CRYPTO

ZEC price jumps 20% in one day as Zcash devs unveil proof-of-stack conversion


Zcash (ZEC) has grown by almost 20% in the last 24 hours, aided by the surge surrounding the decisive transition from proof-of-work (PoW) to proof-of-stack (PoS) of its core protocol.

After rising more than 27% for two consecutive days, the ZEC price on Binance hit an intraday high of $ 188.80. The move in the opposite direction of the cryptocurrency erased a large portion of the losses in the wake of a downward retreat across the crypto market earlier this week.

The price of ZEC has risen over the next three years after the major developer of the cryptocurrency, the Electric Coin Company (ECC), announced the transfer of the ZCash protocol from PoW to PoS. The nonprofit noted that the upgrade would limit the downward pressure on ZEC prices by removing miners who “immediately liquidate” Bitcoin or Fiat tokens.

“This transition will increase the utility of ZEC through the capabilities that include yielding through stacking and potential pathways to on-chain governance mechanisms for ZEC huddlers,” added Josh Suihart, Senior Vice President of ECC Growth, adding:

“Other benefits of moving to Proof of Stake include reducing the footprint of ZEC power, providing a possible pathway to the on-chain governance mechanism, and supporting inter-efficiency by addressing the issue of work-proof transaction finality. Because.”

ZEC / USDT daily price chart. Source: Tradingview

ZEC bulls are caching PoS FOMO

Unlike PoW, PoS processes allow an individual to mine or verify block transactions based on the number of underlying tokens they hold. In return, the so-called “balidator” receives a reward in the form of a yield.

Ethereum, the smart contract platform led by Market Cap, has begun its transition from PoW to PoS following the introduction of a dedicated smart contract. In response, users locked about 8.33 million Ether (ETH) tokens to the so-called Ethereum 2.0 address, effectively pushing them out of active supply.

ETH / USD Weekly Price Chart. Source: Tradingview

ECC’s announcement promises that users will be able to validate a portion of their ZEC holdings in its blockchain in a dedicated Zcash smart contract. As a result, more ZEC may go out of active circulation due to lockup time, as opposed to a specific supply of 21 million tokens, such as Bitcoin.

Barry Silbert, Founder and CEO of Digital Currency Group – a venture capital firm Tweet On Saturday he quoted the “buy more” Zcash token, their supply cap. His tweet coincided with a sudden JC price increase against the US dollar and Bitcoin (BTC).

Nevertheless, some analysts have argued that Zcash will not have a supply cap once PoS is implemented.

For example, on-chain analyst Willie Wu Note In his response to Silbert’s tweet that Zcash “decides to expand the Dev tax,” and “if it can switch to PoS and cut miners,” he is confident that cryptocurrencies do not have the maximum supply.

“And,” U added, “this is ignoring the 2018 inflation bug and assuming we can actually audit the supply,” citing Zcash’s infamous vulnerability that could create infinite ZEC tokens.

Related: Zcash vulnerabilities allow infinite ZEC mesh stabilization and exposure

Minutes after Wu’s remarks about ZEC’s questionable supply, Silbert tweeted:

Inflation zone

ZEC’s latest push upside has put it in an inflation zone, with a record for capturing cryptocurrency assemblies.

In particular, the trading range defined by $ 170- $ 205 (the area reddened in the chart below) has provided trading opportunities for traders before. Even more recently, the ZEC price has retreated lower after entering the aforementioned range, keeping an eye on the extended fall towards the purple upward sloping trendline.

ZEC / USDT three day price chart. Source: Tradingview

With increasing trading volumes thus targeting Fibonacci retracement levels at $ 247 and $ 316, a clear breakout trend may occur after the ZEC closes above the inflation zone. Conversely, a settlement below $ 170 could risk sending the ZEC toward $ 136.

The opinions and opinions expressed herein do not necessarily reflect the views of the author and not necessarily those of Cointelegraph.com. Every investment and trading step involves risk, so you should do your own research when making a decision.