Yeah!
No. Anyone can make a billion addresses. Plus there’s no way to see shielded addresses. So this is not useful.
This number cannot be known, and if it were it’s meaningless. I can write a script to generate a million of these in a couple of hours.
This number cannot be known. Furthermore if it could, I claim it’s irrelevant. (Explained below.)
No. It’s easy for me to create a script that generates bazillions of transactions per day because they’re super cheap so far on Zcash.
Now transaction fees paid is a much better metric in this category. If there were one transaction per day but someone paid a million dollar fee, that’s saying something important about adoption. If there are a million transactions paying a total of a million dollars per day, that says something better about adoption. If there are 10 trillion transactions paying $100 / day, we can’t infer very much. Could be a botnet or a bunch of users.
If you mean fully shielded transactions, then again, I would focus on fees. A fully shielded z2z txn that follows the standard fee (which is important for privacy) costs 0.0001 ZEC. So for 1 ZEC per day anyone could send 10k.
Now if we see a million dollars per day of fully shielded transactions, now that’s something!
Note that fee mechanics in Zcash are somewhat wonky, and that there’s a lot of unused blockspace. So for fees to start to even mean something we’d have to see many more transactions. Those could either be “natural” growth or “spoofed”. Either way until blocks start becoming full, this measurement won’t mean much.
Also, I’m interested in protocol changes like Ethereum’s EIP-1559 (because I think they may improve the Means-of-Exchange use cases) which would alter this metric substantially.
Notice also, that “adoption of hodling” might be an important goal that won’t be directly visible by looking at transaction volumes.
No. I think this ratio is almost irrelevant (explained below).
If there were any privacy-preserving, non-gameable way to measure this, I think it would be a very useful metric.
The problem with this kind of metric is that it’s inherently at odds with privacy or else it’s gameable. Still, I think there could be useful proxy metrics.
For example, the total amount of bandwidth a lightwalletd instance serves to shielded mobile clients for syncing is a proxy measure. It is gameable because I could cook up a script to continually sync data then throw it away. But there’s some cost to that, so I can’t simulate a million users without substantial cost.
So maybe this is a good metric to watch. Now I don’t think we can easily guess “monthly active users” directly from “total bandwidth in the past 30 days”, but we can and should watch if the latter metric is growing. If it’s growing exponentially, for me this argues for natural adoption more than spoofing, because for spoofing that means exponentially growing costs.
Here are some you didn’t mention that I think are important to consider:
- The total ZEC in the shielded pools. A larger number here could imply multiple things all of which seem positive:
- Maybe a few large whales decided that it’s valuable to increase their shielded holdings.
- Maybe a few large whales decided the risks of shielded storage were decreasing, so it makes more sense to scale up their shielded holdings.
- Maybe more small users want to either store or transact ZEC in the shielded pool.
- Maybe some users want to store ZEC and/or transact in the shielded pool, but it’s been too difficult, and those barriers are being overcome to tap into this “latent demand”.
- Maybe users strongly value privacy, and they see growth here and associate that with more privacy.
- Maybe more users want to use shielded memos, and those are only available by interacting with the shielded pool.
- USD-equivalent value of the shielded pool - If this goes up/down, it could either be because of ZEC price increase/decrease or ZEC moving into/out-of the pool.
- If it grows, it represents some market confidence in dollar terms about the value of the shielded pool/tech even if new ZEC isn’t entering the pool because the price is going up, or even if the price isn’t going up but more ZEC is entering the pool.
- USD-equivalent per day earned by miners.
- There’s much explored about this from across the PoW space, especially of course around Bitcoin.
- If this is increasing, we should expect more miners and/or mining.
- More mining either means more long ZEC positions or more dollars worth of ZEC getting sold from miners and distributed to buyers.
- More mining means more competition in the mining market which can be good for decentralization.
- Miners receive revenue directly from Zcash. Zcash is dominant for its mining hardware niche. This means unlike multicurrency products/services (exchanges/wallets/etc…) miners are more likely to pay higher costs for shielded adoption for the same amount of benefits versus exchanges or wallets. For this reason, I am very curious if miners can be one source of shielded adoption. With Heartwood we’ll get to see if the shielded coinbase is of interest to mining pools and miners.
- Shielded Coinbase adoption - As just described, if we see growing adoption of shielded coinbase, this would be a signal that miners value the benefits and are able to adopt the upgrade.
Why do I think shielded / transparent ratios are a red herring?
Fully shielded z2z transaction privacy doesn’t depend at all on the ratio of transparent to shielded funds or transactions. Shielded network effect in terms of goods or services don’t depend on the ratio either, since that just depends on if the service provides a shielded address or not (regardless of if it provides a t-address).
A naive measurement of the privacy set is just every shielded output, which grows with every shielded transaction of any type: z2z, z2t, t2z.
Privacy researchers have shown us a bunch of ways that interacting with t-addrs reduces privacy. This shows us we can identify many of these outputs because users treat the shielded pool like either a mixer or as just a mandatory transitory stage where they don’t even care much about privacy (for example for miners who just want to deposit directly to an exchange to sell).
None of those research results impact fully shielded transactions. If we subtract all of the outputs identified by those “mixer analysis techniques”, we would see the anonymity set grow proportional to at least the number of fully shielded z2z outputs. (Some z2t and t2z transactions also have stronger privacy, but we can ignore them for simplicity.)
So, every time there’s a fully shielded transaction, the anonymity set grows and privacy is strengthened for all future users. It doesn’t matter if there are 0 transparent (or t2z or z2t) transactions or a billion of them. That has no impact on chain privacy properties of the shielded pool.
By the same reasoning, it doesn’t help privacy at all to turn off transparent transactions with the unrealistic assumption that wouldn’t affect shielded usage rates. Of course in reality that could either stimulate more or less shielded transactions (as I posted about elsewhere in thread).
So if we care about growing the privacy protections and all the other beneficial network effects of fully shielded Zcash, we should be laser focused on growing fully shielded z2z transactions and fully shielded ZEC.