Why is Zcash, favored by V God, the worst performer among the three major anonymous coins?
This article is from:Hashpie (ID: hashpie), Author: LucyCheng, forwarded with authorization.
Hashpie (ID: hashpie)
Hashpie (ID: hashpie)
Before the official excavation, the futures price has been raised to about 1,400 US dollars on BitMEX; the genesis block was just born, and the price was immediately driven up to 2 million US dollars per piece - Zcash launched in 2016 was undoubtedly a dark horse in the currency circle at that time. Less than half a year after its launch, it was accepted by AlphaBay, the number one black market on the dark web. Related anonymous technologies have also been favored by projects and companies such as Ethereum, TRON, Quorum, an enterprise-level blockchain under JPMorgan Chase, and Starkware, an Israeli technology developer.
Part of the data and information comes from: Coinmarketcap, Bitinfocharts, feixiaohao
However, so far, the usage rate and popularity of Zcash in the dark web are still not high, and the proportion of private transactions in the network is less than one-fifth of the total transactions. Compared with Monero, which has gradually developed into the most active currency in the darknet world, and Dash, which is supported by more than 4,900 merchants, the development of Zcash, which was born late but has received more support from big Vs in the circle, seems to be developing in the past three years. Not ideal.
Unlike Zcash and Dash, all transactions of Monero among the three anonymous currencies are conducted anonymously. Coupled with its determination to resist ASIC, Monero can enter the darknet market quickly and on a large scale , and at the same time won the title of the new darknet currency king (for details, please refer to the
"Why does the low-priced Monero squeeze out BTC and become the "Dark Web Coin King""
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Data source: Coinmarketcap
In theory, the multi-layer key structure adopted by Zcash is suitable for different application scenarios; while allowing some users to shield transactions, it is also close to regulatory requirements to a certain extent, avoiding the risk of being completely banned by government departments. Thanks to this, Zcash is similar to Dash and is supported by more exchanges than Monero, including even Coinbase, which is committed to compliance (launched last October and has been delisted this month). However, this kind of "black and white" approach has virtually reduced the desire of darknet users to use. After all, complete privacy and anonymity are the pursuit and necessary basis for the darknet market. And this may be the reason why the usage rate of Zcash's privacy technology is still not high after the upgrade of Zcash technology.
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In fact, the failure of Zcash's private transactions to be widely used in the early stage is also related to its generation cost. In the Sprout and Overwinter phases, in order to generate zero-knowledge technology proofs that can be used by miners, the sender must undergo a series of precise calculations every time a completely private transaction is created, which takes tens of seconds and takes up to 3 GB of memory for the transaction; At that time, most users were forced to simply give up using privacy technology to conduct transparent transactions directly. It wasn't until Sapling was upgraded and optimized in October last year that the time it took to initiate an anonymous transaction was shortened to less than one second and the required memory was also reduced to about 40 MB, making mobile transactions possible; and the next stage of Blossom upgrade and adding off-chain After the lightweight transaction technology BOLT, its privacy transaction technology will be further accelerated.
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Zcash's roadmap is divided into four phases
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On-chain activity of the three major anonymous currencies (data source: https://blocktivity.info/)
Josh Swihart, executive of ECC, an anonymous currency development company, said in an interview that their goal now is to turn Zcash into a platform that people can build for all DeFi applications. These jobs can also be done using Zcash. Eventually, we hope that Zcash Shielded can be used in Ethereum smart contracts.”
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Development process dragged down by team conflicts
When Overwinter was upgraded in June last year, D. Jane Mercer, the sole maintainer of the Zcash Windows wallet software, threatened the community due to financial difficulties, saying that if he did not receive work funding, he would stop client development and create new coins to compete with Zcash. In June of this year, Simon Liu, a former employee of Zcash’s parent company, also filed a breach of contract lawsuit against the company for up to $2 million due to equity disputes; in September, ECC also sparked a dispute with the Zcash Foundation over its trademark. The financial deficits shown in the Zcash Transparency Report in May and September this year have made its situation even worse.
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The left picture shows the expenditure categories of ECC companies in the second half of 2018; the right picture shows the expenditure categories of ECC companies in the first quarter of 2019 (picture source: Zcash transparency report released by ECC companies)
According to the report, in the first half of 2018, ECC had already experienced the problem of making ends meet, while in the second half of the year, it showed signs of further expansion of the deficit. Based on the average price of $60 per ZEC during this time period, the total income of ECC in the second half of last year was $2.205 million; minus the total monthly expenditure of $700,000 and the additional promotion funds of $950,000, its total income in the second half of 2018 was nearly Shortfall of $3 million. Moreover, Zcash’s loss-making state has continued to this day. After ECC adjusted its expenditure share, the company still suffered a loss of US$558,000 in Q1 of 2019.
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The reasons for these contradictions and financial difficulties are more or less related to Zcash's founder reward mechanism. In order for Zcash to start smoothly, when the project was established in 2015, after community discussions, it was decided to allocate 20% of the ZEC produced in the first four years to the founding team, and the other 80% to miners. However, as the price of ZEC fluctuates, the rationality of the distribution ratio has repeatedly aroused controversy in the community; at the same time, the implementation deadline of the plan is approaching in October 2020, which also makes the community worry about the developer's follow-up funding.
It stands to reason that, faced with a series of thorny governance and funding issues, the community urgently needs to find new ways to maintain operations. But so far, the team has not found a suitable mechanism for members to reach consensus. In August, ECC CEO Zooko Wilcox called for the establishment of a new development fund, but failed; in July, the appearance of the peaceful hard fork Ycash did not bring much impact on the market. According to Howard Hoo, the founder of the forked coin, Ycash reduced the founder reward of the original chain network from 20% to 5%, hoping to solve the future financial difficulties of the original chain development team to a certain extent; but Ycash has not yet Included by Coinmarketcap and the daily trading volume during the month is generally below $30,000.
Although Zooko Wilcox once posted a blog post promising that ECC will go all out to find new support; but if the team fails to deal with these funding issues within a year, it will largely affect the subsequent development of Zcash. And Zooko also admitted frankly at the Zcash conference held at the end of June this year that ECC must find a solution as soon as possible, otherwise the company will have to abandon the project, "If the funds are available for the project to run for less than 12 months, we can only be forced to Engage in other business to protect the company's revenue."
