Monero (XMR) and Zcash (ZEC) are two popular privacy-focused cryptocurrencies, but they approach privacy in different ways and have distinct features.

Monero offers privacy by default. It uses technologies like Ring Signatures, Stealth Addresses, and Ring Confidential Transactions (RingCT) to hide the sender, receiver, and transaction amounts in every transaction. Monero ensures full anonymity for all users, and every transaction on the Monero blockchain is private, with no option for transparency.

Zcash, on the other hand, gives users a choice. It uses a technology called zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) to provide an option for shielded (private) transactions. Users can choose between transparent or shielded transactions. By default, Zcash transactions are transparent like Bitcoin, but users can opt for full privacy by using the shielded option. This flexibility in privacy is a key distinction from Monero.

Another important difference is the visibility of transactions. Monero’s blockchain hides all transaction details from the public, making it impossible to see transaction amounts, sender, or receiver. Zcash’s transparent transactions are fully visible on the blockchain, similar to Bitcoin. Shielded transactions in Zcash, however, hide these details, but not everyone uses this option.

In terms of mining algorithms, Monero uses the RandomX proof-of-work algorithm, which is designed to be ASIC-resistant, encouraging mining through CPUs. This ensures a more decentralized mining process. Zcash uses the Equihash algorithm, which is also ASIC-resistant, but it’s more specialized than RandomX.

When it comes to fungibility, Monero has a stronger focus on making every coin indistinguishable from others. This means all Monero coins are treated equally without any risk of them being traced to previous transactions. Zcash’s coins can potentially lose fungibility if transparent transactions are used, as these are visible on the blockchain.

Monero provides default, mandatory privacy for all transactions, while Zcash allows users to choose between transparent or shielded transactions. Monero has a stronger emphasis on privacy and fungibility, while Zcash offers more flexibility but relies on users actively choosing privacy features.