While 2018 was largely dominated by the declining price of ZEC (and all major cryptocurrencies), it marked a significant milestone in the evolution of Zcash with both the Overwinter and Sapling network upgrades taking place. As a result, shielded transactions can now routinely be sent in a couple of seconds using a fraction of the RAM previously required (~40MB). Despite this, the percentage of shielded transactions on the network is still low, and as such, there is a greater emphasis on the adoption and usability of shielded transactions.

Sapling was activated on October 28 2018

Sapling is an enabling technology that allows for other services and tools to be built, and there is plenty to look forward to in 2019 expanding upon the successes of this development.

1. Light Client Protocol

The official zcashd client remains the only way to send shielded transactions (it can be used in conjunction with a GUI such as zec-qt-wallet). While Zcash is well supported on many mobile applications, they all only support transparent addresses which are functionally identical to the (lack of) privacy properties of Bitcoin.

While Sapling enabled proofs for shielded transactions that may be feasibly completed on a mobile device the issue remains that currently, a mobile wallet would need to act as a full node with the associated costs of bandwidth, storage space and processing power. As explained by Ian Miers, currently, to be notified you received a (shielded) payment from someone else, you need to scan the blockchain and try and decrypt every transaction. If you can decrypt it then it is meant for you. Clearly, downloading all transactions is very bandwidth intensive hence a new light client protocol is being developed to reduce some of this burden and dramatically reduce the requirements for low-power, bandwidth-conscious devices such as mobile phones.

While the light client protocol is still in development the approach taken is to reduce the size of blocks (known as compact blocks) only to contain enough data to detect Sapling transactions and update witnesses. Light clients, such as mobile wallets, obtain these blocks from one or more intermediary proxy servers that broadcast the compact blocks, which they then process locally to update their view of the blockchain. As a light client is still receiving transaction data for all transactions there is no loss of privacy using this scheme (alternative approaches are then required if the full details of a transaction, such as the memo field are needed). The use of compact blocks amounts in a reduction of 80% in bandwidth use for detecting incoming transactions.

The first iteration of the light client protocol will still impose a relatively heavy bandwidth constraint to attain the requisite privacy properties, but it has been noted that future developments regarding Private Information Retrieval schemes as discussed here and in the future other improvements that may be integrated into the base protocol.

2. Reference Wallet

To spur the adoption of shielded transactions and in conjunction with the light client protocol detailed above the Zcash Company are engaged in developing a reference light client wallet. In a blog post introducing the reference wallet:

Zcash Company is building a reference light client wallet featuring a Sapling shielded address that can receive and send transactions. The objective of this project is to prove that shielded transactions can work on mobile devices and to build reusable solutions for functionality required to support shielded addresses.

Development of the reference wallet on Android is progressing and will be released in the first quarter of 2019 and is demonstrated in the following video detailing the general use screens: