ECC update for Feb 16, 2024

General
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Hi Zeeps.

You and me, we’ve got a lot to talk about this week.

A couple of weeks ago I posted the decisions that came out of Zeboot, along with rationale and timelines.

But before I get to updates on those items, I’d like to revisit why most of you, and I, are here.

This community and project stands for privacy, it is synonymous with it. But it is also something more than that. Privacy is the garment we wear to protect our dignity, security, consent and freedom. Things worth protecting. It’s our raison d’etre (yeah, fancy language from a fancy guy :wink: ). This is the very reason for the project.

This is what we should be building. Nothing else, nothing less. Seems pretty simple.

There was a dream that was Bitcoin. It was going to bring economic freedom, privacy via obfuscation, and the choice to opt out of systems that have been stripping financial freedom from us, bit by bit. But many bitcoiners started building the new system to fit into the old system, and today Bitcoin is captured. It is now surveilled and embedded into the legacy financial system it was intended to supplant. And all the bitcoiners rejoiced!

A new system cannot thrive in an old system. “No one sews a patch of unshrunk cloth on an old garment, for the patch will pull away from the garment, making the tear worse.”

I understand. We all want wealth. It promises security for us, our loved ones and a promises a better life. Bitcoin’s mission was something bigger, and it morphed into “number go up.” It traded its soul for paper bills.

I’m hearing the draw of that same siren song in our ranks. Some of you message me bluntly and directly. And I’m not immune either.

The only way forward is to chart an unwavering course and tie ourselves to the mast.

At ECC, our focus is on building a new system, outside but adjacent to the old system. Our roadmap and efforts will reflect that.

To build the “network state” we want to see, we need a full stack of capabilities. The protocol is the bedrock, and its amazing, but it is not enough.

In my view this new system will be user-friendly, widely available, shielded-only with tools for optional disclosure, and its supporting infrastructure will be distributed and robust.

We will cease to work on things that compromise our mission, and focus our efforts on this outcome. More soon…

Speaking of the old broken screwed-up system…

A number of us at ECC and our attorneys have had our hands full compiling information and documentation in response to a U.S. Securities and Exchange Commission (SEC) subpoena that was served in September. The good news is the bulk of the work on this effort done. We’re finished with the information gathering stage, we recently submitted our response, and we’re happy to return our full attention to building our future.

Media reports suggest the SEC has issued similar subpoenas to multiple others in the cryptocurrency community. Regardless, our response to this inquiry has required a considerable time commitment by some ECC team members, and resulted in an sizeable legal bill. ECC has always been transparent and cooperative with the SEC. We will continue to be, and we are committed to keeping the Zcash community updated on any new events.

Challenges will come, but we remain undeterred and building.

Yes, we’re building…

Zashi

We’re making great progress on ECC’s wallet. The sync performance is vastly improved and we’re in the midst of adding Orchard support. We’ve locked in scope and have started pushing new ideas and improvements to a planned 1.1 release. We’re working to deliver the iOS wallet in March. We are behind on the Android implementation, and risk missing the same date for its release. The team is working hard to ensure it follows iOS quickly. We also engaged with a good friend of the project to begin a security audit this week. It’s all coming together nicely.

The wallet will include basic functionality out of the gate, with an intuitive UX. Eventually, I would like Zashi to be the platform on which other Zcash-based capabilities are launched from ECC. There are many great Zcash wallets out there including Edge, Unstoppable, Ywallet, and Zingo!. The increasing diversity of experiences is fantastic and Zashi will be a meaningful addition.

R&D

Led by @daira, the R&D team has estimated the amount of work and time necessary to deliver a hybrid Proof of Stake solution under the assumption that the team would be able fully focus on it. They also looked at what is realistic given other work on Zashi, zcashd retirement, and other minor updates.

There are two major chunks of focus needed:

  1. The abstraction layer (design phase completion, implementation phase, and a couple of prototype phases)

  2. The BFT protocol selection and implementation

The best case for the abstraction layer (#1) is ~13 weeks give or take, with less certainty the further out we get.

We’re not clear yet on the timeline for the BFT work (#2). We’d likely investigate 2 options with each taking about 4 weeks of research before being able to lock something in.

What’s the punchline?
It’s likely a 18-24 month effort.

We discussed the option of a direct cutover rather than the hybrid model, similar to what Ethereum did. While we haven’t yet fully investigated this possibility, we theorize that might take much longer than a hybrid option due to testing cycles, and as @daira pointed out, raise some security concerns because we don’t know if ZEC is as widely distributed as ETH was.

Daira is completing Design Phase 2 over the next couple of weeks while we continue to work through our roadmap for Zashi and R&D.

Alliances and Governance

This week ECC-led PGP (Pretty Good Policy) kicked of a new year in Washington DC under @paulbrigner’s continued leadership, along with the Blockchain Association and a new a co -sponsor, Coinbase. It’s nice to have good friends like these. These sessions will now be live-streamed!

In cooperation with others in the Zcash community, Paul has also begun working on how ECC will participate in gathering and assessing community sentiment. As with Zeboot and other efforts, we are committed to engaging a broad and diverse community to inform our thinking and the decisions we make.

The Bootstrap Board

Bootstrap had a board meeting this week. That’s always fun.:wink: j/k We have a fantastic board including Alan, Christina, @ml_sudo, Zaki and @zooko. They are insightful, helpful and very much engaged. We spent a considerable amount of time working through financial details and plans. ECC is totally understaffed and we have big world-changing-forever kind of ambitions. We’re feeling it. They’re leaning in and I’m grateful.

Ok everyone, talk soon. As always, keep the thoughts and feedback coming! I appreciate you all.

Onward.

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:fire::fire::fire: onward

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How is going hybrid, then full PoS giving us more information on the distribution of ZEC, and could it possibly be any worse than viaBTC having a 58% mining dominance?

This sounds like a luxury I’m not sure we have. Our back is against the wall.
A full transition might take longer than transitioning to hybrid, but not compared to full PoS: now to hybrid, then full PoS vs now to full PoS

And something I read in another thread:

  • if we are too slow and price doesn’t pick up, then no less resources, store of value premiss dies, toxic brand association.
  • if price does pick up, transitioning to full PoS has more financial risk to all parties involved, especially those newly evangelised using the protocol.

→ Now’s the time to take the risk and try a full transition

Competition, although friendly, is getting extremely good (Namada, Penumbra, Aleo, Aztec, Ironfish), and the dynamics of shielded pools incentivise users to congregate towards the biggest solution/anonymity set.

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Thanks for the update Josh, I’m loving the transparency.

RE the timeline for developing hybrid POS, you say 18-24 months with the condition that the team is fully focused on the effort… I would see that time reasonably double as things pop up that need to be dealt with (see sandblasting attack etc), estimates generally don’t forsee all problems, core team leaving, training up new recruits etc etc

Have you considered directing some of the block reward to holders of zec in orchard pool as a stop gap measure? Something that has been briefly discussed here: Coin Voting / Shielded Airdrop / Proof of Balance - #37 by daira

It could then buy more time to develop to POS and have the double effect of improved orchard pool adoption AND reduce the immediate selling of Zec from miners

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The SEC seems to have been busy handing out subpoenas to everyone from PayPal to Gemini Exchange and several others over the last several months. I hope them requesting info from so many doesn’t end up having a chilling effect on crypto and innovation in general.

Can you, or @daira clarify this part about PoS? The timeline seems to say that about 13 weeks needed for abstraction and 4-8 weeks for research to lock something in for BFT = 21 weeks~6 months. Where is the other 12-18 months needed?

Do we have any info on if a hybrid PoS model is safer for a smaller network than a straight switch?

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I’m not sure the risks associated with a large mining pool having 58% hashpower is equivalent to the risks of choosing a bad PoS model.

The former could potentially try to double spend on the network (and Josh has been talking with viaBTC to help mitigate this) while the latter could grind the entire network to a halt or fork if done badly. I think PoS is the future for a number of reasons but consensus is a tricky thing that we don’t want to screw up by rushing into a half-baked solution.

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As someone who has been obsessed with UI for close to 30 years (20 professionally), this is unequivocally the missing link/secret weapon. Happy to help out here in any way I can.

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(Disclaimer: I haven’t been directly involved in the PoS work, and only helped scope the 21 weeks part.)

For context, “lock something in for BFT” corresponds to tfl-book issue 116 in the TFL DAG, which is part of (but not all) the work needed to complete Design Phase 4. Most of the nodes in the graph after that phase are “rather large” (things like “design staking” and “implement the production BFT integration”) for which the timeline is not yet clear (as @joshs said above).

Also remember that there is necessarily time between releasing the final production-ready release of a full node that supports a given network upgrade, and that network upgrade activating on the network (to allow for that version to be deployed everywhere it needs to be, and older full node versions that don’t have support for the network upgrade to reach their End-of-Support height). Our target interval for past NUs was around 3-4 months (zcashd has historically been configured to reach EoS 16 weeks after release, so a 10-16 week interval), though we in some cases worked to shorter intervals. I would expect a NU that deploys hybrid PoS to require at least that full interval, if not more like 6 months (as a change to the core consensus mechanism is more involved than a change to the consensus rules enforced by it).

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It feels like too late. Is there an option to integrate zcash into DEFI and DEX faster than that? Maybe that can buy some time

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PGP (Pretty Good Policy) is good

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would more funds help to get it done faster? if yes, what are the options on the table that can get us more funding for ECC?

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Selling agoric/BTC, and hiring people? You know, what all companies do when they need to actually grow? It’s very strange how conservative they are with adding more engineers to the mix.

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Thanks for the update!

Great to hear this! I hope to hear more details.

I hope your vision is to eventually decentralize developing and funding. So, at some point, can you explain how or if you plan to get off the inflationary funding model and put the power into the hands of developers so they can create their own uses cases without a centralized funding source making all the decisions? I hope by now you guys can see its impossible to fund, manage and think of all the use cases. Just a simple yes we plan on ultimately replacing inflationary funding with a gas/fee funding model is good enough for me at this point. And if is a no we plan on using inflionary funding, at least you are being transparent about it.

This would be huge (i hope it means a laser focus on the blockchain and assets). The biggest risk is the edge use case funding. We need a gas/fee model so that people like @zancas can take the ball and run with it. We provide the platform, assets and blockchain/infrastructure; but they need to fund their ideas on how the assets/blochain are used in what I call the edge use case, and the markets they want to go after. If people like him are right, everyone wins; if not it doesnt jeopardize the mission.

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Rousing words indeed. :heart::heart::heart:

“There was a dream that was Bitcoin. It shall be realised. These are the wishes of Zcash Aurelius.”

Yes yes yes! We must eschew the number go up band wagon at all costs! A privacy is normal network state, adjacent, but separate and never to be captured by the old system.

I’m not sure the real Bitcoiners rejoiced though, @joshs , as i would venture that all true Bitcoiners are now called Zcashers. Those late-stage capitalists rejoicing at the BlackRockification of what was supposed to be a life raft out of the corrupt old system are financially comfortable opportunists, not necessarily either good nor bad humans, but certainly not true to the guiding principles of the cypherpunk movement that birthed into existence the pristine asset upon which their new house of Bitcoined-sand has been built.

As Zooko once said:

“Their aims were political and their means were technological, and that’s the cypherpunks in a nutshell…”

And when the enemy army captures your finest weapon and turns it back upon yourself, what do you do? Do you run, do you capitulate? Of course not- you simply do what the cypherpunks did: you build a better weapon and deploy this weapon, this time, with tactics that have been honed and perfected in the wargame opening gambit that was the early days Bitcoin deployment.

Zcash is our new weapon. The Zcash community, led by ECC, ZF and ZCG are the deployment.

The cypherpunks’ political aims are alive in our community, the cypherpunks’ technological means are alive in our protocol and we are loyal to the true emperor, Satoshi Nakamoto. Father to a murdered Bitcoin, Husband to an Ethereum wife, Zatoshi will have his vengeance in this life or the next.

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fwiw, viaBTC is under 45% of the hash rate for the last couple weeks. I expect it will remain around there.

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I look forward to your feedback on Zashi, what it is and what you would like it be.

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We have limited runway with current cash and coin holdings and an uncertain dev fund past Nov. We have liquid BLD holdings today but can only liquidate a small amount per day on the open market based on volumes and liquidity. The HTX volume is inflated - Gate.io and Osmosis numbers are the ones to watch. We’ll hire when our financial position supports it.

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Awesome to hear that. And yes, I’m down to help test Zashi.

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Only by turning to the [PoS] mechanism can it be possible to upgrade to resist quantum computer cracking.
Resistance to quantum computer cracking is the core underlying security
Ask policymakers to make brave decisions.
Ignore the noise of those [Pow] short-term interests.
If you don’t do this, when the avalanche crisis comes, everyone will run away.
[PoS] is the right answer in the long term

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Quantum computers are not better than classical computers in every situation.