Why Zcash's optional privacy doesn't work
Zcash's reputation as an anonymous cryptocurrency has long been taken for granted. However, a study by Arkham revealed that even advanced cryptography cannot protect users from de-anonymization if privacy is not effectively implemented.
Together with the team from the Bitcoin mixer Mixer.Money, we explore why anonymous coins don’t work "out of the box" and how to establish genuine financial privacy protection.
The Illusion of Privacy
In December 2025, the analytical platform Arkham reported that it managed to link over 53% of all Zcash transactions—both public and private—to known individuals and organizations. More than 48% of inputs and outputs were associated with specific entities.
Zcash creator Zooko Wilcox partially refuted the analysts' claims. According to his statement, the platform did not de-anonymize "any ZEC" stored in shielded pools.
However, Arkham's research indicates that shielded pools cannot protect users who have leaks at other stages.
"This clearly demonstrates that privacy is not a property of the coin, but a result of user behavior," emphasize Mixer.Money.
Zcash's architecture is inherently a compromise. The network features two types of addresses: transparent (t-addresses) and shielded (z-addresses). The former operate like Bitcoin—every transaction is visible on the blockchain. The latter use zk-SNARKs cryptography to conceal the sender, receiver, and amount.
In practice, most network participants opt for transparent addresses due to their simplicity and the fact that exchanges only accept deposits and withdrawals in Zcash on these addresses. Transitions between address types create correlation points that allow analysts to reconstruct transaction links.
As noted by researcher Seth For Privacy, Zcash attempts to be everything for everyone instead of focusing on privacy technologies.
The project aims to provide easy entry into the crypto world while remaining accessible on centralized exchanges. Simultaneously, the team is developing private payments through iterations of cryptographic solutions. Work is also underway on ZSA (Zcash Shielded Assets) and smart contracts to compete with Ethereum.
This diffusion dilutes development resources. Despite significant funding and a surge in cryptocurrency value in October and November 2025, Zcash still lacks full support for shielded addresses in popular hardware wallets like Ledger and Trezor.
Privacy as Behavior, Not Technology
The key takeaway from Zcash's story is universal and not limited to one coin. Advanced cryptography does not protect against linking to KYC exchanges, transferring funds without breaking the transaction history, using a single address, or predictable transaction timings.
"This applies to any system where privacy is optional," note Mixer.Money.
Relying solely on an "anonymous coin" creates a false sense of security. Users may believe they are protected simply by using Zcash, yet they make mistakes that completely undermine the cryptographic guarantees of privacy.
Arkham's study showed that analysts can reconstruct transaction links through temporal pattern analysis, matching amounts entering and exiting shielded pools, and tracking interactions with known exchange addresses. None of these techniques require breaking cryptography—just observing user behavior.
Why Bitcoin with Mixers is More Pragmatic
Unlike Zcash, Bitcoin has never been marketed as a private system. Its blockchain is transparent by default—every transaction is visible to all network participants. This makes the privacy model more honest and manageable.
Bitcoin mixers address a specific problem—they break the on-chain link between the input and output of funds. They do not promise abstract anonymity but provide a means to achieve a specific action: separating the source of funds from a new address, breaking behavioral and graph links, reducing clustering risks, and continuing to use Bitcoin without a "history tail."
"Private coins assume that the user relies on the protocol's promises. Bitcoin mixers require conscious action," summarize Mixer.Money.
In this context, a mixer serves as an infrastructural tool operating on top of Bitcoin. The service does not depend on the architecture of any specific private coin and does not require users to understand address types or cryptographic nuances.
The difference between Zcash and Bitcoin mixers lies not in the level of cryptography, but in the model of responsibility. Zcash offers privacy as an option but does not control its application: users can enable shielded addresses or remain on transparent ones.
Bitcoin mixers require deliberate action but provide predictable results. Users understand where the history breaks and what risks they are mitigating. This reduces the illusion of security and returns control to the user.
"Bitcoin mixers emerged before private coins and remain in demand. The market favors practicality: most crypto investors will prefer Bitcoin as their primary asset with the option to use privacy tools when necessary," note Mixer.Money.
Knowing What to Do
The story of Zcash illustrates that privacy cannot be "turned on" with a single button. It must be ensured during the receiving, storing, and transferring of funds.
In this model, mixers play the role of an intermediate layer of privacy. They do not replace user caution but address Bitcoin's key issue: public connectivity of UTXO.
"Privacy is not a property that can be purchased with a coin. It is a process that requires attention at every stage," conclude Mixer.Money.
Built-in privacy does not guarantee anonymity if the user makes mistakes. Bitcoin combined with tools like Mixer.Money does not promise perfect anonymity, but offers users a transparent and manageable privacy model. This, rather than the label of a "private coin," determines the actual level of protection.