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When Bitcoin was first released, it brought an open financial system to the world. Anyone could connect without requiring permission from anyone else; anyone could extend and improve on it without permission.
However, it came with a drawback – privacy. Bitcoin allowed everyone to see the sending address, recipient address, and value of all transactions on the blockchain. Sure, they weren’t tied to a user (or computer) by default, but contamination was a possibility. People are, after all, only human. In contrast, Zcash automatically hides the sending address, recipient address and the value of all transactions – unless you have the viewing key.
The Zcash team was founded with privacy in mind: privacy for businesses; privacy for commerce. To be viable long-term, fungibility is needed – and without privacy, fungibility can’t exist. Bitcoin brought fungibility to the digital world, but Zcash is making it accessible. No longer do coins need to be tumbled; no longer do new addresses need to be generated for each transaction to ensure complete anonymity. It’s built in from the get-go.
Worth a read including the links to Zcash founder Zooko Wilcox blog post about the mathematics behind zk-SNARK and the Equihash proof-of-work. It is both amazing to see so much engineering and research talent deployed and frightening to realise that truly untraceable transactions are coming.