Zooko Wilcox, the founder of privacy coin Zcash, isn’t fond of anyone suggesting that Zcash is used by criminals. In a bid to rid the Internet of those nasty sentiments, he hired the Rand Corporation to seek out the facts and make them public.
In a 65-page report released today, the think tank and government contractor revealed that Bitcoin still reigns supreme among criminal elements. The study was commissioned last year by the Electric Coin Company, the company behind Zcash.
Rand, which examined the use of Zcash in three areas—money laundering, trade in illicit goods and services, and terrorism financing—found “no evidence of widespread illicit use of Zcash.”
“Zcash has only a minor presence on the dark web, indicating that Zcash is seen as a less attractive option to dark web users and is used less often compared to other cryptocurrencies, particularly Bitcoin and Monero,” the report stated.
However, the study made it clear that this doesn’t mean that Zcash is not used for illicit or criminal purposes on the dark web. Only that it is seen as a less attractive option to dark web users, compared to Bitcoin and Monero.
In its study, Rand found that only 1% of the illegal and illicit offerings that mentioned cryptocurrency even accepted Zcash. By contrast, 59% accepted Bitcoin, 27% accepted Monero, 12% accepted Ether, and 1% accepted Litecoin. Further, an examination of Zcash mentions in marketplace listings revealed that a majority of Zcash mentions originated from just three sellers, The Shop, Skyscraper, and Cyberzen.
“Bitcoin is still perceived to be the dominant cryptocurrency for illicit or criminal activities on the dark web,” the researchers concluded.
Conflicts with past reports
You can understand why criminals might be drawn to a privacy coin. Bitcoin is popular because it leaves less of a financial trail than, say, wiring cash from a bank account. But because transactions on the blockchain can be tracked, Zcash and Monero, another privacy coin, are more likely to throw forensics off their tracks, as criminals on or offramp into the fiat world—points where they are most vulnerable of getting caught by authorities.
Still, the Rand report conflicts with other studies in the past. In 2018, Europol said that ISIS, in particular, preferred Zcash. And that same year, blockchain analytics firm Chainalysis reported that Zcash was becoming increasingly popular on darknets. In every case, Zooko has taken to Twitter to dispute the reports.
Zooko and the Electric Coin Company have always maintained that cryptocurrency was intended for financial freedom, and the Rand report could be considered a big win for them.
It paints a much rosier picture for the privacy coin. In a blog post published Wednesday, Josh Swihart, the Electric Coin’s vice president of growth, said that people are using Zcash to buy movie tickets and ice-cream and sending money to charities.
“So please continue to sing in the shower, share with loved ones, and transact securely,” he wrote.