Ring Signatures (Monero)

Ring signatures were invented in 2001 by Ron Rivest, Adi Shamir, and Yael Tauman.

The concept: create a signature that proves someone from a group signed, without revealing who.

In Monero, when you spend coins:

1. Your wallet selects 15 other outputs from the blockchain (decoys)
2. It creates a signature valid for any of the 16 outputs
3. The network verifies the signature is valid
4. No one can determine which of the 16 was actually spent

Key property: The privacy comes from plausible deniability. Your transaction could be any of the 16.

Trade-off: An adversary with perfect knowledge of which outputs are decoys could potentially identify the real spend. Monero continuously improves decoy selection to mitigate this.

zk-SNARKs (Zcash)

zk-SNARKs were developed from research in the 2010s. Zcash was the first major deployment in 2016.

The concept: create a proof that a computation was done correctly without revealing the inputs.

In Zcash, when you spend shielded coins:

1. Your wallet generates a zk-SNARK proof
2. The proof demonstrates validity (you own coins, no double-spend, correct amounts)
3. The network verifies the proof in milliseconds
4. No information about sender, receiver, or amount is revealed

Key property: The privacy is cryptographic. Breaking it requires breaking the underlying math.

Trade-off: Earlier versions required a “trusted setup” ceremony. The Halo 2 upgrade (Orchard, 2022) eliminated this requirement.

Supply and Economics

Zcash: Fixed Supply

Zcash has a hard cap of 21 million coins (same as Bitcoin).

Block rewards decrease over time through halving events. Eventually, miners will rely entirely on transaction fees.

20% of block rewards go to development funding (Electric Coin Company, Zcash Foundation, community grants). This is controversial but ensures ongoing development.

Monero: Tail Emission

Monero has no hard cap.

After the initial emission, Monero entered “tail emission” in 2022. The network produces 0.6 XMR per block indefinitely, resulting in roughly 1% annual inflation that decreases over time.

The rationale: tail emission ensures miners always have block rewards, maintaining network security even if transaction fees are low.

Regulatory Considerations

Both privacy coins face regulatory scrutiny. Their different designs create different compliance situations.

Monero: Full Privacy, Full Resistance

Monero’s mandatory privacy makes it difficult for exchanges to comply with regulations requiring transaction monitoring.

Result: Monero has been delisted from several major exchanges in jurisdictions with strict anti-money-laundering requirements.

Users who need Monero often use decentralized exchanges or peer-to-peer trading.

Zcash: Optional Compliance

Zcash’s transparent addresses allow exchanges to operate similarly to Bitcoin, with full transaction visibility when required.

Shielded transactions remain private, but institutions can choose transparent mode for compliance.

Zcash viewing keys also let users prove transaction history to auditors without publishing it publicly. This selective disclosure is not possible with Monero’s architecture.

Result: Zcash maintains listings on more regulated exchanges than Monero.

Use Cases: Where Each Excels

Choose Monero When:

• You want privacy without configuration
• You prefer “always on” privacy with no user decisions
• You primarily use decentralized exchanges or peer-to-peer trading
• You value Monero’s longer track record (since 2014)
• You want uniform privacy where your transactions look like everyone else’s

Choose Zcash When:

• You need selective disclosure (proving transactions to auditors)
• You want cryptographic rather than probabilistic privacy
• You use regulated exchanges that require transparent deposits
• You value the 21 million supply cap
• You want the flexibility of transparent and private modes

Use Both

Many privacy-focused users hold both. Different tools for different situations.

Monero for everyday private transactions. Zcash for situations requiring selective disclosure or exchange access.

Adoption and Community

Monero Community

Monero has a dedicated privacy-focused community. Development is decentralized with no formal company behind it. Funding comes from community donations.

Monero is accepted by various merchants and has strong presence in peer-to-peer markets.

Market cap: Typically ranks among top 30-50 cryptocurrencies.

Zcash Community

Zcash development is led by the Electric Coin Company and supported by the Zcash Foundation. Development funding comes from block rewards.

Zcash has institutional interest, including a Grayscale trust product. It maintains listings on major exchanges.

Market cap: Similar range to Monero, with periodic fluctuations.

Network Metrics

Both networks process thousands of transactions daily. Monero generally has higher transaction volume due to mandatory privacy (every transaction is private). Zcash shielded pool has grown significantly, with over 4.9 million ZEC in shielded addresses as of late 2025.

Security Considerations

Monero Security

Monero’s ring signature security has been studied extensively. Researchers have identified potential weaknesses in decoy selection, and the protocol has been updated accordingly.

The current implementation (CLSAG signatures, ring size 16, improved decoy selection) addresses known attacks. Research continues.

Zcash Security

Zcash’s zk-SNARK implementation has been audited by multiple cryptography teams. The underlying math is based on well-studied cryptographic assumptions.

Earlier versions required trusted setup ceremonies. The Halo 2 upgrade (Orchard, 2022) eliminated this requirement entirely. Zcash shielded transactions now have no trusted setup.

Quantum Resistance

Neither Monero nor Zcash is currently quantum-resistant. Both communities are monitoring post-quantum cryptography developments. This is an industry-wide challenge, not specific to privacy coins.

Common Questions: Zcash vs Monero

Conclusion: Different Tools, Same Goal

Monero and Zcash both protect your financial privacy. Different methods, same end.

Monero forces privacy on everyone. Ring signatures, stealth addresses, RingCT. No settings, no accidents, no choices. Every transaction looks like every other transaction.

Zcash gives you privacy when you choose it. Zero-knowledge proofs. Mathematically unbreakable. But you have to pick shielded. Mess up and you’re transparent.

Neither is right or wrong. They’re different bets on what matters more.

Some people want privacy with no thinking required. Monero.

Some people need to prove transactions sometimes, want cryptographic guarantees always. Zcash.

Some people hold both. Different tools for different days.

Privacy isn’t a contest. It’s a right. Both coins help you exercise it.

Learn More:

• What Is Zcash?
• Bitcoin vs Zcash
• Zero-Knowledge Proofs Explained
• Chapter 12: The Privacy Problem
• Chapter 13: The Birth of Zcash