Here are the goals the Electric Coin Company has for the next few versions of our zcashd software leading up to the “Blossom” network upgrade in October of this year:
Harmony Mining, including time-locking of mining rewards from mining alg-B, using the Equihash-150,5 variant that Beam made and is running in mainnet and has commissioned open source GPU implementations of. The purpose of this is to get mining power and to let coins be earned by multiple factions/types (ASIC miners and GPU miners), as well as to provide long-term incentive-alignment between miners (starting with the new alg-B miners) and users/holders.
Shorter Block Times; The purpose of this one is to increase the capacity of transactions per hour that the Zcash network can sustain (meaning that we can onboard more users and more usage without raising transaction fees), to increase the reliability of the time-to-finality — i.e. to make it so that an incoming transaction to you is almost always finalised within 40 minutes (or whatever the time-to-finality turns out to be) instead of usually finalised within 40 minutes, potentially to reduce to the time-to-finality, and potentially to increase the security against rollback attacks.
Split Founders Reward; The purpose of this is to make it so different recipients of the Founders Reward are not relying on the Electric Coin Company to handle their coins for them, and to provide more transparency to the public about the distribution of FR.
keep v4 transaction format working until NU3; The purpose of this one is to make sure Ledger and Trezor and other such devices continue working smoothly through the NU2 upgrade, and to make it easier for the maintainers of those products to provide high-quality Zcash support.
I know a lot of people (but not all people) on this forum have said they really hate the time-locking of alg-B mining rewards piece! I value your presence in the community (especially Peter from Flypool!) and I value your opinions, but after extensive consideration and consultation with a lot of parties, I’ve decided that it is better for the users and the entire network to go ahead with that piece. I also think that most people who’ve thought about this are misunderstanding it, because they think it means fewer Zcash coins for alg-B miners, but in fact I think it will turn out to mean more Zcash coins for alg-B miners (provided that they are above-average in terms of their loyalty to Zcash, and pretty much anybody who bothers to read this forum is above-average! The average miner probably doesn’t even know the first thing about what Zcash is or how it differs from any other coin, and the time-locking feature is ultimately going to make mining less profitable for such average miners and more profitable for the more Zcash-specific miners like you folks.)
You can see on The Network Upgrade Pipeline what the process is from here. We’re a few weeks behind schedule, but hopefully now that the “Feature Selection” phase is done we’ll be able to get the rest of it on track.
Note that this whole process (and probably another round of controversy!) is about to start again! Because it is time for us to start coming up with ideas for NU3! The only change the Electric Coin Company is making to the NU3 process versus the NU2 process is that we’re (a) writing up all of our own ECC-generated proposals as Draft ZIPs before NU3 Feature Selection, and (b) inviting others to submit their own Draft ZIPs that ECC will consider adopting during NU3 Feature Selection. See Daira and Cin’s ZIP-0 for instructions about how to do that. The deadline for Draft ZIPs for NU3 is the end of April. If your Draft ZIP misses that deadline, then it can instead go into the NU4 Feature Selection Process, whose deadline is the end of October.
@Zooko, you have still not come out with any proofs the time-locking will have the effects you are looking for. Why cant you release some information to ease our minds? I have asked and asked and asked for ANYTHING that shows this is a good idea, any proof / study / research / tests …ANYTHING and you have would be nice to see. Unless you have zero documentation showing this will do what you want…
Im sad to see Zcash keep repeating mistakes that are clear to most people on these forums.
But no, please keep listening to the “people I talked with and agree”…
The “majority” of people are not computer literate, they dont know about tech, they dont know what PoW is, they dont know the effects this dual PoW change will have on the network or miners, it does not effect them.
But I guess you should listen to them over everyone screaming at you on the forums how this is a bad idea, and ignore the only PROOFS I have seen so far showing this has security concerns.
Why is this being pushed forth? There is NOTHING backing DualPoW and Time-locking no research/studies/proofs/etc nothing to back up this idea and INFACT the only research I have seen put forth so far has shown it has a major security concern.
Zooko… All we keep asking for is some type of proof.
Or maybe WHY you think this way, and what has lead you to this conclusion?
Why do you feel so strongly that this is the right choice?
How many “experts” have you talked to about this?
What studies have shown you this is the correct choice.?
What sources do you have, that makes you think this will have the effects he is looking for?
Ultimately, I generally think it’s a bad idea to go forward with harmony mining and timelock. I can’t speak specifically about harmony mining, but it seems most research points to it being less secure. I know this decision apparently has been made, but I think it’s wrong to assume some magical solution can be created before the deadline. We’re betting on a losing horse.
Regarding timelock, it doesn’t take a Ph.D in economics and finance to understand the basics of time value of money and volatility. These basically mean that money in the future is less valuable than money today (10 ZEC over a year is less than 10 ZEC now), and that the general volatility of Zcash and other cryptocurrency assets suggest that miners should expect a higher return to receive money in the future than money right now.
Ultimately, any miner with any financial interest should only mine Zcash now when the incentives are greater. This ultimately should lead to less miners and less security. It seems like Zcash is hoping that miners become a wider part of the ecosystem and become proponents for Zcash’s success, but this comes at additional effort and cost. No matter how you cut it, a promise of a potentially good upside of high Zcash value when unlocked does not outweigh the potential for a downside. Even if a miner wants to hold Zcash, they would prefer the option to sell their Zcash instead of it being locked up. That option has financial value that is being taken away.
The only positive of timelocked Zcash I can think of is that it creates the opportunity for a forward market. Miners could sell the rights of 10 locked ZEC for 5 ZEC that can be spent today, or similar. If these markets emerge, then it could help predict the future price of Zcash. It could also help indicate the expected volatility of Zcash. If the variance is high, the more noticeable the disparity would be to miners, and it would signal them to not mine Zcash if they can only get a fraction of their earnings today.
The interests of users are not be served by double-spend attacks. It’s cheap to attack Zcash currently - https://www.crypto51.app. Daira has shown how dual PoW weakens security. ETC has been attacked this week so this is a genuine threat.
Time-locked coins change the legal character of the emitted coin from immediately-redeemable and fungible (once only z-addresses) money to an interest free debt instrument from miners to the network. I have explained how this is far more likely to cause ZEC be regulated as a security. Daira has explained time-locked coins will practically delay z-addresses everywhere, which is the actual mission for this project.
Your romantic notion of the “types” of miners you think this helps belies basic economic principles. Boxalex has explained how time-locked coins are actually centralising in that it significantly improves the relative cost base of a cheap-energy miner relative to expensive-energy miner.
Everyone in the forum understands the proposal. Stop looking for reasons to support your current thinking, your confirmation bias is startling. It is clear there’s a lot of hope to spread power to the Foundation and to empower a community. Ultimately though you have the power to direct the codebase. If you’re too obstinate to adapt your thinking in the face of new information it doesn’t look promising.
I want secure private fungible money. If I don’t get it here I’ll find it elsewhere. Half your luck if you think that makes me the “type” of miner you don’t want.
I think we’re almost definitely going to see secondary markets for timelocked $ZEC, but they may take a while to develop, or they may happen through opaque p2p transactions. I feel like it adds an unnecessary level of complexity
To be clear I am not necessarily supporting the development of these markets. I am merely stating that by time-locking coins, there will be strong pressure for a new derivatives market. The Zcash community should not necessarily be surprised if, for instance, mining pools (or another service) offers for users to claim their rewards now at half value, or something similar. This mostly resembles a forward market. This may cause confusion for new or unaware miners.
Great. I am zcash user & miner. Really hope that the web or mobile wallet to support shielded addresses. When that will come out? Could you please speed that up?
As things are decided i will just make a post for the records to see how much of my predictions and concerns come true than:
I allready saw harmony blossom as a death horse than back, now with the time locking my personal view on it is even worse, i predict it’s the most useless, not needed, total wrong approach ZEC could go, doomed to fail bevor it even started.
List of my concerns, points, predictions for the records. For each prediction becoming true i would like to get a golden star attached to my nickname
the GPU algo-B in general: I think it’s a bad idea because by than gpu pow mining will be mostly allready non profitable in most worldwide regions. Reason: ETH constantinople upgrade lowering ETH rewards from 3 to 2 will shift and drive out allready a lot of POW gpu miners ETH switching to POS maybe at the same time than the release of blossom harmony or maybe a bit later will cause the biggest POW gpu miner shifting we have seen. As all other gpu coins can’t take that hashrate anyway, the result will that only the gpu miners in the lowest electricity cost regions will be able to contineu POW mining.
POW mining in general: it will get more and more centralized to the regions with lowest electricity prices. Both algos, the current asic one and the new algo-B one will have huge mining concentration in china and some former soviet regions due the very low electricity prices there (2 - 5 cents/kw/h). If this is the intention, so it be, i see it has a very negative impact hurting fair distribution a lot.
algo-B mining pool issue: I have a feeling this will be one of the big problems the algo-B will face. Without knowing all details on how this will be managed i predict that a single pool will have more than 60% of the networks hashrate, mostly the pool with most financial background to handle the various time lock issues…
Parasite mining: I call this the mining where miners only come at lowest difficulty through auto-algo-profit mining pools. While the time locking is mostly designed to prevent this i think it will actually encourage these parasite auto miners. As the main intention of these miners is to mine at lowest difficulty they still will do so, mostly resulting in big hashrate spikes on the algo-B. These eventually are even more encouraged by services like nicehash which anyay pay them out in BTC and these services will take the risk but payout the miner immediatly. Prediction: It won’t fix the issue with these miners but resulting in even bigger hashrate spikes.
Inflation: While many wrongly think this will help ZEC inflation i predict the opposite. As i’am not aware that the algo-A block reward will be lowered the result from algo-B is just that we get more coins in the very same time, no matter they are time locked for given periods. The end result especially after 50 weeks is just even more ZEC in circulation, more ZEC than now released and issued and more inflation. The fact that they are time locked doesn’t change the fact that they allready excist. In case both algos are set to 1:1, the inflation will just double over 50 weeks or to keep it simple as the prediction: Inflation will be higher!
Price: Due the last point of more inflation the price will suffer. While the intention might be to keep the price more stable i absolutly fail to see how this can happen with even more coins issued and higher inflation. Time locking of algo-A asic mined coins may achieved this, but with an additionaly algo and addtional block rewards i absolutly fail to see how this can have a positive impact on price, actually i bet on a negative impact. Again, the time locking of coins doesn’t change the fact they are “present” and issued allready when mined. Time locking in my elementary calculations and logic would anyway only have a positive effect for at most 50 weeks, than things are back to normality. Prediction: BTC/ZEC price will dive further, the longer after blossom harmony release the more getting worst after 50-60 weeks after introduction of blossom harmony time locking!
Legal issues: While it has mentioned several times “no problem here” i doubt the full impact of time locking miner rewards from a legal law point of view has been proper researched so far. I missing law consultation here at max… In my opinion there is a big chance that time locking may change the whole status of ZEC from a pure payment coin into something else, be it a security or whatever. I just see this crying for unseen problems. Prediction: There will arise soon or late some legal problems eventually changing the whole issue at a later point and having lot of working hours wasted and/or putting ZEC forcing into a worse category of cryto assets.
Algo-B Network issues: In my opinion there is a real high chance this algo-B will be a security hole in ZEC POW mining due several reasons:
a.) Mostly it will be a very weak on relying on gpu’s. Wouldn’t ETH switch to POS i wouldn’t have that many concerns here, but after having them switching making millions of gpu’s unprofitable literally over night i see a huge danger here arising from bad actors.
b.) The attack cost per hour will be very low in my opinion on this algo-B. I predict an attack cost per hour below $5,000.
c.) I can’t see any logic behind helping algo-B increasing network security, actually i see, at least so far, only how it lowers the whole network security. Prediction: Exchanges may rise confirmations needed for ZEC.
d.) % of blocks obtained at a zero excess cost in difficulty will be on this algo at least 7.5% on this algo-B.
Time locking favouring big mining facilities: It will favour absolutly big mining facilities in low electricity cost regions. It’s not clear from the blossom statement if this is to be the intention by the meaning of “loyal miner” if this is wished, but the outcome will be just like this. The time locking favours big mining facilities extremely compared to other higher electricity costs. I made allready a simple calculation in another topic today showing that the 2 cent per kw/h mining facility will have covered their while year electricity costs allready very soon within the first months of time lock mining algo-B. Means there is no big burden to them compared to the worldwide average miner at average or high cost electricity costs investments. Running a 1,000 gpu mining facility in a 2cent region will cost just as much as ~$36,000 per year, means it’s a very low investment they face with time locking while having still way higher liquidity and are still able to dump their mined coins as electricity costs are realy fast recoved even under time locked. Additionally they get a free bonus of having by algo-B design mercenary, unloyal, part miners forced out leaving them the battlefield for FREE. Prediction: Algo-B hashrate will be “controlled” by low electricity miners even more than the current asic algo!
Unfairness btw Algo-A and Algo-B. Having the new algo-B time locked mining rewards while algo-A not is just unfair. This cries just again for community problems, fully understandable by the way. Prediction: While one of the intensions might have been to bring back the gpu community this will fail and bring a lot of trouble. It might be bring back some miners sure, but community is something different in my opinion. I might be wrong on this one eventually, we will see how it works out. At least it will cause a lot of trouble as long as the asic algo-A isn’t time locked
Loyal algo-B miner will profit more: This is an argument i personally absolutly disagree. There are so many flaws with this assumption that i struggle to mention them all why this is at least misleading and incorrect.
a.) Volatility: To make such assumption someone must speculate on a higher ZEC price at very least to compensate for inflation and volatility. This is highly speculative as we have seen in whole 2018. Actually i would say that due high volatility the algo-B time locked miner is exposed to a very higher risk getting a victim to volatility than a winner on it. The last 12 months have shown that ZEC/BTW went from ~0.05 to ~0.015 today, leave alone the USD value. Prediction: Time lock miners will suffer from volatility!
b.) Hodl compared to time locking: Every miner has the possibility to hodl even without time locking. But with time locking the holder has lost basic freedom over his assets for a long time. I consider 50 weeks in crypto as a long time. The better bet for sure would be instead of buying hardware just to buy ZEC and hold it with all the freedom to do whatever something considers at a given time. Prediction: Lot of unhappy algo-B miner posts/topics on the different social networks/forums.
c.) Increased inflation versus more profitability for time locked mining: Again, the increased inflation isn’t working for the time locked mined coins, it’s working against them, hence i predict again that in most cases the time locked reward will have less BTC value compared to the moment they are mined at.
d.) Limted 50 weeks effect with. After i’am pretty sure that after 50 weeks the daily supply is back to normality i could be that in exactly 50-55 weeks after blossom release and algo-B time locked mining starts i predict that this will be the worst period within the first 55 weeks for the BTC/ZEC pair as we are just back to full release of daily supply from 2 mining algos/
e.) there is a good chance that at some time miners due volatility or other needs sell their private keys for a given wallet at a cheaper price as they are exciting and/or a black market on hacked/compromised mining wallets at cheaper ZEC prices. Up to the whole setup time locking is introduced there is mostly even a big chance mining pools just vanish with the mining rewards. Highly speculative assumptioms of course, no doubt, but a good chance these take place…
f.) In case of a fork, which will mostly happen soon or late the time locked algo-B holders are in a disadvantage as well. They don’t have the full amount of coins they own in theory in their wallet. Again, prediction: Time locked holders will have way more disadvantages and not a single advantage!
g.) other issues why time locked profitability won’t be as good as immediatly released rewards for the miners like gains from trading, shorten, using, buying, whatever.
Founders Reward: With a new algo-B my assumption is there will be as well a new founder reward attached to it. As i’am not aware of any proposal/correction of the Founders Reward % on the algo-A equihash based on my assumption is that there will be more funds released, be it the foundation, investors and/or zcash company. I guess these are not time locked. In case i’am wrong with one of the these assumptions for the algo-B founders reward please correct me. In case my assumptions are correc than we have an increased Founders reward taking place. This might be for good or bad and i’am not commenting the impact for the foundation/investors/zcash here but just the impact. Prediction: This will increase directly as mostly not time locked ofZEC ciruculation or if time locked delay but later higher ZEC circulation. . Actually if my assumptions are right it’s a smart move to increase the Founders Reward automaticaly…
Transaction times: As it’s mentioned that transaction times still take up to 40 minutes i can’t see any improvement here. While most projects work on lower tham as much as possible we just keep some dissatisfied 40 minutes while on many other projects we see nearly immediate transacton finalization.
Prediction: Some direct privacy coin competitors will outperform us at least in transaction time, mostly in capacity of transactions as well within the next 2 years.
Equihash 150,5: By coincidence i’am trying to mine BEAM there with some gpu’s for some days now. Just out of curiousity to see all the features BEAM wallet has with cpu mining and so on. From what i see the AMD gpu’s get nearly no hashrate there for some reason (Didn’t read throug the whole topics yet). However, why was equihash 150,5 choosen and not ProgPOW which was favourized so far? Just of couriosity. Prediction: highly efficient FPGA’s will enter this algo soon.
Sidenote on Equihash 150,5, it seems the gpu must be at least a nvidia 1070 and AMD cards are not working any good on it, which again means everything on hand that the network will be a relativly week one.
Final conclusion: In my opinion it’s the worst most useless upgrade done by ZEC improving actually nothing. The better option would have been to work on a hybrid POW/POS, but that’s just my opinion of course. I’am pretty sure on blossom harmony nothing, actually absolutly nothing, will work out as desired. Prediction: Much resources and working hours wasted for no improvment having most of the team regret it
i could imagine that a 2 algo POW algo could split at some time ZEC. In another thread kek mentioned that it would be a scenario in which algo A for example agrees to continue with Funders Reward and algo-B doesn’t and both splitting. Interesting thought, so i thought it’s worth mentioning it here and the dev teams thoughts on such scenario at some point or day?!?
Correction about my last post and Inflation:
In another topic @garethtdavies posted this info as a reply due my concern that algo-B is creating additionally coins:
FR4: The immediate revenue for an active miner of Zcash at the block just prior to the activation height for Blossom should be almost identical starting with the activation height. (Subtlety: this includes GPU miners, even though their immediate revenue may be below their costs.)
FR5: This immediate revenue for alg-B specialized miners will be 0 at activation height.
FR6: Adjust protocol parameters in a linear fashion from the activation height, H to exactly H + 210,000 , such that at H + 210,000 the immediate revenue for all mining capacity of alg-A is equal to all mining capacity for alg-B .
While the details may change (e.g alg-B may not start at 0) there will be a ramp up of GPU mining over the course of a year but alg-A % will go in the other direction so there is no overall increase.
just copy over my response to it:
IF the block reward is shifted btw. both algos than you are right, there won’t be any increase, but i have my > doubts this will happen again for several reasons, but i could be wrong with each of them of course:
Zooko said that algo-A can not be changed to timelock or whatever because there is an agreement with the investors which are being paid from the Funders reward. Of course this could be eventually splitted btw. both algos somehow.
I only see just a prosposal, not any verivied changes for algo-A or algo-B, which at least in my option leaves all doors open to whatever. including that algo-B will create additionally coins within the max. supply of 21M.
Lowering the algo-A block reward and later the coming halving will have a serious impact on algo-A, mining operations, whatever… This even wasn’t discussed so far.
IF algo-A miners are aware that their block rewards are proportionally lowered as algo-B rewards increase there would be huge resistance in my opinion.
Algo-B beginning with 0 or very minimal rewards will make it an even weaker algo as i assume it will be.
Until i see something black on white that it IS decided i will set me bet on additionally issuance of ZEC for algo-B…
I think we need clarification on how indeed the issuance and block rewards will be distributed with blossom harmony and the introduction of algo-B, not?
Shifting block rewards from algo-A to algo-B is for sure an option, but would cause other problems of course, especially within the asic community.
Not shifting from algo-A will increase issuance, inflation for sure.
Not even talking about the suggest miner reward of 0 for algo-B in beginning which seems absolutly criticial for me in terms of network security.
As you can see lowering reward will not drive miners out of the network, in fact i think quite opposite. It will drive price of the asset higher, and involve more miners into the network.
Please stop posting false arguments about gpu pow, boxalex, bro.
that’s related to the price change of ETH/BTC in both calculations. On 3 ETH reward you use 3,200 /BTC price, on the 2 ETH reward you use 4074 /BTC, nice comparing, lol. Couldn’t be more missleading.
There is no rocket science involved in making a simple calculation that at same prices a block reward reducting will make it less profitable for the miner OR force out miners with higher electricity costs. On or both will happen, easy as that. Just wait some 10 days more and we can witness in in real time and than you can compare profitibility one day bevor and one day after constantinople in real time at real prices.
But i don’t want to derail this much more important topic so please a moderator to move my and nec’s post into the asic or whatever thread so we can keep this one as focused as possible! @Shawn , @root
That might of been the situation in Dec, but by coinage you’re still making more and the hopes that it will climb back up which you sell then. 3 to 2 ETH reward is going to kill off tons of miners until a balance is achieved. Come the 16th, We’ll see the situation I doubt its going to be pretty.
As far as time locking rewards only for GPU miners, I feel that’s a slap in the face to the miners who supported the network from the very start.
Are you one of those miners? You registered your account four hours ago, and thus haven’t had any involvement in the discussion since October 2016 until now. Yet your first post is an attack on the time-lock rewards?
I feel that’s a slap in the face to the miners who supported the network from the very start.
Or perhaps you’re a user who had an account banned or temporarily suspended for breaking the Code of Conduct and you created a new account with a VPN to continue to vent. I’ll be keeping an eye on new users like yourself.
