Arkham Claims 50% of Zcash Transactions Were Deanonymized - Zcash Founder Disputes It
A new report from Arkham Intelligence claiming that more than half of all Zcash transactions have been deanonymized has ignited fierce debate in the crypto privacy world. The firm attributed over $420 billion in traced activity to identifiable entities - but Zcash’s founder says the claim is misleading.
Arkham’s Report: A Bold Claim With Important Caveats
Arkham stated that 53% of Zcash’s on-chain activity could be linked to known individuals, organizations and even U.S. government-associated wallets. The implication was staggering: one of the most iconic privacy-focused cryptocurrencies appeared significantly exposed.However, Arkham’s analysis focused overwhelmingly on transparent t-addresses - which function exactly like Bitcoin. These addresses expose the sender, receiver and amounts on-chain, making clustering and attribution straightforward for analytics firms. The cryptographic privacy layer of Zcash is used only on shielded z-addresses, not on t-addresses.
Zcash Founder Pushes Back
Zooko Wilcox responded quickly, clarifying that Arkham did not break the zk-SNARK-powered privacy pools. Instead, they analyzed the public portion of Zcash - which is expected to be traceable. According to Wilcox, no evidence indicates that shielded transactions were compromised. The report, he said, overstates its implications by conflating transparent usage with the protocol’s actual privacy layer.How Zcash Privacy Actually Works
Zcash includes two address types:• t-addresses: transparent, identical in exposure to Bitcoin
• z-addresses: fully shielded using zk-SNARKs
Only z-to-z transfers provide complete privacy. Yet in practice, only about 23% of Zcash users rely on shielded addresses. This means most activity still occurs via transparent rails, giving firms like Arkham broad visibility into user behavior - without breaking cryptography.
Why the Debate Matters
The controversy is a reminder that privacy depends on user behavior as much as on protocol design. Even a highly advanced privacy coin cannot protect users who default to transparent transactions.Arkham’s report highlights genuine risks around transparency in mixed-mode privacy systems, but it does not represent a failure of zk-SNARKs or Zcash’s shielded pool. Instead, it underscores low adoption of privacy features and the need for more intuitive shielded-by-default tooling.
Conclusion
The claim that “half of Zcash has been deanonymized” oversimplifies the reality. Arkham traced transparent wallets - something the design of Zcash has always allowed. The cryptographic privacy layer remains intact. The real challenge lies not in breaking privacy, but in encouraging users to actually use it.Editorial Team - CoinBotLab
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