Zcash is a privacy-protecting, digital currency built on strong science. With Zcash, people can transact efficiently and safely with low fees. Shielded Zcash ensures transactions remain confidential while allowing people to selectively share address and transaction information for auditing or regulatory compliance.
Multiple transaction types
Zcash addresses are either private (z-addresses) or transparent (t-addresses). Private z-addresses start with a “z,” and transparent t-addresses start with a "t." Between these two types of addresses, there are four transaction types.
A Z-to-Z transaction appears on the public blockchain, so it is known to have occured and that the fees were paid. But the addresses, transaction amount and the memo field are all encrypted and not publicly visible. This type of encryption is only possible through the use of zero-knowledge proofs. Read more: What are zk-SNARKs?
The owner of an address may choose to disclose z-address and transaction details with trusted third parties — think auditory and compliance needs — through the use of view keys and payment disclosure.
A T-to-T transaction works just like Bitcoin: The sender, receiver and transaction value are publicly visible. While many wallets and exchanges exclusively use t-addresseses today, many are moving to shielded addresses to better protect user privacy.
The two Zcash address types are interoperable. Funds can be transferred between z-addresses and t-addresses. However, it is important that users understand the privacy implications of shielding or de-shielding information through these transactions.