Zcash, like other cryptocurrencies, has become an increasingly popular method for sending and receiving digital payments. Cryptocurrencies like Zcash can allow users to send and receive funds anywhere in the world with an internet connection, and may be more cost effective compared to bank wires, credit cards, debit cards and other more traditional payment methods.
Cryptocurrencies like Zcash are only in the very beginning stages of becoming more widely used and accepted. Although Bitcoin has dominated much of the headlines in the cryptocurrency space, other digital currencies have been created with various features.
Zcash uses cryptography to provide enhanced privacy for its users. This cryptocurrency uses improvements made to the Zerocoin Protocol, which then became the Zerocash system and it was finally developed into Zcash in 2016. The cryptocurrency was founded by Zooko Wilcox-O’Hearn.
Zcash payments are made using a public blockchain. Users are, however, able to utilize a feature that is designed to conceal details of the transaction such as the sender, recipient and amount. Like many other cryptos, Zcash has a fixed amount of supply of 21 million units. This fixed supply means that the currency supply cannot be manipulated like paper currencies. Central banks can increase or decrease the supply of money based on their monetary policy objectives. Increasing supplies, however, tend to lead to declining value.
Cryptocurrencies may offer consumers a low-cost alternative to traditional payment methods. Payments can be sent or received anywhere on the globe, and many are almost instantaneous. These digital currencies can be used across borders, without the hassle and expense of currency conversions and all the red tape that may come with a large transaction. Facilitating transactions using such digital currencies may be far more cost-effective than traditional methods such as bank wires or ACHs. The major debate currently seems to be whether or not these cryptocurrencies can become more mainstream and even challenge fiat currencies as a preferred payment method.
Some merchants already accept various types of cryptocurrencies, and that number is likely to increase dramatically as consumer payment preferences change. As more and more consumers look for added convenience and the option to pay with cryptocurrencies, more and more merchants are likely to begin to offer the option.
Zcash can be purchased from participating online exchanges or markets using either fiat currency or another cryptocurrency. For those who are looking to invest for the long-term, however, a cryptocurrency IRA may be worth consideration. A cryptocurrency IRA is a self-directed IRA account that allows the account holder to buy or sell alternative asset classes like cryptocurrencies. Purchasing Zcash in an IRA can potentially have numerous advantages such as tax-deferred growth, a lower tax bill and flexibility in investment choices. Any gains made in this type of account may be non-taxable provided that all rules and guidelines are followed.
A Zcash IRA can not only be used to purchase this cryptocurrency, but can also be used to purchase a variety of currencies or other assets, check out the current value of Zcash using our Zcash charts. This makes the cryptocurrency IRA account a very powerful and flexible vehicle for investing in cryptocurrencies.
Any questions or concerns about the tax implications, rules and eligibility should be directed to your tax professional.