Zcash (ZEC), one of the top privacy coins with a market cap of over $500 million, has deployed anonymous mining via the Heartwood hard fork at block 903,000.
Specifically, Zcash (ZEC) now has shielded coinbase transactions, where the miner can have the coinbase transaction sent to a shielded address.
Essentially, Zcash (ZEC) has both shielded and transparent addresses. Transparent addresses function just like Bitcoin (BTC), where everything is recorded on a public block explorer. Shielded addresses on the other hand are fully encrypted, and the origin, destination, and amount of a transaction is obfuscated.
Therefore, with shielded coinbase transactions the block reward is deposited into an anonymous address, completely concealing where the block reward is actually going. This gives miners full anonymity.
Compare this to Bitcoin (BTC) where coinbase transactions are publicly recorded. This is actually a major problem for early Bitcoin (BTC) miners who mined vast amounts of coins. Now if these early miners move even 1 Bitcoin (BTC) it causes public hysteria, like when a wallet from 2009 moved some Bitcoin (BTC) earlier this year.
In fact, this is such a big problem for early Bitcoin (BTC) miners, both due to public hysteria and the government, which could come after early miners for taxes, that early Bitcoin (BTC) miners typically don’t touch their coins.
Therefore, the new anonymous Zcash (ZEC) mining is ideal. No matter how much coins a Zcash (ZEC) miner accumulates, no one will know about it since it’s not publicly recorded, and they can use their mined coins freely without raising any hysteria or government eyebrows.
On a final note, even though this technology is excellent for Zcash (ZEC) miners, it will likely never be implemented into Bitcoin (BTC), so a large majority of crypto miners will not have access to this anonymity technology. That being said, at least miners can anonymously mine Zcash (ZEC) now, and perhaps this will bring an influx of new Zcash (ZEC) miners.