The future of Zcash in the year 2020

General
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Hmm, I don’t think it’s true that Snowden is less well-regarded than Assange. Both are controversial, but post-2016 many people see Assange as an untrustworthy partisan at best… FSB asset at worst. I don’t follow his case closely enough to have a nuanced opinion on it myself, but that’s been the majority of commentary that I’ve seen.

Nevertheless, Zooko has tweeted about Assange quite a bit: https://twitter.com/search?f=tweets&q=from%3Azooko%20assange&src=typd

Wikileaks was included in an ECC blog post about charitable giving with Zcash: Zcash Empowers Charitable Giving - Electric Coin Company

Just adding some counter-data on that particular part of your post.

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I don’t think I understand the question, would you mind rephrasing or elaborating a bit more?

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Really quick response because I don’t want this to become a Snowden conversation. - I am personally vested in that conversation and this is not the thread for my diatribe on him :slight_smile:

Im happy to agree to disagree. It was more my personal opinion.

We can continue this in another thread as not to derail this if you like and I can outline exactly what happened and why he is considered a traitor but Assange a martyr.

My point was not Joe publics opinion, but that of the govts ECC is trying to court.

Maybe zooko tweeting about politics and political dissidents may not be the best move for a for profit company trying to convince certain governments that their technology will not subvert their taxing systems, AML, etc. It sucks but that’s how things go. Its far too late now though.

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Sure. You said stake-based voting = plutocracy = bad. So, stake-based polling should only be used as a source of information, not decisions.

My questions:

Who is making the decisions then? And how are the persons making these decisions not in a privileged position of power similar to the very plutocracy you dislike?

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Thank you for the support. I don’t take anything personally and I appreciate the honesty as well as the sentiment.

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Currently the ECC has executive direction over the protocol until the halving (which is by design)
Grant allocation and other Foundation business is the decided by a vote of the ZFND Board members
This comes back to my post above concerning the size of the Board, the value alignment of the members and why accurate polling is important because they have to know what everybody else thinks, (I don’t think this model will change due to the legality of grant allocations of 501(c)3s (?can be seen in this pre viewing key, Taddress only grant system i.e. compliance)), you can read up here about - zcash foundation
The governance panel vote essentially described to the board a consensus and although it may be argued it was somewhat of a narrow view, it was the very first time and given the number of people signed up, the number of people who actually voted and the fact that it all stuck I’d say it certainly was not a failure

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I personally would even add another issue here that fits in.
Who decides on what to poll or vote?

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Ahh, I see. Good point. I’m gonna hold off on answering because we have an essay by @acityinohio, to be published shortly (Monday) that goes into depth about the Zcash Foundation’s approach.

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Sounds good. My concern is that some person/s will have to be making decisions. This is unavoidable. And whoever these persons are that are making the decisions will unarguably be in a “privileged position of power.”

This being the case, stake-based voting still seems to be the best option, as it makes the “decision making group” as large and decentralized as possible. I would rather have this, than a small centralized group of people making decisions (even if those decisions are influenced by stake-based polling).

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A thought - what defines a ‘holder’ and how would they be able to prove that?

Viewing keys should happen for Sapling soon & perhaps they can be used ? Something like ‘this key proves I have held the required amount of ZEC for the required time’, which would allow the holder to take part in a poll/vote.

Not keen on being ‘led by the rich’ although there’s a certain sense of inevitability with anything stake based - maybe a holder should get just one vote irrespective of their holdings.

Looking forward to Josh’ input.

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I like the idea of “time as a ZEC owner” rather than “amount possessed by a ZEC owner.”

But you gotta worry about sybil resistance, spreading a bunch of ZEC over many different addresses and leaving them there for the required time period…

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You’re right, that matters. A relevant passage from our recent blog post about the ZIP process:

Governance fundamentally consists of three questions: What should we do, who gets to decide, and how are the deciders chosen and held accountable?

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Yup, its far from perfect, but might spark a better idea.

It might depend on the numbers, there’s a big difference between 10 ZEC for 1 month, 100 ZEC for 6 months, etc.

EDIT: Just for clarity, by ‘amount’ I mean the minimum balance held in that address over the required timespan.

Could also impact the inflation rate as coins would be locked up in the holders own wallet if they want to take part in polls/votes etc.

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Just a thought, why not combine both? Amount x Time (in months?)

Example1: 100 ZEC owned for 12 months = 1200 Voting Power
Example2: 1000 ZEC owned for 1 month = 1000 Voting Power
Example3: 50 ZEC owned for 24 months = 1200 Voting Power

I could imagine this way things get balanced pretty good.

Just as a side note, yesterday i came across a project that uses special adresses for exchanges so they never can stake nor vote. Interesting approach that could be implented in such scenario as well.

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Just realized that the above approach would have another nice side effect as well. If a given voting window is for example 3 weeks and the minimum time to get voting power is 1 month it wouldn’t be even possible to gain an advantage from sending funds from one account to another and therefor eleminate one of the main concerns automaticly.

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I’m not sure it would work in practice but its an interesting concept.

Each viewing key would require a seperate scan of the blockchain - could be thousands of keys & that doesn’t scale well, it’d take forever.

Edit: Another thought, this would also be an incentive for folks to shield their funds.

Edit: Yet another thought, a poll could be focused on different classes of holders by defining a minimum or a maximum balance for each poll.

It would also be possible to break down results to show differing opinions between small and large holders as their balance would be known.

This would allow rules such as ‘a resolution passes if at least 50% of the shrimps and 50% of the whales agree’.

Edit: The viewing keys could be disclosed to more than one organisation, allowing the counting of votes to be decentralised.

Final Edits:
All this stuff should happen in the ZECwallet companion app.
If the user opts in their zaddr & viewing key gets registered via zmemo.
Users get a prompt when there’s a new poll & votes get sent via zmemo.
Votes should have a small fee (but big enough to prevent spam).
Creating a poll should also have a cost (a larger fee)
All funds go towards paying for the polling infrastructure.

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Hi Anton. Thanks for your question.

New issuance of coins is a transfer from value from all coin-holders to the recipients of the new issuance. This is because the value of each coin is determined by supply and demand, and new issuance increases supply. Therefore issuing new coins does not increase the total amount of value in the system, it only transfers values from the coin-holders (in proportion to how many coins they hold) to the recipients.

(If issuing new coins created new value then we could solve all of the world’s problems by having the consensus rules just issue more and more new coins faster and faster until everyone was rich!)

This is a fundamental truth about cybercoin monetary policy: there are only two mechanisms of sourcing value that the consensus rules can use to effect monetary policy: issuance (which transfers value from all coin-holders according to how much they hold in total) and transaction fees (which transfer value from the people making transactions according to how many transactions they make).

And, there are only three destinations of value that the consensus rules can use to effect monetary policy: sending it to the miners, sending it to hard-coded addresses, or sending it to all coin-holders (by burning it, which increases the value of the holdings of all coin-holders).

Obviously there’s no point in taking value from all coin-holders (by issuance) and then send that value to all coin-holders (by burning the newly issued coins), so that one is a “no-op”.

The remaining combinations are:

  1. The consensus rules can take value from all coin-holders (issuance) and send it to miners. That’s mining rewards.

  2. The consensus rules can take value from all coin-holders (issuance) and send it to hard-coded addresses. That’s what we use currently for the Founders Reward.

  3. The consensus rules can take value from transactors (transaction fees) and send it to miners. That’s how transaction fees currently work in Bitcoin, Ethereum, and Zcash.

  4. The consensus rules can take value from transactors (transaction fees) and send it to holders (by burning it). That’s one of the ideas for a future fee market design that Vitalik Buterin has proposed for Ethereum (EIP-1559: Fee market change for ETH 1.0 chain - EIPs - Fellowship of Ethereum Magicians) and Zcash (Evaluate alternative transaction fee market mechanisms · Issue #3473 · zcash/zcash · GitHub).

  5. The consensus rules can take value from transactors (transaction fees) and send it to some hard-coded addresses. That’s one of the proposals I’ve heard for future Dev Funding in Zcash and in Ethereum.

Now, given that there are only two sources of value that the consensus rules can use to fund developers, which one should the consensus rules use, or both?

Historically — for the first ten years of Bitcoin, the first four years of Ethereum, and the first two and a half years of Zcash — the value of coming from holders (new issuance) is much, much greater than the value coming from transactors (transaction fees). Currently according to https://messari.io/onchainfx/view/14D4860B (see screenshot below), BTC has $18M/day issuance and $1.5M/day fees. ETH has $3.6M/day issuance and $175K/day fees. ZEC has $600K/day issuance and $81.00/day fees.

Hope this helps! I think your question is a very common question so I’m glad you asked.

Regards,

Zooko

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P.S.

One interesting thing about the fact that issuance transfers value from all coin-holders in proportion to the total size of their holdings, is that this is the only decentralized mechanism that can cause people who hold a lot to pay more than people who hold a little! Any other possible consensus rules, for example by charging more for addresses which have bigger balances, the large holders can avoid by making many addresses each of which has a small balance.

Of course, issuance charges big holders proportionally the same amount as it charges small holders. Like, if the consensus rules issue 1% of current total supply, then all holders big and small are effectively paying 1% of their value of their total holdings.

As far as I have been able to figure out (in many years of trying to invent different mechanisms) any other possible mechanism would wind up taking more from small holders, proportionally, than from large holders. Issuance is the best we can do in terms of making sure large holders pay an amount proportional to their total holdings instead of somehow getting away with paying a smaller proportional amount than small holders do.

Note that taking value from transactors causes everyone to pay in proportion to how many transactions they make — regardless of the value of their total holdings. If the value that holders are gaining from the system is value from holding rather than from making many transactions, and if the system is sustained by transaction fees, then the holders (large and small) would be getting a “free ride”, and the large holders would be getting a more valuable free ride than the small holders would.

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Hi there, thanks for the question. Please see my answer to Anton above (The future of Zcash in the year 2020 - #240 by zooko) and let me know if you understand why I think that issuance is a transfer of value from coin holders. Thanks!

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Hi Everyone,

Here is a proposal that I had earlier posted on twitter:

  • 20% split between company and foundation for years 5-8.
  • Only to be spent on research, development and adoption of zcash, no more funds to the early investors.
  • A mandate to deliver a voting system for dev funding after year 8.

link to twitter: https://twitter.com/ask_aristarchus/status/1129618217754943488

I want to emphasize a few points about what I have proposed:

  1. This is not the same as the original founders reward. No funds would be given to the early investors or advisers. The funds would only be used to strengthen the zcash protocol, and hopefully increase the value of our coins. :smiley:
    This means paying for researchers to continue to push forward with cutting edge privacy and cybercoin ideas, and paying for engineers to continue to maintain and improve the protocol. It also includes the important advocacy for zcash that is currently happening both in the foundation and the company (such as the 11pm meeting with a foreign country that @joshs mentioned in his post above.)

That’s it. The funds would only be used for these things that benefit the entire zcash community.

  1. With two entities receiving funds there is no single point of failure.

  2. The plan would be for this 20% “Development Fund” to continue after year 8, with a more formal process for the community to select the funding recipients. I see there is already some good discussion about stake based voting in this tread.

I am putting this idea out here now because we (the zcash community) need to start proposing more specific actions, and eventually submitting one or more zcash improvement proposals (ZIPs).

  • Aristarchus
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