How To Buy Zcash | Ultimate Guide To Buy ZEC
Zcash is an alternative cryptocurrency that is developed on a decentralised blockchain, with the main purpose of delivering a privacy-focussed digital currency to users who desire anonymity. It doesn’t only ensure the anonymity of the Zcash users but also secures the transactions occurring on its blockchain. The platform deploys zero-knowledge proofs to validate transactions while maintaining the confidentiality of your personal information along with the transaction data. The blockchain has been built on the Bitcoin infrastructure, and therefore, shares many attributes with BTC.
Regardless of its similarities with BTC, Zcash brings an enhanced level of privacy, anonymity, and fungibility to its users. Many crypto consumers seek anonymity that has become a rarity owing to a variety of reasons. Zcash is an innovative attempt to deliver a reliable and practical solution to the privacy-conscious users. ZEC denotes the native token of the blockchain and at the time of writing is priced around $61.11 with a market capitalisation of well over $600 million.
5 Steps to Buy Zcash with eToro Now
Buying any cryptocurrency with eToro is easy, simply follow the steps below:
Sign up for free with eToro, entering your details in the required fields.
Fill out the questionnaire, this is both educational for you and eToro.
Click 'Deposit', you'll then be asked how you want to fund your account.
Choose your required payment method, follow the simple steps to link your payment.
Enter the amount you want to deposit and you're good to go!
Our Recommended Platform to Buy Zcash
If you are reading this guide to find out about the best trading and exchange platforms in 2020 for buying Zcash (ZEC), then you may already have a basic understanding of how purchasing ZEC works. For those who are just starting out to test the cryptocurrency trading waters, they simply need to continue to read in order to gather insightful information about this coin.
Investors who already know about the basics of buying and trading ZEC can rely on our carefully selected and reviewed trading platforms and crypto exchanges.
Where to Buy Zcash in 2021
Prior to purchasing or trading Zcash tokens, you need to understand that there are more than one ways to do so. The approach that you select will depend on the capital, underlying reasons, and the investment strategy that you have in mind. The first approach is to outright purchase the currency - i.e. ZEC tokens, which you can trade, sell and hold. The second approach is to speculate on the price of the Zcash tokens by opening and closing trading positions through financial instruments.
When you want to invest in Zcash for the long-term as you might believe that the price of the token will see an uptick in the coming weeks or months, you are better off owning the ZEC tokens. It means that you will need to use the services of a cryptocurrency exchange where you can buy popular cryptos like Bitcoin and Ethereum and then exchange them for altcoins such as Zcash. To hold the currency in the long-term, you will also need a crypto wallet that will keep your funds secure until the time has come to sell them off and take profits.
However, if you only want to use the Zcash tokens to make quick profits, the trading strategy will be better suited to your investment approach. In order to do that, it is a better idea to rely on a broker that enables you to open and close trading orders for a wide variety of tokens, including Zcash through financial instruments. These trading platforms make your job much easier as you can buy an instrument such as Contract for Difference (CFDs) which you can sell off with ease without having to worry about its security. This provides you with a much more convenient and affordable way to trade.
You need to keep in mind that whichever strategy you select, you should only spend on investment what you can afford to lose. The cryptocurrency market is highly volatile, and while that can be financially beneficial to you, it can also wipe the entirety of your investment off within minutes. Always manage your risk, invest in different promising currencies, and get out at the right time.
How to Buy Zcash With a Broker
If you are a short-term investor or trader, you need to pick your broker wisely after evaluating a multitude of aspects of their service quality. This may include user-friendliness, intuitive UI, customer support, trading charts and tools, demo account, and high security. Remember that it is always a good idea to pick a broker that is regulated and has a stellar reputation.
1. Register With the Broker
After you have selected your broker, it is time to sign up and open an account. Most of the leading trading platforms, such as eToro, will only ask for your basic information, including name, email, and a strong password. Ensure that you use a password that includes a combination of lower and upper case letters, special characters, and digits. A few brokers will also enable you to sign up on their platform using your social media profile for further convenience.
2. Verify Your Identity (KYC Process)
Although this may not appear to be the ideal scenario, it is for the investors' benefit. Regulated brokers are required by law to ensure compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations to counter money laundering, tax avoidance, tax fraud, and illegal transactions on the platform. Verifying your identity is not exactly a tedious process, and it will ensure the safety of your personal data as well as your funds.
To complete the process, the broker will require you to provide any evidence that establishes your valid identity such as ID card, driver's license, utility bill, or verification of residential address.
3. Deposit Funds With Your Preferred Payment Method
Before you make a deposit, you will need to choose your payment mode carefully. All the major trading platforms and brokers offer a wide variety of payment options to their users, but the fee structure differs from one method to another. Ensure that you understand how the transaction expenses work and do not forget to read the fine print if there's one. Consider speed, convenience, and cost before you select a payment method. For example, using a credit card could be a bit expensive, but it ensures almost instant deposit.
Moreover, it is strongly recommended that you begin trading with the minimum deposit sum. Usually, it is anywhere between $200 and $500 depending on the platform. Do not put a lot of money in your account until you have learned everything about the platform and have gained enough confidence to make informed investment decisions.
4. Open a Position to Long/Short ZEC
Short positions are opened by traders who are called bears, and they believe that the price of the ZEC coin will decrease in the coming days. So they bet on the price crash to make their money. On the other hand, long positions are opened by investors who are referred to as bulls and they think that price will rise in the coming days. You have to have a basic understanding of short and long term positions so you can devise an effective investment strategy.
After you have developed a fundamental understanding of these investment approaches, it will be much easier for you to identify if you need to open a short or long position. A large number of the leading brokers that we recommend, for example, eToro offer risk mitigation features which you can implement to your benefit such as stop loss and take profit options.
5. Close Your Position
The risk management features of stop loss and take profit are there to ensure that you don't overplay your hand. It doesn't mean that you lose control over your trade. Instead, you simply have a safety net in place when circumstances don't play out according to your expectations. It helps you to minimise your losses and take profits while you still have a chance.
If you believe that your open position has made enough profits and keeping it open would be quite risky, you can override the take profit specification and close your position. Similarly, if you think the price isn't going to rise and you have already lost a part of your capital, you can once again override stop loss.
How to Buy Zcash With an Exchange
When you are looking to hold your Zcash coins for a long-term investment, using an exchange service is the way to go. These are for the investors who believe that the price of ZEC tokens will continue to rise in the coming weeks and months or those technology enthusiasts who believe in the project. Before you select your crypto exchange, you need to go through an evaluation phase to weigh a multitude of features including intuitive UI, client support, accessible payment modes, variety of cryptocurrencies, cost of transactions and more. You also have to be mindful about some exchanges that aren't regulatory compliant and may not be as secure.
1. Set Up a Zcash Wallet
Before you purchase ZEC, you have to ensure that you own a cryptocurrency wallet to hold your tokens in a secure manner. This may appear to be a complex process at first, but the cryptocurrency industry has come a long way, and these steps are simpler and more user-friendly than before. Depending on the length of time for which you want to store your Zcash, you can choose between different types of crypto wallets:
Exchange/Web Wallets – These are browser-oriented crypto wallets that either come in the form of a website, an extension or are built-in within your brokerage or exchange website.
Software Wallets – As the name suggests, these come in the form of a desktop or mobile application and offer decent security along with other features.
Hardware Wallets – When you don’t want to compromise on your funds’ security, hardware wallets are the way to go since they are completely disconnected from any network and have hardware inside to keep your funds safe.
2. Choose and Join an Exchange That Sells Zcash
When it comes to signing up on a cryptocurrency exchange, there are many industry-leading platforms you can rely on including CEX.io and Coinbase. You can purchase your Zcash tokens from them but before you make a choice, ensure that you are choosing the one that fits your needs. Some exchanges might want detailed personal information and high deposits, while others might be more lenient with the transaction fee. You have to weigh the pros and cons of each exchange before you sign up. If the exchange is regulated, you will also need to verify your identity by providing proof such as a driver's license or passport.
3. Choose Your Payment Methods to Buy Zcash
Once you have gone through the process of choosing your exchange, the moment has arrived to assess the diverse range of payment modes that are offered by your selected platform and decide as to which one will be a better fit for your investment goals and strategy. For example, you can choose wire transfer, debit or credit card, and other e-payment methods to buy ZEC tokens but first, you'll have to find the right balance of speed, convenience, and transactional costs.
Some cryptocurrency exchanges go to great lengths to facilitate its users and also offer the facility to incorporate your bank account with the exchange’s account. It gives you the ability to have access to your fiat money all the time for easy accessibility.
4. Place an Order to Buy Zcash
To purchase Zcash currency, you can use a popular coin like Bitcoin or Ethereum and exchange it for Zcash through the exchange you have chosen. Some exchanges may also sell you ZEC tokens directly for conventional money but some may not. You first need to choose the fiat currency that you’ll use to deposit your funds. A calculator will let you know how many ZEC tokens you can have for that sum. Once you have gone through this step, you can submit your buy order.
If you have enabled two-factor authorisation, commonly known as 2FA, you will receive an OTP which you will have to enter before the transaction gets processed. This ensures enhanced security.
5. Safely Storing Your Zcash in a Wallet
Since your investment strategy is long-term, it is not wise to leave your ZEC tokens in the exchange's wallet or account. While they are reasonably secure, they are also at a high risk of cyberattacks and experiencing technical issues. This is why it is important that you must transfer your Zcash to a dedicated crypto wallet. All you'd need to do is provide a public key, and the coins will show up in your wallet.
However, if you have your 2FA enabled, once again you will need to enter the OTP to get the transfer of Zcash through.
Should You Buy or Trade Zcash?
You have to keep in mind that buying and trading Zcash are two completely different investment approaches. You should buy Zcash when you want to hold it for a long-term or believe in the project. However, if you just want to make money off the Zcash price volatility, it is a better idea to trade ZEC through brokerage websites using CFDs.
What's the Difference Between a Zcash Exchange and a Broker?
A Zcash crypto exchange is a digital platform that allows traders to buy ZEC for the most popular ones like Bitcoin and Ethereum. That is why these platforms are referred to as cryptocurrency exchanges. If you are going for a long-term investment approach, you should opt for an exchange as they sell the ZEC coins for which you will have the right to own, transfer, sell, and store.
In contrast, if you just want to have some passive income that can complement your main income, trading becomes a better option for you. For trading ZEC, you should choose a crypto broker where you can quickly buy and sell financial instruments of ZEC, for instance, Futures, Options, and CFDs. In this scenario, you expect to profit from the unpredictability of the cryptocurrency market.
Long Vs Short Term Investment
You should only invest in ZEC for a long-term if you truly believe that the price of the coin will continue to rise in the coming weeks or you want to support the development efforts of the project. If you are going for a long-term investment approach, a cryptocurrency exchange is better suited to you since you can buy and own the ZEC tokens.
However, when all you are looking for is short-term profit gains, trading ZEC through financial instruments is a much more efficient way to deal in cryptocurrencies than owning them. You can use the volatility of the market to cash in, but you will need to ensure you buy and sell at the right moment to make money. This method wouldn’t require to set up a dedicated wallet and cut down your transactional costs.
Pros and Cons of Buying Zcash
- Controlled privacy: Zcash provides a compromise between ultimate privacy and unrestricted exposure. In a world where security is a significant concern, this is a plus. You can choose which transaction to keep traceable and the ones to make private.
- Gemini listing: Gemini is one of the highly regulated exchanges in the cryptocurrency world. It comprises of very few cryptocurrencies most of which have the ability for long-term profitability. Zcash is one of the few privacy coins on the platform. It not only proves the coin’s potential but also indicates that it meets the regulation of certain government agencies.
- BOLT: Zcash plans on launching Blind Off-Chain Lightweight Transactions (BOLT) to remedy its high computational requirement for private transactions. It will hopefully make economic sense to use Zcash shielded transaction, which was only 12% of the total ZEC transactions in 2019.
- Sign Value: Every successful cryptocurrency has a sign-value. As a privacy coin, most people have used ZEC coins to support WikiLeaks’ CEO Julian Assange’s defence. The move has given the currency a sign-value of freedom and resistance against authoritarian regimes and neo-liberalism. Even though some might not like it, it will earn Zcash a community of dedicated long-term users.
- Similar to the competition: Its public blockchain works similar to Bitcoin. Its shielded transaction service is also facing stiff competition from Monero and DASH. Even worse, Ethereum and Bitcoin are planning to create private blockchains.
- Limited purchase options: Like most upcoming coins, you cannot purchase Zcash on most exchanges. On most platforms, you have to trade for other cryptocurrencies, which comes with additional transaction charges.
What Are the Fees Involved in Buying Zcash?
The following fees apply when you are buying Zcash from an exchange or brokerage. The actual values vary from platform to platform:
- Transaction costs: It is the fee an exchange or brokerage platform charges on every transaction. Some exchanges have a flat rate while others charge varying rates depending on market factors.
- Deposit fees: It is the amount charged on every deposit. Most reputable exchanges such as Coinbase do not have charges on deposits.
- Withdrawal fees: All platforms charge a percentage for withdrawals away from their platform. This is standard across the whole cryptocurrency industry.
- Spreads and commissions: There are common on trading platforms. It ranges between 0.2% and 1%.
3 Tips to Buy Zcash
Now that you have developed a basic understanding of how crypto brokers and exchanges can be used for different investment approaches, here are three highly valuable tips from us that will help you to manage your risk in a much more efficient manner and make your investment much safer. Don’t forget these important pointers when investing in Zcash.
Choose the Right Time and Do Your Own Research
In order to make the most of a volatile market, you need to buy and sell Zcash tokens at the right time. You can develop those investor instincts by going through all the guides and reading material available on our website and keeping an eye on the news related to the coin. Even rumours can drive the price up and down in the crypto market.
Comparing Costs to Buy Zcash
If you fail to manage your transaction costs, they may eat up 30% to 50% of your profits. Many new investors become victims of high transaction expenses. Ensure that you have taken everything into account, including spread, commission, exchange fee, deposit/withdrawal charges, and storage fee. The associated costs can add up quickly to eat into your profits.
Safety and Security
When you are trading Zcash or any other cryptocurrency, you need to understand that not everything will be done for you. For instance, you will need to contribute to ensure the security of your coins by choosing strong passwords, using 2FA, and passphrases.
What Is the Best Payment Method for Buying Zcash?
- Buy Zcash with Cash - First, you are required to buy Bitcoin with Cash through an ATM and afterwards trade it for ZEC. A possible option but not really convenient.
- Buy Zcash with Credit/Debit Card - One of the most popular payment modes to purchase ZEC although a bit on the expensive side.
- Buy Zcash with Bank Transfer - Highly convenient and reasonable in terms of transaction cost; however, it is slow compared to other payment modes.
- Buy Zcash with Bitcoin - Just trade your Bitcoin for Zcash.
- Buy Zcash with PayPal - Swift and efficient payment mode but has restricted accessibility.
Other Ways to Buy Zcash
The methods that we have specified above are the most convenient and economical to purchase Zcash and for trading ZEC on multiple platforms. Now, you are more prepared to buy ZEC and invest in other coins after going through this comprehensive guide. We will conclude this guide with some less popular alternatives you can use to acquire Zcash.
Peer-to-Peer (P2P) Exchanges - These are websites or platforms that connect crypto sellers and buyers. Instead of signing up on an exchange, you can buy directly from an individual. However, you need to ensure that you have verified their integrity through reviews and transaction history. P2P trading is not only user-friendly and versatile but also quite economical as well.
Since Zcash tokens are pre-mined, you can't get them through a mining process.
We are committed to providing you with the latest information on every coin, including Zcash, and we will continue to update this guide as more news, updates, and data come in about the token.
Frequently asked questions
Some of the crypto exchanges that we have recommended do not charge any fee for buying ZEC tokens. However, expect to pay other service charges on the platform.
Purchasing ZEC is for long-term investors who want to own and hold onto the tokens since they believe the price will increase in the long run. However, ZEC trading is done by the traders who simply want to exploit the volatility of the market to make quick profits. These are short term investment approaches.
Only you can decide the right moment to buy the ZEC tokens. Ensure that you have gone through all the guidance material available on our website.
Once again, it is you who will decide the best crypto exchange after evaluating a multitude of factors, including transactional costs, client support, intuitive UI, convenience, and other features.
Barring the countries and nations that have completely restricted cryptocurrencies and their trading, Zcash is legally available and tradeable.
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