Zcash Team Reveals Plan for Transition to Proof-of-Stake, ZEC Crypto Token Surges 20% November 21, 2021 November 21, 2021 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Market NewsNovember 21, 2021 by Kelly Cromley

Zcash Team Reveals Plan for Transition to Proof-of-Stake, ZEC Crypto Token Surges 20%

Zcash (ZEC) has risen about 20% in the last 24 hours, aided by the enthusiasm around its fundamental protocol’s decisive switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS). On Binance, the ZEC price hit an intraday high of $188.80, after a two-day gain of more than 27%. Additionally, the cryptocurrency’s upward movement erased a significant amount of the losses it sustained earlier this week, after a market-wide correction to the south.

ZEC’s price surged when its primary developer, Electric Coin Company (ECC), said that it will transition Zcash’s protocol from PoW to PoS over the next three years. According to the organization, the update will mitigate negative pressure on the ZEC price by eliminating miners who “immediately liquidate” the token for Bitcoin or cash.

In addition, “this transition will boost the functionality of ZEC through abilities that include yield creation through staking and a possible route to on-chain governance structures for ZEC hodlers,” said Josh Swihart, the senior vice president of growth at ECC. “There are some other benefits of moving to proof of stake such as reducing the ZEC carbon footprints, offering a possible path to on-chain governance structures for ZEC hodlers, and assistance for interoperability by addressing to existing blockchains.”

PoS systems, as contrast to PoW mechanisms, enable a person to mine or verify block transactions depending on the quantity of underlying tokens they own or have staked in the network. Returning the favor, the so-called “validator” gets compensation in the form of yields.

Ethereum, the world’s most valuable smart contracts platform by market capitalization, has also begun the shift from proof-of-work to proof-of-stake (PoS) mining by launching a dedicated smart contract. As a result, about 8.33 million Ether (ETH) tokens were locked onto the so-called Ethereum 2.0 address, thereby removing them from the active supply of the cryptocurrency.

According to ECC’s release, users will be able to stake a percentage of their ZEC holdings into a dedicated Zcash smart contract in order to become validators on the network of the cryptocurrency’s blockchain. Consequently, more ZEC may be forced out of active circulation as a consequence of lockup periods, compared to its set supply of 21 million tokens, which is similar to Bitcoin’s fixed supply

With the Zcash token supply ceiling approaching, Barry Silbert, the founder and CEO of Digital Currency Group – a venture capital business — said on Twitter on Saturday that he will “purchase additional” Zcash tokens.

His tweet was timed to coincide with a sharp increase in the value of ZEC relative to the US dollar and Bitcoin (BTC).

In spite of this, several commentators asserted that Zcash will not be subject to a supply limit after the implementation of PoS. Indeed, in reaction to Silbert’s tweet on Zcash, on-chain expert Willy Woo expressed confidence that the cryptocurrency doesn’t really have a limit supply if the cryptocurrency can “try to extend the dev tax” and “if it can move to PoS and take out the miners.”

“And that’s disregarding the inflation fault of 2018 and presuming we could in reality verify the supply,” Woo said, alluding to Zcash’s notorious weakness that could have resulted in the creation of an endless number of ZEC tokens in the past.

Just a few minutes after Woo’s comments on ZEC’s uncertain supply ceiling, Silbert tweeted: ZEC’s current push to the upside has placed it in an inflection zone, which is known for its history of capping the cryptocurrency’s gains. The trading range indicated by $170-$205 (the reddish region in the chart below) has previously offered sellers with chances to profit from price declines.

The ZEC price has fallen downward in recent days after its entry into the aforementioned range, with an eye toward more losses near the purpled upward sloping trendline. The formation of a definite breakout trend, supported by increasing trading volumes, may occur once ZEC closes above the inflection zone, with the cryptocurrency aiming for the Fibonacci retracement levels of $247 and $316. In contrast, a decisive closing below $170 may increase the danger of ZEC falling as low as $136.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.