Gold was discovered 5000 years ago, a testament to its growth. A narrative passed from one generation to another. Gold’s interoperability is everywhere from jewelry to electronic devices. By focusing on gold’s specific use case on other networks (jewelry, electronics, currency, savings accounts) it created demand. Creating demand for price appreciation is essential for ZEC which directly affects the treasury for ZOMG, ECC, and current ZEC holders. This further creates other second - order consequences.
Now, 5000 years ago alongside gold, lead was also used as a currency. The stakeholders of gold back then might have thought gold - plated lead might increase gold’s adoption. But, fast forward to now it was really the intrinsic value of gold that kept its reign alive. A shielded asset reminds me of a gold plated trophy. It’s nice to have, but not the reason what creates the powerful gold narrative for generations. Today, having a shielded Venezeuelan bolívar is a band-aid and simply exacerbating the problem.
The single Chernobyl incident might have been the catalyst for the Soviet Union’s Collapse. Over time institutions fall, oligarchies lose power, large corporations no longer dominate. They have to work extra hard to keep the status quo in check. A single domino can lead to its demise.
Gold and religions are examples today where breaking the status quo can be extremely difficult. Gold is a hedge against human greed. Religion is an answer to the looming uncertainty.
The goal should be to make the ZEC token as pervasive as possible and into the hands of as many people. And, double down on its intrinsic value. When enough people have skin in the game, then the status quo becomes difficult to break.
How many gold - plated trophies do we foresee to exist 5000 years later?
The difference of opinions within a community can sometimes be more than the ideologies of competing groups and communities. Why limit Zcash to the narrative of the dominating 1MB coin? Vitalik said “communities formed around a rebellion, even if they have a good cause, often have a hard time long term, because they value bravery over competence and are united around resistance rather than a coherent way forward”[1]. Now Zcash is not formed as a rebellion, instead it added privacy to decentralized value transfer. There is a third category which is still an open playing field - which community can stay decentralized and yet deliver to the needs of humans - to collaborate, exchange ideas and values via trade, commerce and forming totally new types of societies.
If we can deliver shielded money and shielded digital assets/smart contracts as well, all whilst keeping the 21M cap, we would have helped advance humanity to transact securely and privately. Simply providing this feature set would enable a wide array of communities across the world to achieve their goals and aspirations.
“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” - Henry Hazlitt
What are the second or even third order consequences of ZSA ? What is the impact on ZEC? Then, how does that impact on ZEC affect the entire Zcash community? I wish we asked these questions during the approval process.
Being that this was the largest grant approved in the history of ZOMG, it would have been great to offer more outlets of receiving feedback from the community. Maybe a Google Hangouts or a Twitch Stream where both sides are invited to speak their view points. I would rather have grants take longer to approve than having the wrong grant approved.
Storytellers serve the most important role in a community. I believe we need to focus on the ZEC storytellers before serving other communities. Today, these storytellers are ZEC holders. Without these storytellers there is no ZEC. There is no ZSA.
I hope to see this project become ultra - successful and my doubts proven wrong.
I think the discussion has been going on for quite a while that anybody who wanted to add their perspective would have ample time to do so. This forum is a canonical space for Zcash discussion. I doubt having more outlets would result in a better, if not more coherent, discussion.
Also, I cannot foresee a future where ZEC exist in a chain that only support one token, ZEC. You could say we can bridge ZEC to other chains but what would be the use for that? The first reason I got into ZEC is because of our, the Zcash community, commitment to privacy.
The only sure way to know the answer to this question is to actually build ZSA. Don’t you agree? On the other hand, what are the second or even third order consequences of not adding ZSA?
Emulating the ETH modal is something that’s a little more than almost assumed around here with the idea being that we’ll observe how it goes for the ETH community first so if you want to know what’s coming you need only look at them.
I just want to chime in here and say that BCH has had something maybe akin to Zcash shielded assets called Simple Ledger Protocol (SLP) tokens. BCH has a UTXO model like Zcash and seeks to act as a currency (as distinct from ETH which uses an account model and is a smart contract platform rather than a currency per se).
The SLP ecosystem is widely used and I don’t think anyone in the BCH community feels that SLP tokens are debasing the value of BCH. On the contrary, SLP tokens have led to more people using BCH.
I’m really excited broadly about ZSAs - I think they bring a lot of good attention and expanded use cases for Zcash. I also get the feeling that a lot of people around these parts are, or at least claim to be, price agnostic, which I think is a mistake. The use case for ZEC as a private store of value/means of exchange relies on parties wanting to hold ZEC, as no one is going to feel comfortable about storing their savings or accepting payment in a depreciating asset, regardless of the other advantages it brings. So even if the objective is not to make money, but rather to promote privacy/freedom through the expansion and adoption of ZCASH, we should all share the view that significant price appreciation is a very good thing, and almost without a doubt necessary to the mission.
Now back to ZSAs - a few possibilities. First, which I think some are worried about, is that without proper incentives in place, ZSAs rule the roost (ie demand for a hypothetical zUSD is much much higher than ZEC itself) and demand for ZEC itself drops out. Market participants use shielded tokens which they utilize briefly, convert back into fiat, or potentially BTC. Or potentially keep their savings in some kind of shielded ZSA pool. Either way they have no need for ZEC itself and privacy preserving features are available without having to make any real investment in ZEC. This is bad - bad for holders who will be penalized for making having made an investment in a promising technology. I also think it would be bad in that at least in my view, the purpose of Zcash is not just privacy but also a meaningful degree of freedom/independence from the vicissitudes of Central Banks and other institutions that do not share our broader commitments and objectives.
Maybe this doesn’t happen at all - other blockchains have apparently implemented UDAs without obvious ill effects on the native token/coin. Why this would be does not make obvious/intuitive sense to me.
Alternatively, if ZSAs can be built out in such a way that it ensures ongoing demand for ZEC itself in spite of particular demand for one or multiple ZSAs (there are a number of possible mechanisms either individually or in tandem such as transaction fees, or even better, requiring some fractional reserve of ZEC in a wallet in order to utilize ZSAs. Probably loads of other ideas that I can’t even imagine) we won’t have to worry about that, and ZSAs will add utility to the blockchain and certain not lead to price depreciation.
In any event, I’m glad we’re having this conversation and that the community continues to think through this issue and brainstorm ways of ensuring that ZSAs do not reduce demand for ZEC. I think ZSAs are fantastic but there’s a lot of good reason to be cautious and not fail to imagine/prepare for the ways things could go haywire.
Every dollar spent from the ZOMG fund, ECC fund, or the ZF fund needs to spent for one reason which is giving value back to current and new ZEC holders.
Imagine if Apple decided to keep licensing their OS to keep Apple alive in the 90s? How would Apple look today?
Licensing the Zcash “OS” is not the long term answer for successful adoption. In an already hyper competitive market we would be diluting the Zcash narrative.
Maybe its too late, but I would love for the community to reevaluate this grant from the bottom up.
It’s not too late. If you have anything of value to add to the discussion you’re free to do so. It’s unkind to detract the honest efforts made by other people to advance Zcash mission just because you have a different opinion.
ZSA means more useful Zcash. A more useful Zcash is better for ZEC.
With or without ZSA, we’ll have to deal with some kind of problems in the future anyway. Things like PoS transition could be controversial. Another governance trouble might surface when we have to decide on important stuffs.
Let’s not compare Apple with Oranges. Zcash is no Apple.
What is the Zcash narrative according to you? To me, it’s about empowerment. ZSA will empower different kind of communities by allowing them to use Zcash network, the best internet money infrastructure. Hence, ZSA will not dilute Zcash narrative but rather it’ll let the narrative blossoms.
By the way, after I tweeted that I got a couple of pieces of feedback (in public, on twitter), that the word “shitcoin” was negative and sort of detracted from good thinking/conversation. I agreed with that. Fortunately, just now noted Zcash supporter Tyler Winklevoss just came up with a much better term:
Personally I feel like the term “fiat”, or “Fiat Pegged Currency” conveys all we need to know. Fiat = “by decree”, which is to say that the value of the currency only exists to the extent that a centralized authority, backed by active or implicit, insists that it does. And that centralized authority has to power to debase it at will.
The word “fiat” carries with it intrinsically a sense of arbitrariness and authoritarianism.
I believe there are 2 ways we can move forward from here:
We can continue to debate the ZSA’s usefulness to Zcash ecosystem
a) explicitly craft second / third order consequences with and without ZSA
OR
Focus on the ZSA fee design mechanism
a) Engage outside researchers for example Professor Tim Roughgarden who already does analysis for other blockchain fee designs (does anyone here know him that would be willing to reach out?)
Wouldn’t the fee be the same as for a normal shielded transaction? Maybe I’m missing something. Isn’t part of the point of ZSA that an observer could not identify if a given shielded transaction dealt with a ZSA or not? A separate fee policy would negatively impact fungibility and transaction uniformity.
Personally, I think the ship has sailed on if Zcash will get ZSAs with such strong endorsements from ECC and funding from ZOMG to make it happen.
This is a good approach. I know ECC had some economic professors at George Mason University looking into it, not sure if thier findings have been published yet. Perhaps @joshs would know.