The ZCash price popped sharply during the weekend as investors cheered the ongoing transition from a proof-of-work (PoW) to a proof-of-stake (PoS) model. The ZEC coin jumped to a high of $238, which was the highest level since May 19th. This price was also about 185% above the lowest level in July this year.
PoW to PoS
There are two main ways in which cryptocurrencies are minted. The proof-of-work model was introduced by Bitcoin. It allows new coins to be minted by computers that solve complex calculations. In addition to Bitcoin, other cryptocurrencies that use the PoW model are Zilliqa, Ethereum, and ZCash.
In proof-of-stake, a chain of validators who own the cryptocurrency are tasked with verifying blocs in the digital ledger. In the past few months, Ethereum has been transitioning from PoW to PoS because of its efficiencies and higher speeds.
ZCash, a privacy-focused cryptocurrency, also announced that it will soon transition from PoW to PoS. In a statement, Electric Coin Company, the coin’s developer, said that its network will shift to a PoS platform in the next few years.
The upgrade will happen as part of the three key goals that the developers want to achieve. First, they want to launch an official ECC wallet that will allow its users to handle transactions. The wallet will be launched in 2022.
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Second, they will launch the proof-of-stake consensus in the coming years. Most importantly, it will be interoperable with other platforms.
For starters, ZCash is a privacy-focused cryptocurrency. This means that transactions done within the network are hard to track.
While privacy coins are in high demand, the performance of their tokens has generally lagged other coins. For example, ZCash has a market cap of about $2.5 billion, making it the 73rd biggest coin in the world. Dash, another privacy coin has a market cap of more than $2 billion while Monero is valued at about $4.3 billion.
ZCash price prediction
On the daily chart, we see that the ZCash price found a strong support at $83.83 in July this year. And recently, the coin managed to move above the key resistance level at $175, which was the highest level on September 5.
The ZEC price has also moved above the 25-day and 50-day moving averages. This is usually seen as a positive thing for a cryptocurrency and other assets. It is also along the 50% Fibonacci retracement level. Therefore, the ZCash price will likely keep rising as bulls target the next key resistance level at $300.