ZCash Unified Addresses are a way to encode multiple address and parameters into a single address. This way the sender of the funds can decode the address and send funds to any of the provided pools. For example, currently Orchard, Sapling, and Transparent addresses are generally encoded into a Unified Address. Some services such as exchanges may not be allowed to send shielded transactions. As a result, they require a transparent address which requires the user to understand different address types such as transparent versus shielded sapling. If the wallet gives Unified Addresses, then the user only sees one address type and the exchange can choose to send to the Transparent receiver.

The wallet is then responsible for converting this to shielded balances. Not all wallets enforce this, but our ZCash Wallet does as it is designed to maximize privacy.

Do Unified Addresses compromise privacy?

In our view, Unified Addresses can compromise privacy however in practice there is not much change. Unified Addresses contain the Transparent addresses and Transparent addresses create privacy risks via meta analysis. Some of this risk is discussed in ZCash Privacy and Metadata Analysis.

Essentially, if you were previously giving shielded addresses to service providers, then being forced to give Unified Addresses will leak metadata. For this reason we still allow you to provide only the Sapling or Transparent address. In practice and unfortunately almost no provider accepted shielded addresses. So, in cases you were giving Transparent addresses, then there is not an additional risk to your privacy though any interaction with a Transparent address in your wallet can increase metadata tracking risks.

Do Unified Addresses compromise ZCash quantum resistance?

That depends on the wallet implementation. If you use our ZCash Wallet, then there will not be a negative change to quantum resistance. However, some wallets when they later enforce shielding may send the shielded funds to a prior exposed Unified Address shielded receiver. Theoretically, if the public key of a shielded address is known, then it will have less quantum resistance. In this way, when shielding it is important to shield to addresses without prior exposure.

Details like this are why it is important to carefully select your wallet provider. If you care about security and privacy, then we recommend our ZCash Wallet.