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Zcash (ZEC)

Zcash is a cryptocurrency that ensures transaction privacy through zk-SNARKs technology. Users can choose whether they want their transactions to be public or fully encrypted, giving them more control over their privacy.

 

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General information

S.1

CASP Name

BB TRADE ESTONIA OÜ

S.2

Relevant legal entity identifier

984500L05A5D0E66Q610

S.3

Blockchain network name

Zcash

S.4

Name of the crypto-asset

ZEC

S.5

Consensus Mechanism

Proof of Work (PoW - Equihash (192,7) algorithm)

S.6

Incentive Mechanisms and Applicable Fees

Zcash operates on a Proof of Work (PoW) consensus mechanism using an Equihash-based hashing algorithm (specifically Equihash (192,7)). Miners expend computational power to solve a cryptographic puzzle, and the first to find a solution gets to add a new block to the blockchain, securing transactions and maintaining the network.

Incentives: The block reward for Zcash is distributed to incentivize network security and ongoing development:

Miner Reward: A significant portion of the block reward (currently 3.125 ZEC per block, after the December 2024 halving) is paid to the miner who successfully discovers the block.

Dev Fund / Ecosystem Fund: A percentage of each block reward (historically "Founder's Reward," now "Dev Fund" managed by Electric Coin Company (ECC) and the Zcash Foundation) is allocated to fund continuous protocol development, audits, research, and ecosystem growth.

Fees: Transaction fees on Zcash are generally very low and are paid to the miners. These fees are designed to prevent network spam and ensure efficient transaction processing. The PoW mechanism provides robust security by making it economically unfeasible to attack the network.

S.7

Beginning of the period to which the disclosure relates

2024-01-01

S.8

End of the period to which the disclosure relates

2024-12-31

Mandatory key indicator on energy consumption

S.9

Energy consumption

~2,500,000,000 kWh per calendar year

S.10

Energy consumption sources and methodologies

The energy consumption of the Zcash network is primarily attributed to the electricity used by specialized mining hardware (ASICs optimized for the Equihash algorithm). These machines continuously perform computations to secure the network. Methodologies for estimation typically involve:

Hardware efficiency: Analyzing the power draw and hash rate of common Equihash ASIC models.

Network hash rate: Scaling this hardware consumption by the total global hash rate of the Zcash network.

Data from general PoW energy consumption models and comparative analyses are used, as Zcash does not have its own dedicated public energy index akin to CBECI.

Supplementary key indicators on energy and GHG emissions

S.11

Renewable energy consumption

~30%

S.12

Energy intensity 

~342.47 kWh per transaction

S.13

Scope 1 DLT GHG emissions – Controlled

0 t CO2eq per calendar year

S.14

Scope 2 DLT GHG emissions – Purchased

~1,187,500 t CO2eq per calendar year

S.15

GHG intensity 

~162.67 kg CO2eq per transaction

S.16

Key energy sources and methodologies

The energy sources for Zcash mining operations are globally diverse, encompassing both fossil fuels (coal, natural gas) and sustainable sources (hydroelectric, solar, wind, geothermal, nuclear). The specific energy mix used by individual miners varies significantly by geographic location and economic factors. Methodologies for assessing energy sources typically involve:

Geographical mapping: Estimating the regional distribution of Equihash hashing power.

Grid mix analysis: Correlating these locations with public datasets on electricity generation mixes and carbon intensity factors for those regions (e.g., from IEA, EIA, regional energy authorities).

S.17

Key GHG sources and methodologies

The predominant source of Greenhouse Gas (GHG) emissions for Zcash is Scope 2 (indirect emissions from purchased electricity). Methodologies for estimating these emissions involve:

Energy consumption * Emission Factor: Multiplying the estimated total electricity consumption of the Zcash network (S.8) by the carbon intensity (grams of CO2 equivalent per kWh) of the electricity mix where miners operate.

Focus on operational emissions: Calculations primarily focus on the operational energy usage of the mining hardware, which is the main energy-consuming component of the network. Comprehensive, regularly updated environmental reports for Zcash's specific GHG footprint are less common, relying on broader PoW energy modeling.