imho this is idealistic and oversimplified.
coin value consists of many differently weighted factors, rather then just consensus of interests of some parties, involved in its life.
many theoretical papers were written about valuation. many practical answers we can get from markets and media. pretty and ugly ones.)
i think that confidence in sustainability and expectations for expansion are key factors. overfimplified too, otherwise it can take a lot of text to expand.)
2 Likes
4 posts were merged into an existing topic: Price Speculation
No, thatâs not how it works in economics. The problem is that many people mix up Value, Cost and Price as the 3 most used ones (there are others as well, and each of these has other sub-ones, but letâs stick to this main group.
In short Value: implies the utility of worth of the commodity of service for an individual.
In short Price: can be understood as the money or amount to be paid, in order to get something.
In short Cost: is the amount incurred in the production of goods, i.e. it is the money value of the resources involved in producing something.
While Price and Cost can be calculated and have numbers, value can NOT be calculated in numbers, never ever!!!
(Thatâs why i made the ironical comment to Zooko and wished him good luck explaining this to the IRS as value doesnât have a number attached and hence you canât write it down, you can not use it in a calculation, you can do actually nothing with it!).
Itâs a bit confusing, but if you analyse the 3, value, cost and price you get an idea pretty fast what is what exactly.
Now after we know that value has never any number there are only left 2:
Price: Thatâs what is paid at a given time for a given good, in our case ZEC when it changes ownership. Here you get in factors like demand and supply and others. Related to he topic and what @Autotunafish wrote, a buyer can under some circumstances of course claim tax deduction for given services or goods but not for a dev fee in my opinion as this is an event that happened bevor and should be unrelated to the therefore.
Cost: Remember how the definition is: âMoney value of the resources involved in producing somethingâ? Thatâs the miners part for sure. In my opinion here goes in everything that is needed to create new coins and of course to secure the network.
I personally donât like the phrase âMiners only secure the networkâ as in my opinion this is not correct.
For example: Letâs assume that every ZEC miners stops working for 24 hours, not a single miner/worker/asic/anything is mining on the ZEC network, what would be the effect:
-
of course the network would be insecure and 1 single miner with 1 unit could expose it, thatâs the security factor.
-
would a single ZEC transaction be able to go through? No. Thatâs in my opinion the network factor or even the transmit/transaction factor.
-
would a single ZEC be issued meanwhile? No. Thatâs in my opinion the production factor.
Of course there is the argument that the protocol does all this, but in my very own opinion the protocol is more like a formula of a recipe. It canât do anything alone, hence referring that the recipe or protocol is doing anything is just to idealistic in my opinion. Itâs the miner that does all that work actually.
With the above iâam just 100% and absolutly with @Autotunafish position that if someone can claim the dev fund tax deduction it would be the miner.
Maybe the next best real life example for a dev fund (if mandatory) would be a license to produce something. There is 0 chance someone else than the one that paid for the license to produce or provide a service can deduct these costs and this would be in our case the miner.
Actually thinking about it, it might be a good idea to think more about the license example as what we call the dev fund might be seen indeed as licensing by others, no matter itâs not worded like that.
1 Like
This post got moved by accident as it pertains directly to Joshâs proposal and not to the tangential conversation that did get moved ; )
The annuity trust option may be more advantageous for the shielded adoption measure as it allows for the annuity amount to be changed however it cannot be based on a fluctuating index in which the measure of shielded transactions may or may not qualify as ( even if it technically is not there is the danger of it being misconstrued as such (it probably wouldnât be too difficult to insinuate transactions increase when the price goes up, active wallets increase when the price goes up) most of the regulations surrounding charitable lead Trust arenât super well-defined and it could be dangerous) further specification needed (however Iâm kind of on the fence about it being too gameable anyways ) :
Maybe a bit picky, but that is not correct, active wallets and adresses go up in 2 cases:
- when price goes up
- when price goes down
Thatâs the time when money and ZEC get moved. You can analyse that your own in a graph/chart that contains active wallets compared to price movements, at coinmetrics for example.
With a price increase, active wallets increase, more than with a decrease, this is characterized by profit, when bullish, they buy coins even if they didnât have a wallet, they open it, with a decrease there is no increase in new users, no one wants to lose money when buying, there is a small the amount that catches a rebound but the percentage of such players is small relative to the army of users who appear on the pumps.
Nobody is talking about new users, the correct term is âactive adressesâ, not new adresses and not new wallets. Just active wallets and adresses within a 24 hours period.
Edit: Adding a chart so everybody can check his own that in both cases, price up & price down the active wallets increase. Best visible right now
Itâs just that simple that whenever there are price moves/trends up or down money/ZEC gets moved more.
Ok look the important part is that in no way can it be construed that the 2 metrics are in any way related.
The part that worries me is that itâs only about two steps from the index of the price of zcash to the percentage of shielded transactions per block and that may or may not be good enough. A pre-determination, should this proposal be selected, would probably be best (which falls back to the board of directors and their legal responsibilities)
As previously stated, the regulations surrounding charitable lead trust are not super-well defined.
Reg. §170A-6(c)(2)(i)(A) provides that a specified annuity amount is paid for a specified term, or for the life of an individual; after which, the annuity may change to another specified amount for the remainder of the trust term. The new amount cannot, however, be redetermined by reference to a fluctuating index, such as the cost of living index, that is referenced at the time of the change. The new amount can, however, be expressed in terms of a fraction or percentage of the cost of living index in effect on the date of transfer.(https://www.pgdc.com/pgdc/charitable-lead-trust#s2fn5)
https://www.law.cornell.edu/cfr/text/26/1.170A-6
So does basing the shielded adoption reward mechanism on transaction counts violate that clause? Utimately its up to a judge to determine and I excerise caution when assuming what that would be. I very much hope that Im wrong but Im just paranoid is all!
2 Likes
I donât think the trust should be the owner of the trademark. They will be the legal owners of the money which I believe is enough responsibility without having to enforce proper trademark usage too. It would incur more income requirements and change their tax obligations which I feel over complicates things. The Zcash Foundation is vying for ownership so they obviously understand the accompanying responsibilities that will fall upon them.
Someone else has to post now!
Im at 3!
2 Likes
Just posting to make you be able to post again âŚ
1 Like
As long as the ability to make transparent transactions exists then people will use it (people use Bitcoin right?).
The likelihood of 35,000 sequential blocks of a 4 to 1 ratio of shielded to transparent transactions is low simply because of the randomness involved. Assuming somebody were motivated and had the means it wouldnât cost much of anything to create a bunch of transparent transactions and ruin that whole run in the same way a person or group of people could start filling up every block with empty shielded transactions. This would be more costly but assuming the means and half length blocktimes then not too costly really, 40 Zec and a month or so.
I really like this idea because I know what itâs supposed to convey, perhaps a measure of signaling would work better? It would definitely have to at least be based on a measure of averaging transaction types over a given time, idk
2 Likes
Concerning the ZF grants 3 of 5 approach, I like the idea of broader input however since the legal responsibility of whatever the foundation commits to falls on the foundation board itself any decisions by this group would ultimately be advisory i.e. should this group decide to fund something that the foundation could not commit to. Is this correct?
I think expanding the board by perhaps that many more people would be much simpler considering the people of this outside group would have to uphold themselves to at least the same standards that anybody on the foundation board would have to except legal responsibility for their decision making.
1 Like
Thoughts on the shielded adoption metric, given that with the light clients available now p2p z2z is eZe : ) then perhaps basing the adoption metric on exchanges and the various providers that accept Zcash and when they begin accepting shielded transactions would give a more accurate view of overall economic adoption.
I assume a weighted metric where a larger exchange would be worth slightly more percentage then nobodyeverheardofmycoinpayments.whtevs (however a simple one to one ratio might work too) and then gauge this adoption percentage against a threshold. Thoughts?
1 Like
Just making a post after your 3rd so you are able to post again âŚ
1 Like
Thanks for these comments â to be honest after lots more discussion Iâm less enthused about the shielded adoption metric in general due to the possibility of gaming. Iâm planning on integrating some pieces of Matt/Eranâs proposal and will likely drop the metric entirely. Going to try to integrate those changes as soon as I can.
4 Likes
Iâve heard this concern mentioned a few times, but I donât think anyone described any bad gaming of this metric.
The worst âgamingâ I can think of is: the Dev Fund recipients just convince some whales to move their millions of ZEC to a z-address. And my response is: excellent! That means crucial, long-waited progress has been achieved on secure storage of shielded ZEC (namely: hardware wallets and/or shielded multisig). Thatâs a good cause for celebration and incentivization! And then enough ZEC is not held by those few whales to further incentivize shielded adoption, so whatâs not to like?
1 Like
Consider the flip side of the coin: what if a whale moves/holds in t-addrs to prevent the funding goals being met? E.g., whale acquires lots of ZEC, potentially from users who previously had it in the shielded pool, then purposefully moves into exchanges/their own keys without shielded support, reducing funding. With enough ZEC they could âvetoâ the full-shielded clause indefinitely.
5 Likes
Ah! I wasnât even thinking in that direction. Agreed, thatâs a problem.
2 Likes
I feel like if any single entity acquires more than a % or two of the supply then thatâs a bigger problem than the bonus not getting releasedâŚ
2 Likes