My concern about the anonymity of Zcash


#1

My biggest concern about the anonymity of the project, is the Founders Reward. To my understanding Zcash will be completely anonymous unless you have the key.

Well with rewarding the Founders 20%, of the blocks until the first halving consist of giving them a reward instead of a fiat? Would this not consist of having regulations since it will fall under a money service business?

I am New to the cryptocurrency, so, please forgive me if I am misunderstanding. I am just raising my concerns before getting too involved.


#2

All mined coins are by default transparent. You need to convert the transparent coins into secure (private) coins for anonymity.


#3

Yes, by default zcash is as anonymous as bitcoin. Also the trusted setup and lack of code/crypto review can question the privacy. Time will tell...


#4

I thought you had to convert any coinbase transactions to a private address before they could be used?


#5

I'm not sure about that.

I think you can send T to T and Z to Z I have only tested converting and sending Z.


#6

From my understanding zcash is not anonymous by default. Only transactions between transparents coins are. Rest is like BTC.


#7

As a person who has spent the last few years working in MSB related to crypto and provided consulting to the IRS, I think I can clarify a couple of things about MSBs.

The only two possible MSB activities Zcash Co. could be construed as participating in are money transfers/transmission and, from a total whack perspective, foreign currency exchange. I'll tell you right now that Zcash Co. isn't either of these just because they are taking a cut of their assets in crypto. It is basically the same as saying that somebody gets their paycheck in bitcoin, an MSB isn't required for this.

For two years, there has been a common misconception that processors are required to register with FINCEN. Not true. Exchanges and bitcoin ATMs, those dealing with many other financial institutions and exchange of fiat for crypto are most at risk, such as exchanges and bitcoin ATMs to name a couple.


#8

I asked on Slack and it looks like you do have to send to a protected address. From radix42 on Slack

work is in progress I think to make more informative error messages when you try to them to a taddr


#9

So the anonymity really isn't in favor of the miners? If that's the case, I can see that it would be worrisome to any miners to hop on board to this. To me, the anonymity of mining would be the biggest thing for a cryptocurrency.


#10

What's the issue? Just mine each new block reward to a new address and forward it to another address to make it private


#11

Each block you mine goes to a different address so it's a non issue (unless you want to mine to a single address)


#12

I am very interested in the idea of this project. As much as I would like to be part of the first group of miners, my concerns raise more flags than my excitement. I guess it's a good thing to not let my emotions get in the way of this lol. I will let the slow start finish and see where it goes from there before hopping on board.


#13

Best thing to do is play with the technology on the testnet.


#14

First off abromide, thank you for the info. I understand a bit more on it now.

I guess I misunderstood the concept of anonymity. I thought it would benefit the miners more than future holders of the coin after being mined.


#15

https://github.com/zcash/zcash/wiki/Mining-Guide


#16

Yeah I will have to do that. Was trying to get the zcashd to compile last night and it was running way too long and needed to grt ready for work. So I'll give it another go this evening.


#17

Ah thanks Tim! I'll check out the guide to make sure I am doing it correctly.