Zcash tokens gain 31% since protocol transition to proof of stak
The 65th largest digital token by market cap, Zcash (ZEC-USD), surges 31% since transitioning to a proof of stake protocol from proof of work, according to the coin's main developer, Electric Coin Company, in a release from Nov. 19.
Proof of stake, a protocol designed as an alternative to proof of work, is used to mine or validate block transactions based on how many coins are held.
"Benefits include the reduction in downward pressure on the price of ZEC, as most miners immediately liquidate ZEC for BTC or fiat today," the company says.
Unlike proof of work protocols - the original consensus algorithm in blockchain tech - proof of stake does not incentivize extreme amounts of energy consumption.
"Other benefits of moving to proof of stake which include the reduction of the ZEC energy footprint, providing a possible path to on-chain governance mechanisms, and support for interoperability by addressing problems with proof-of-work transaction finality," according to the release.
The transition will also "increase the utility for ZEC through capabilities that include yield generation through staking and a possible path to on-chain governance mechanisms for ZEC holders."
To note, staking is a way of earning rewards for holding crypto to verify transactions on a proof of stake blockchain.
This could imply more Zcash (ZEC-USD) may end up "going out of active circulation due to lockup periods," against its fixed supply of 21M tokens - much like Bitcoin's (BTC-USD) fixed 21M coins in circulation, CoinTelegraph notes a day after the announcement.
Electric Coin Company also highlighted its plans to expand its mobile and infrastructure teams, "with intent of shipping a first-release official ECC wallet in 2022."
Some other cryptos that are moving higher on Monday - and in the past week - despite the broader crypto market slump includes Avalanche (AVAX-USD +3.1%), Crypto.com (CRO-USD +2.7%), Elrond (EGLD-USD +16.0%) and Decentraland (MANA-USD +5.1%).
Previously, (July 15) crypto exchange Coinbase considered adding Zcash and four more digital tokens to its trading platform.
Proof of stake, a protocol designed as an alternative to proof of work, is used to mine or validate block transactions based on how many coins are held.
"Benefits include the reduction in downward pressure on the price of ZEC, as most miners immediately liquidate ZEC for BTC or fiat today," the company says.
Unlike proof of work protocols - the original consensus algorithm in blockchain tech - proof of stake does not incentivize extreme amounts of energy consumption.
"Other benefits of moving to proof of stake which include the reduction of the ZEC energy footprint, providing a possible path to on-chain governance mechanisms, and support for interoperability by addressing problems with proof-of-work transaction finality," according to the release.
The transition will also "increase the utility for ZEC through capabilities that include yield generation through staking and a possible path to on-chain governance mechanisms for ZEC holders."
To note, staking is a way of earning rewards for holding crypto to verify transactions on a proof of stake blockchain.
This could imply more Zcash (ZEC-USD) may end up "going out of active circulation due to lockup periods," against its fixed supply of 21M tokens - much like Bitcoin's (BTC-USD) fixed 21M coins in circulation, CoinTelegraph notes a day after the announcement.
Electric Coin Company also highlighted its plans to expand its mobile and infrastructure teams, "with intent of shipping a first-release official ECC wallet in 2022."
Some other cryptos that are moving higher on Monday - and in the past week - despite the broader crypto market slump includes Avalanche (AVAX-USD +3.1%), Crypto.com (CRO-USD +2.7%), Elrond (EGLD-USD +16.0%) and Decentraland (MANA-USD +5.1%).
Previously, (July 15) crypto exchange Coinbase considered adding Zcash and four more digital tokens to its trading platform.