Zcash’s biggest current expense by far is securing the network. Should we invest more time and resources into checking if we are getting “ripped off” by miners?
Bitcoin for example effectively secures their network with 6.25BTC of block rewards per 10minutes. Zcash spends 20ZEC of the block rewards per 10minutes on securing the network. Can someone explain to me how thats not considered a rip-off and why everyone isn’t outraged at this unnecessary spend?
I’m not suggesting we have to indefinitely match the Bitcoin mining reward I’m simply pondering how we can justify spending 10ZEC per 10minutes after the next halving (in November 2024) when so many others will be spending much less. This includes Bitcoin which will be spending 3.125BTC of block rewards on securing the network per 10minutes.
Viewed another way, BTC is spending $187,500 every 10 minutes to secure the network while ZEC is spending $620.
Once the initial distribution of coins is complete I question if BTC will be able to maintain network security solely through a fee market. Zcash is in a similar conundrum while taking a less aggressive approach to creating a fee market.
I suspect this, in part, has contributed the discussion to move from PoW to Proof-of-Stake. With PoW seemingly being unsustainable without a high tx fee market (as initial coin distribution winds down) or a tail-emission.
I’m not yet convinced about a move to PoS as it would seem to benefit the largest, deepest-pocketed holders.
I too agree with this sentiment. I’m simply uncertain.
I’d be grateful if someone much more knowledgeable than I to explain why Zcash should, or should not, consider an alternative to PoS like PoST (Proof of Space and Time). It’s my understanding that PoST offers similar energy savings but with significantly more security (higher Nakamoto Coefficient) and significantly more decentralization (more nodes) than PoS.
To maintain security against 51% attacks, there are a few things to consider:
Zcash basically has to monopolize the hashrate for our specific proof of work algorithm. If Zcash only has a tiny fraction of the total hashrate that’s out there for that algorithm, it becomes more feasible for miners of other coins to temporarily switch over to 51%-attacking Zcash. This is what allowed Ethereum Classic to be 51% attacked, because it used the same PoW algorithm as ETH, and ETC only had a small share of the total hashrate for that algorithm.
In a world where miners are purely short-term profit-maximizing and hashrate is rentable, the cost to 51% attack the network is only marginally greater than what the network is paying. Let’s say renting hashrate costs twice as much. Then at 2.5 ZEC per block, the cost to reorg 50 blocks and steal $1,000,000 from an exchange would be 250 ZEC, or ~$8,000 at the current price. Miners who are “long ZEC” are disincentivized from renting their hashrate this way, because an attack would drop the value of their ZEC. So, the long-term support of miners is necessary for security. In practice, not that much hash rate is rentable on open markets: https://www.crypto51.app/
Pool centralization. Currently one pool has more than 50% of Zcash’s hashrate, so they could 51% attack Zcash if they wanted to. They are incentivized not to, in order to not kill the reputation of their brand, but there are more subtle attacks they can use to increase profits without carrying out a full 51% attack (like “selfish mining”).
So, for security, Zcash needs to (a) be the most profitable coin to mine for its particular PoW algorithm and (b) needs to maintain the moral support of its miners, especially the pool with >50% hashrate. Therefore, we shouldn’t assume it’s safe to decrease the mining reward without at least running through some models on how it will affect the profitability of mining Zcash vs. other coins.
PoS is a must for a multi asset blockchain. And we all agree that to increase the use of the network, and one day live off of fees, we need new use cases for Zcash, so new assets.
I agree we cant assume it’s safe. But in any other industry/company if you were spending 80% of all your revenue on 1 item it’d probably be something you’d spend a lot of time/money/effort trying to atleast investigate if it’s possible to reduce those costs.
Currently it appears Zcash is spending little to no effort to try and reduce those costs .
I agree we cant assume it’s safe. But in any other industry/company if you were spending 80% of all your revenue on 1 item it’d probably be something you’d spend a lot of time/money/effort trying to atleast investigate if it’s possible to reduce those costs.
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