- Foundry Digital is debuting a Zcash mining pool.
- The top miner is betting big on a cryptocurrency that remains more than 90% below its 2016 trading level.
- Digital asset entrepreneurs have said Zcash is still relevant as people increasingly value privacy.
Privacy coins were the talk of the crypto world last year. They’ve since nosedived in value and are trading well below their all-time highs.
But they still have potential, say some crypto bigwigs. Foundry Digital, the world’s leading Bitcoin mining pool operator, this week announced it would debut a mining pool for Zcash in April.
“[Foundry’s move] reflects growing confidence that privacy-preserving networks will remain an important part of the digital asset ecosystem, particularly as institutional participation continues to expand,” Charles Chong, head of strategy at crypto investment firm BlockSpaceForce, told DL News.
Foundry betting big on Zcash, the 30th biggest coin by market value, comes during a bear market where most major cryptocurrencies have plunged in price. But Zcash has fallen harder than most of its peers.
Despite praise from top digital asset entrepreneurs like the Winklevoss twins and Arthur Hayes, Zcash is still 93% below its record.
Demand from institutions
Foundry’s Zcash mining pool won’t be any mining pool — it’ll be aimed at institutions.
“Zcash has matured into an institutional-grade asset, but the mining infrastructure supporting it hasn’t kept pace,” Foundry CEO Mike Colyer said in a statement, adding that the company believes the coin “plays a critical role in advancing financial privacy.”
Foundry said that the pool will allow big players to hook up to the Zcash network and process transactions the same way they can with the company’s Bitcoin pool.
The idea is that Foundry’s Zcash pool becomes the standard for public companies and institutional miners, the Rochester, New York-based firm said.
Who’s really interested in Zcash?
While Zcash got a boost last year, hitting nearly $700 per coin, its record still stands way higher: $3,192 — a level hit back in 2016.
Who’d be interested in mining the asset, then? Big investors have said that privacy coins will be increasingly sought after as the right comes under threat around the world.
Last year, AngelList founder Naval Ravikant wrote on X that while “Bitcoin is insurance against fiat,” Zcash is “insurance against Bitcoin” — making note of privacy concerns around the biggest public blockchain.
Then, crypto entrepreneur Arthur Hayes started talking about the coin, telling his followers how to store it. He also made bold predictions for where the coin’s price was going.
Winklevoss Capital, the venture capital fund owned by billionaire twins Cameron and Tyler Winklevoss, even backed a Zcash treasury company, with Tyler Winklevoss claiming “Privacy’s become a rare, vanishing commodity.”
Zcash also gained institutional backing from Coinbase, Andreessen Horowitz, and Galaxy Digital last year.
Tim Sun, senior researcher at HashKey Group, told DL News that Foundry’s involvement sent a strong message on the coin’s long-term viability.
“Large financial firms are increasingly comfortable operating on public blockchains, but they still require the same protections they expect in traditional markets — including transaction privacy,” he said.
“Privacy technologies like those pioneered by Zcash can play an important role in enabling institutions to move operational activity on-chain without exposing sensitive counterparties or transaction details,” he added.
Barry Silbert, CEO of Digital Currency Group, which owns Foundry, is an altcoin enthusiast who has said he likes projects that can deliver “500x returns.” He said last month that “5%-10% of Bitcoin over the next few years” will move into privacy-focused cryptocurrencies.
Legendary investor Ray Dalio has raised concerns about Bitcoin’s lack of privacy in recent months.
Zcash emerges from the darkness
Zcash is the second-biggest privacy coin after Monero. It got off to a rough start this year when developers in January quit en masse from Electric Coin Company, the firm that built the cryptocurrency.
The coin’s price plunged further — despite developers reassuring the crypto community that protocol was “unaffected” by the mass-exodus.
Still, not long after, the US Securities and Exchange Commission dropped a years-long investigation into the foundation that promotes Zcash.
And earlier this week, the former Electric Coin Company staffers said they raised $25 million to continue work on the privacy-focused cryptocurrency, with backing from Paradigm, Andreessen Horowitz, the Winklevoss twins, and other prominent investors and funds.
Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.
