Grayscale said in a new research report on Zcash that the rise of AI may create new forms of financial surveillance, making privacy features more valuable in digital money. The firm said Zcash uses zero-knowledge proofs to enable shielded transactions that hide the sender, receiver, and amount, giving it cash-like privacy properties. According to the report, shielded transactions now account for about 90% of transaction volume, while shielded supply stands at roughly 4.2 million ZEC, or 25% of circulating supply.
Grayscale also framed a valuation scenario around Zcash’s position within the broader “currency crypto assets” segment. It said Zcash’s market capitalization is about $8 billion, equal to 0.6% of that category’s total market value of $1.4 trillion. If Zcash were to reach a 5% share of that segment, the value of ZEC would be nine times its current level, the report said. Grayscale added that current pricing appears to reflect the assumption that privacy will remain marginal. If investors eventually assign a modest premium to privacy, the asset may be undervalued. The report also cited long-term risks including regulation and quantum computing, while saying Zcash’s shielded technology and selective disclosure tools provide a path for compliance.
PANews reported on Aug. 21 that Grayscale, in a research report on Zcash, said the growth of AI could introduce new tools for financial surveillance, turning Zcash’s privacy features into a necessary function in the AI era.
Zcash’s privacy design and on-chain figures
The report said Zcash uses zero-knowledge proofs to support shielded transactions, which conceal the sender, receiver, and transaction amount. Grayscale described that structure as giving Zcash privacy properties similar to cash. At present, shielded transactions make up about 90% of transaction volume, and shielded supply is about 4.2 million ZEC, equal to 25% of circulating supply.
Grayscale’s valuation scenario
Grayscale said Zcash has a market capitalization of about $8 billion and represents just 0.6% of the broader “currency crypto assets” segment, which it sized at $1.4 trillion. If Zcash’s share of that category reaches 5%, the value of ZEC would be nine times its current level, according to the report.
The report said the market’s current valuation of Zcash reflects an assumption that privacy will remain marginal. If investors eventually conclude that privacy deserves a moderate premium, the current valuation could be too low.
Risks noted in the report
On risks, Grayscale pointed to long-term issues including regulation and quantum computing. Even so, it said Zcash’s shielded transaction technology and selective disclosure tools offer a path to compliance.
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