It is also risk—a risk being imposed on people who didn’t have it before, who didn’t buy into it.
Myself, I am not generally a fan of the American SEC. Moreover, I believe in open-source software freedom. I have not been preaching the virtues of POW to forums for coins that were founded as POS.
If they eventually get into trouble with the SEC, or regulatory problems crash their market values, I will simply watch and munch popcorn file that under “not my problem” unless I choose to buy into it, knowing full well that this could be a very big problem. I do hold some POS coins, which I chose to buy with full knowledge that they are POS coins. I am working on a long-term plan to exit from POS, for this reason among others.
Do I expect for ZEC to stay the same ZEC in its monetary and economic characteristics, just as BTC stays BTC even as the technological implementation advances? Of course, I do! I strongly distrust altcoins that arbitrarily change their monetary characteristics, and I make snide remarks about them to other Bitcoiners. Whereas I always considered ZEC one of the most credible altcoins, and defended its reputation from smear-attacks by Monero users!
As I said in OP, I choose my battles. For instance, I would fight to the death to keep Bitcoin permissionless and decentralized. I am now expending effort to fight to keep Zcash POW, when I frankly do not enjoy this discussion—not at all. It’s not fun, and I have other things to do!
Why would I fight for something that I don’t want?
I love Zcash, but I wouldn’t be in it if it wasn’t going to PoS.
Crypto is not something I have to use in my life, if it was all as stupidly wasteful as BTC I’d walk away from it all. BTC is outdated trash and the maxis are a cult. I chose Zec because the devs are great and the project is continuing to improve. Now, let’s focus on some major adoption.
They went after XRP which is decidedly not POS. I don’t necessarily think staying away from POS is going to protect ZEC from the SEC in the long run. Especially when ZEC has had a portion of transactions being kicked back to ECC for development of the blockchain. Given the SEC’s floundering, it will no doubt going to try to say this fits the common enterprise prong (if there’s somebody to litigate and the tech is a threat they’re probably going to do it).
Though you may have a point, because they left ETH alone (which actually had a formal ICO) while it was proof of work and have subsequently stated it might now be a security since switching to proof of stake.
ECC is a non-profit so I am uncertain how the SEC would justify calling mined ZEC for development purposes a security.
I’m neither an attorney nor expert on the Howey Test but I believe ECC has already thought this through, at least from the perspective of the development fund and ECC’s non-profit status.
To me it seems the only way ECC could avoid being regulated against as having “Sold unregistered securities” is if they immediately halt all ZEC sales into fiat. Its quite obvious that the SEC is using the Howey Test major terms
see below
An investment of money
In a common enterprise
With the expectation of profit
To be derived from the efforts of others
People on the receiving side of the ECC’s ZEC are providing point #1, the ECC’s protocol and other work for Zcash establish common enterprise. Expectation of Profit is an obvious assumption… otherwise the ZEC buyer would have simply gifted fiat directly to ECC. Point #4 to be derived from the efforts of others - this applies to ECC staff work, and also Zcash Foundation and ZCG work.
I don’t mean to sound like the boy crying wolf, but to the current environment in crypto and how the SEC is using its charter to regulate against unregistered securities distribution, the ECC, ZF, and ZCG would be easy targets. Particularly when you consider the fact that they are registered American business entities (non-profits, by their technical structure and objectives)
It’s more the possibility of them arguing the blockchain itself is the common enterprise (which they basically did in the SEC v. Ripple case by arguing all secondary market sales of XRP were also securities offerings) with directed development by the foundation. Muddying the waters with accusations of the ZEC ledger being insufficiently decentralized - which is something I’ve heard monero FUDsters say before - would probably be in their playbook for going after developers or the development foundation. There was also a senator during a capitol hill hearing that basically stated all blockchains and their associated foundations are all peddling unregistered securities even if they’re “non-profits.”
The SEC has given proof-of-work chains a peculiar exemption (particularly with BTC and ETH), but whether they extend this to other proof-of-work ledgers remains to be seen. It seems likely to me that they’d use the securities argument to attack a privacy blockchain (even if it was POW) if it ever became annoying enough to vex regulators and I’ve always said the easiest way to attack a blockchain is to go after developers and foundations using nebulous “up to interpretation” laws and regulatory frameworks.
The SEC’s line of thinking with POW vs POS seems to be their opinion that POS chains are more “centralized” and therefore any tokenization bears more of a resemblance to a formal security. Afaik there’s no formal centralization clause in American securities laws so the only thing not switching to a POS chain gives you is an informal guarantee by the SEC that they won’t go after POW chains because they’re more decentralized. If you trust an informal guarantee by the SEC at this point, i’d refer you again to the XRP litigation, because the whole we don’t think you’re a security statement by previous SEC officials didn’t work out for them very well.
These are great points. There are no cry babies here just Zcash focused supporters trying to make head’s or tails of this issue. Thank you to you both. I guess I hold the entire community, including ECC/Major Grants/ZF in such high regard that I believe all contributors have done all they can to ensure the safety, solvency and success of Zcash
