Over the weekend, someone managed to reveal and trace the starting address of a shielded transaction on the Zcash (ZEC) blockchain, arousing the dismay of Riccardo Spagni from Monero (XMR).
Oh dear…$zcash #zcash pic.twitter.com/tM5Zwea9cV
— Ric “el pony esponjoso” (@fluffypony) July 19, 2020
Zcash, which promises anonymous transactions to protect the privacy of users, does not seem to have the capacity to do so, considering that it is possible to trace the history of the author of a transaction.
It all started from a tweet a couple of weeks ago, in which someone was challenged to discover an address originating from a single $100 transaction made in ZEC, which used a shielded transaction.
Challenge someone who talks down on Shielded Zcash. If people know so much about privacy with #Zcash it’s time to put money where their mouth is.
— ⚡️ ᙇ 🛡 (@MoneyKnowledge0) July 11, 2020
And here’s the famous transaction that should have been untraceable.
IMMAGINE ————————————–
Wilcox Zooko, CEO of Zcash, appreciated this experiment and had the opportunity to explain an important concept about privacy coins: it’s not possible to hide the whole history of an asset, since it is always recorded, whereas what can be done is protect the balance.
This is a great demonstration! And kudos to you for paying the guy $100 worth of ZEC. My take is: you can't get privacy by using zaddrs as a pass-through, but you can get privacy by using them as storage.
— zooko❤ⓩ🛡🦓🦓🦓 (@zooko) July 19, 2020
This concept also applies to all protocols, think about the conversion between Bitcoin (BTC) and Monero (XMR) but also when using mixers like Tornado Cash.
Anyway, the use of this type of Zcash shielded transactions is increasing and when checking the data that provide us with the statistics of this blockchain, we see how the non-shielded transactions are 10 times higher than the shielded ones.
At this point, it is clear that despite the efforts made by Zcash it is still possible to discover a lot of information of a transaction even though it is this shielded, which obviously plays to the advantage of Monero (XMR).
Monero transactions are anonymous by default, unlike Zcash where they are optional. Unfortunately, many criminals choose Monero as the crypto for their illegal activities, as in the case involving an Argentine phone company a few days ago.
