Can Solve The First Half-Inflation Problem In Zcash

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The halving of the mining reward in a cryptocurrency usually has a significant impact on prices as the cryptocurrency in which the cryptocurrency changes the supply, and this is well received in the crypto market.

The third half of Bitcoin (BTC), the largest cryptocurrency in terms of market value, occurred on May 11, and the reward per block has been reduced from 12.5 BTC to 6.25 BTC. Similar halves occurred in Bitcoin Cash and Bitcoin SV.

Now, the privacy-focused crypto asset Zcash (ZEC), created in 2016, which is the 26th largest crypto asset in terms of market value and uses a mining algorithm, is 1.06.400 in November. He is expected to experience a half-life in his block. The reward per block after this halfway will be reduced from 12.5 ZEC to 6.25 ZEC like Bitcoin.

Although the supply of ZCash is limited to 21 million like Bitcoin, the inflation rate is quite high compared to other big cryptocurrencies. According to the data provided by ViewBase, Bitcoin’s inflation rate is 1.44% compared to ZCash with an annual inflation rate of 28.19%.

Zcash’s high inflation rate has long been a concern for investors and the analyst community. In December 2019, popular analyst Josh Olszwick said, “If ZEC was a country, it would have the highest 8th inflation rate in the world, with 32%.” said.

Many observers argue that the halves create a supply gap and thus put upward pressure on prices. This belief stems mainly from the serious increases in Bitcoin price after the first two halves in November 2012 and July 2016.

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In recent months, Zcash has been showing its all-time low against both the US dollar and Bitcoin. However, after the halfway expected in November, investors may stop punishing ZEC for the high inflation rate, which can help the price of cryptocurrencies.

In addition, crypto assets generally tend to move upward after the split. For example, Litecoin (LTC) increased by 100% in the second quarter of the year, despite its weak move against Bitcoin and the U.S. dollar after the halt occurred on August 5, 2019.

Similarly, it will not be surprising for Zcash to decrease the inflation after the half and move on to an upward trend in terms of price.


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