Settling for $1 million at this point seems "unimaginative"

Am I reading the blog correctly? Investors got in at $0.50 per coin? I am surprised the project settled for only $1 million.

How can I trade half my BTC for Zcash? I know there is probably not an answer yet.

Ethereum is too complex to be a simple asset that the wealthy will rely on.

What is the market value of all anonymous banking accounts in the world?

In preference to gold and complex BRIC-like arrangements, international banks will need a cryptocoin to make massive transfers as the dollar/Euro/RMB system continues its fall.

In a world of Zcash, governments are going to have to work hard (threaten) to persuade tax payers to keep using BTC.

So the past’s biggest blockers of BTC will be its biggest drivers of its price.

10% of M2 (plus) is a reasonable eventual market cap for BTC ($2 trillion or $100,000 per coin). 10% of current anonymous currency assets and trustless international bank-to-bank transfers that Zcash could capture is more. 10% is not an upper limit. A conservative investment would assume BTC plus Zcash market capitalization should be double Apple’s current market cap in 15 years, about $25,000 per coin for the combined investment. Double the largest stock might seem dreamy, but this is not a stock. So conservatively, the $1 million is a looking at a 50,000x return on the 10%.

In the current environment of excess capital, “rise of the machines”, FinTech, dollar/Euro/RMB problems, and crypto hype, 100x investment seekers could have devoted $500 million to this project.

These coders are using technology that is many steps above Google, Youtube, FB, and Snapchat billionaires who all began as a couple of guys with a simple idea (FB was a virus based on “will you be my friend?” requests between acquaintances). The idea here is a lot bigger than searches, videos, friends, and texting. This is much bigger than stocks.

So what kind of math is being used to place its current valuation at $1 million? None? It’s just a kind of guess people are making? The current asking price should have been $1 billion. Matthew Green and company are not up to Youtube and Snapchat founders’ standards? Their goal is smaller? They’re putting in less work and experience? They’re going to be less lucky?

I think you are reading that wrong. The blog says investors got an unspecified stake in the Zcash company, not that they receive the founders reward. At least 10% of the reward is pledged to a Zcash foundation, and AFAIK, there are no details about how the remaining 90% will be distributed (to be held by the company, to employees and partners, dividends to investors).

Without knowing what percentage the investors’ stake in the company is and additional details, you can’t calculate even a hypothetical (assuming that value of the company is only the value of the ZECs themselves) valuation of each ZEC based on it.

Your idea of a ‘conservative’ assumption on value also seems anything but. Zcash still has a lot hurdles to overcome to become an staple. Competitors may outwit them. Their own technology could unravel. Regulatory environments could derail their users. They might fail to acquire a resilient mining class. Banks might prefer to control their own cryptocurrency. Zcash is more ambitious than cat videos, but it also has hurdles more numerous and complex to clear.

I’m eager to get some myself, and I admit to being a novice in cryptocurrency, but my own expectation was that Zcash, for all its promise, could easily be worth nothing or fairly close to it, years from now. It’s hardly a riskless endeavour. The past is littered with video and communication platforms that didn’t make it, so in advance, it would be very bad math to assume every investment you chose would be the next youtube rather than the next thing that gets bulldozed by the next youtube. Surely part of the calculation that went into the investors’ valuation, whatever that was, was that Zcash would be less lucky than runaway hits.

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To quote the blog:

"Zcash’s monetary base will be the same as Bitcoin’s — 21 million Zcash currency units (ZEC, or ⓩ) will be mined over time. 10% of that reward will be distributed to the stakeholders in the Zcash Company — founders, investors, employees, and advisors. We call this the “Founders Reward”
“The end result (as shown in the diagram) is that there will ultimately be 21 million ⓩ, and 10% of it, or 2.1 million ⓩ, will have been initially distributed to the founders.”

The banks in a system-wide breakdown such as a repeat of 2008 can’t depend on anything they invent themselves because it is by definition when trust is broken and all fictitious debts like treasuries and mortgaged-backed securities are worthless (the Fed’s “assets” bought from banks with QE). Instead of depending treasuries that might be about to collapse, they could get rid of excess dollars by buying Zcash. They are not legally allowed to spend their dollars on most U.S. assets other than treasuries (which is why they are forced to buy treasuries). But if the U.S. can’t trace the money
 So in a competitive international banking world, an asset the banks can’t control is exactly what the biggest banks need in the biggest quantities. They currently have gold, but even when resorting to that they still usually have to move “pieces of paper” around (or middle-man bits) that represent the gold instead of the gold itself.

International banks and countries are playing poker with each other. Not letting other players know the size of your stash is important so they can’t plan on how to drive you out of the game. It’s also a basic principle of war in terms of troop capacity. China is hiding the size of its gold hoard for this reason. They are going to look at Zcash and go “gee, you mean we can
” This is actually the biggest theoretical problem with Zcash [ other than the devastating effects that constant-quantity currencies have had on populations in the past, to the advantage of banks. See the “Wizard of Oz” alleged allegory about how disastrous a gold standard was in the late 1800’s, giving banks an advantage over farmers, industry, and labor (scarecrow, tin man, lion) because they were following the constant-quantity gold-brick road instead of simply tapping into the larger quantity of silver (Dorothy’s shoes were silver in the book). ]

If a constant quantity is accepted as a standard, then those charging interest and not spending the gains acquire a higher and higher percentage of the total, getting not only the interest but the gains from the dwindling supply. See Michael Hudson’s writing on biblical tradition of debt defaults and why ~2% inflation is needed to keep rich asset holders on their toes, investing instead of holding and increasing their control by leveraging past control.

The normal historical default in times of financial crisis, war, or post-war debt is gold. That’s why after 2008 banking regulations worldwide demanded more gold on balance sheets. But it’s an ugly and cumbersome option. As more banks jump on the wagon for a constant-quantity cryptocurrency, the first banks to do so will be big winners and the last players will break even on a real and verifiable asset transfer that doesn’t depend on treasuries keeping their value, gold that isn’t there, or derivatives of nothingness. The banks could agree among themselves to do it first for a particular cryptocurrency before the general population is even using it for the marketplace, and then they’ll “help” (via the government) the public to follow suit in the market place, driving up their asset value.

By “conservative” future value I meant “if the project fulfills its goal”. By suggesting they should have demanded investors gain “only” 100x I am giving the project only a 1% chance of success to reach my “conservative” value. It appears developers and investors are demanding a 50,000x return (5,000,000% gain) on value if they succeed.

This is typical in today’s world where computers and a few programmers can do the work of millions of brains. Very little capital is needed to make very large gains. All the big buyouts the past 15 years have been about mind-space acquisition (patents, eyeballs) and manipulation (monopoly position, lobbies), not monetary capital needed to build physical capital to help society as a whole as classic economists had hoped for. Amazon is an exception, and Google actually needed some of its profits for expansion.

By not demanding a more reasonable amount of capital from investors the project is putting itself at higher risk of failure because it is open source. If they do not use massive capital to establish market share before a competitor does, a competitor might use $100 million to copy everything they are doing in addition to buying marketing, merchants, and miners.

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