LONDON (IT BOLTWISE) – The recent price fluctuations in Zcash have drawn attention to the privacy aspect of the cryptocurrency. Arthur Hayes, co-founder of BitMEX, advises Zcash holders to withdraw their coins from centralized exchanges and protect them in self-managed wallets. This measure is intended to strengthen user privacy and protect them from regulatory risks.
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Cryptocurrency Zcash has seen significant price fluctuations in recent days, reigniting discussion about the importance of privacy and self-custody. Arthur Hayes, co-founder of crypto exchange BitMEX, has called on Zcash holders to withdraw their coins from centralized exchanges and protect them in self-managed wallets. This recommendation comes amid a volatile market environment where the price of Zcash has fallen from a high of $723 to $450.
Zcash is known for its unique privacy model that supports two types of addresses: transparent and protected addresses. While transparent addresses function like normal public wallets, protected addresses enable the obfuscation of sender, recipient and transaction information through the use of zk-SNARKs. However, centralized exchanges typically only support the transparent version of Zcash, meaning transactions on these platforms are fully traceable.
Hayes’ call to protect Zcash in self-managed wallets reflects widespread criticism within the privacy community. The loss of privacy when stored on centralized exchanges is a key concern, as coins there are also exposed to regulatory risks such as freezes or delistings. These risks have already been observed with other privacy coins such as Monero.
The decision to withdraw Zcash from centralized exchanges represents a trade-off between convenience and sovereignty. Self-custody protects users from bankruptcies and regulatory actions, but also requires a higher level of responsibility, such as managing private keys and using verified wallets. Despite recent price losses, Zcash remains a major player in the privacy coin space, with a market cap of $7.4 billion.
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