Funding: The Founders Reward


#1

Folks, I just posted a new blog post explaining how the Zcash Company is funded. This is important! Please check it out and let me know your opinion:

https://z.cash/blog/funding.html


#3

From the blog post, it can be seen Zcash will adopt exact Bitcoin's emission rate. Personally i think this is bad idea, it might cause highly speculative pump and dump cycles which aren't good for long term growth. Isn't a smooth emission curve with gradually decreased block reward better ? In addition, many people will think that 25% of mined coins in first 4 years is unjustifiably HUGE amount.


#4

@hud We considered and rejected a smoother money supply curve: https://github.com/Electric-Coin-Company/zcash/issues/143


#5

As I explained in Zooko's AMA thread today, I think Zcash has shot themselves in the foot with the funding model they choose. It is so unfortunate, because the anonymity technology of Zerocash is superior to everything else.


#6

I'm of the opinion that it should be 100% premined and sold by your company at whatever value you think is appropriate for two reasons.

1.) It is the most fair way to distribute the currency without giving advantage to the technically savvy, and early adopters. This is pretty much the same way any company or resource is publicly traded. Anything that isn't 100% premined is subject to pyramid scheme effects.
2.) It ensures a stable known supply immediately, which forces the Z-Cash to establish a permanent basis for funding network security. (This is an open question for Bitcoin, so it would be nice to just rip the band-aid off.)

Anyway, I think your current plan is generous. I understand 100% premine isn't popular in the community, whether or not it's the most ethical and pragmatic.


#7

Again another reinforcement on my point that Zcash should be targeting corporate markets for privacy on public block chains:

http://www.coindesk.com/blockstream-55-million-series-a

I hope Zooko et al are having a frank discussion with their investors and contemplating the points that have made in his AMA this past Monday.


#8

First, in a post at Bitcointalk.org, I am suggesting the perhaps the best strategy for Zcash is to apply the existing investor's $1 million to investment in the Zcash corporation and then go pursue partnership/collaboration with Blockstream targeting the corporate market for privacy on public block chains. See my post in this thread that links to the $55 million ($70+ million total) that Blockstream has received! In the Bitcointalk.org discussion, I also suggested they should remove the 11% "premine" and also release a Zcash to speculator markets and either fair mine it or sell an ICO (sell the legal ICO!), so they can go after both the corporate market and the speculator market. Their current plan doesn't work well for either of those target markets. I also explained at the Bitcointalk.org discussion why the speculator market is the only valid market other than corporate, because the actual end user market for anonymity is unrealistic (politically and technically).

My rebuttal to your points:

  1. Selling a private placement is not fair, free market, and thus doesn't maximize capital raised from speculators (as compared to an ICO). All the speculators have been waiting for years for Zerocash to be implemented and Zcash has all the inventors of the technology on its team. Thus the speculators are ready to dump $millions into an ICO. And venture capitalists are poised to dumps $10s of millions in Zcash corporation for targeting corporate markets. The speculator markets are wild west speculation. That is what they are. Embrace them.

  2. Distributing all the coins at once, creates no network effects and ecosystem. Geez you have a coin with 1000 owners. And they can trade with themself in a circle-jerk ecocasm.

Their current braindead plan isn't generous to anyone, not even to themselves nor their investors!

This post is intended to be constructive and sincerely helpful. I have no vested interest, other than wanting to see the development of this technology proceed optimally.


#9

I'm not sure what you're going on about in your first paragraph. Z-Cash isn't compatible with Bitcoin's design. Pruning, CoinJoin, and Coinswap are not possible. That doesn't mean Z-Cash is bad, just that it makes different tradeoff's that conflict with Bitcoin Core.
As for selling "fairly" mined z-cash, I'm not sure why that's any better than just premining everything and then selling it on an exchange. If it's good in a small sense then it should be good in the larger sense.

There is no danger of speculators purchasing all of the coins at once, as long as they price them high enough on an exchange, and they can always raise the price if they think is a realistic concern.

I did not argue all coins should be distributed all at once. Distribution takes place on an exchange at fair market value.


#10

You make assumptions about my reasoning that I never stated. My suggestion to partner/cooperate with Blockstream regarding developing privacy for public blockchains with a focus on corporations, has nothing to do with Bitcoin's block chain design. It has everything to do with the fact that Blockstream is cooperating on OpenLedger with IBM and Linux Foundation and has received $70 million in funding. Blockstream is experimenting on many different blockchain designs that could be sidechains of Bitcoin and/or for work they may do on other projects such as OpenLedger. Since you only mention Maxwell's CoinJoin and CoinSwap, perhaps you are not aware he also helped invent Confidential Transactions (or you just conveniently omitted that) which is also not compatible with Bitcoin's block chain design (or at least not without a hard fork).

Please stop being even mildly condescending to me (see bolded phrase and note you tried to attack my reputation in my "Fundamental challenges?" thread) or I will be forced to put the mirror in your face.

I was comparing to selling the pre-mine to a non-free market of private placements as compared to a public price discovery mechanism such as an ICO (which is roughly equivalent to your idea here to sell all the coins on an exchange). Again you put words in my mouth that I never stated, because you failed to comprehend the distinction I was making.

The issue I pointed out is just to make sure the coins are widely distributed (i.e. not concentrated into fewer HODLers). And to give time for the coin to be adopted as the coins are distributed, so that wide participation (and thus wide distribution) are achieved.

You only stipulated, "100% premined and sold by your company at whatever value
you think is appropriate". That is not free market price discovery.


#11

Hey @Uninvention and @shelby3: I just wanted to say that:

a. I appreciate both of your ideas about funding, business model, and distribution of the currency, but

b. I don't appreciate the increasing feeling of discomfort I get from reading this thread. I'd like for this forum to be a calm and friendly place where newbies don't find people squabbling with each other when they walk in the door, because then I figure those newbies will quietly back out the door again.

As a reminder, here's my current rough draft of a "Code of Conduct" for this forum:

  • We, the moderators, don't discriminate among topics (for example discussion of alternative ideas or alternative projects, forks, etc.).
  • We definitely don't discriminate among opinions (that would be censorship).
  • We do discriminate between helpful and harmful methods of communication. If somebody is being a jerk and souring the conversation for everyone else, we'll do something about it.

(from https://forum.zcashcommunity.com/t/can-zcash-be-forked/157)

I'm going to ask Maureen Walsh, Zcash Co's new Public Communications Ninja, to become Chief Moderator of this forum for now.


#12

Sadly, that is difficult to prevent when one individual doesn't respect the other.

I'd like to see us have an open exchange of ideas and facts. I wish we could all leave the underhanded ad hominem aside. My experience is that won't be possible. But good luck to Maureen. If she begins taking sides or censoring, I will leave because I'd rather defend myself somewhere rancourous than have my effort deleted.

I do empathize. My solution is probably to go focus on my own work. I have tried to do a brain dump of all my effort on anonymity, because I think zk-snarks are important. All the best in your endeavor.


#13

I think the plan is excellent, and I am impressed. I would add that I do have quite a bit of experience with this, only with some small marketcap cryptos like Horizon and Expanse, but I think this plan is ideal in this specific situation. High demand and loyalty are likely due to the faith in the tech and the team. This creates long term incentive for the team, and a very good chance to grow the community and user base in a fair way over time.

These days I expect ICOs combined with premines, and then devs claiming they have spent everything and ran out of funding within a year or less. I am pleasantly surprised to see something different here, and hopefully this is how it launches, or close to it. Best of luck to the team!


#14

Just to be clear, my view is that whenever one creates a medium of exchange the most ethical and pragmatic way to distribute the currency is to simply sell it. The way currency is sold is through an exchange.
The goal of this should be to completely sell off the currency into the open market. How it should be initially priced is probably best left to experts in finance. If it's priced too low then you would sell out and be left with a potentially annoying situation where very few people hold tremendous amounts of the currency, on the other hand if it's priced too high then potentially a great deal of the currency would sit idly in the hands of z.cash, which wouldn't be a great situation either. Adjustments can be made, depending on how it goes.
Those problems aren't nearly as frustrating as the issues revolving around inevitable pyramid schemes (early adoption), and funding mining (post inflation), that arise from distribution through mining, in my opinion. Plus there's the nice side effect of having a way to pay for development.

Um. I guess I should say with "pyramid scheme", I'm not trying to insinuate malice, just pointing out that any method that distributes coins over time through inflation, especially in decreasing increments, financially rewards those that got in on it early at the expense of late adopters. Good bad or indifferent, that's the nature of the beast.

Lastly, I apologize for any offense.


#15

Thank you. :sunglasses:

Some level-headed points-of-view that make me think about what I wrote in a different light. Nothing to add yet. :pensive:


#16

yeah 10% great, how much gets the millionairs club aka the investors in total and also each??? A total of the funders is enough for me. We need more info!!!


#17

Thanks, buddy. We've done our best to set up an incentive-aligned and transparent financial structure, and now we need to focus on building the working code. Help wanted! Everyone reading this, you're invited to start here: https://github.com/Electric-Coin-Company/zcash/wiki/Public-Alpha-Guide and post bug reports and patches!


#18

can i invest some now?


#19

hello just I acquired z-cash where I can make cash?