Why was this post flagged and hidden? It adresses a whole couple of questions and concerns regarding the current FR and even the future of Zcash, fits in perfectly into this topic, but seems someone isn’t liking and instead of answering some valid questions/concerns this article gets censored & deleted?
What’s next? Ban hammer incoming?
Posting the link to the article, and discussion of the article is not the issue @boxalex but copying/pasting the entire articles contents
verbatim is a violation of the Code of Conduct which states:
“You may not post anything digital that belongs to someone else without permission. You may not post descriptions of, links to, or methods for stealing someone’s intellectual property (software, video, audio, images),”
Your posts quoting from the article, and discussion about it remain, only the post that copied the entire contents of the article was flagged.
I did. and in my response to you I stated that your argument only stands if there is not a total cap on supply. I guess we agree to disagree - I am of the view that mining coins does not create value, it gives value to already mined coins because you are getting closer to running out of that 21 million.
sorry if this comes of as harsh. im in a really bad mood, see my RandomX thread.
EDIT: I hadn’t actually read that post, I thought you linked to another one. I am sorry. My point still stands.
However you are entirely correct with the fiat example. Lets use gold instead.
So by me mining gold out of the ground, I have transferred wealth from every gold owner to myself. I get that argument.
I cannot magically make more gold than is in the earths crust, so I have transferred a greater value to the current holders of gold by getting closer to no more new gold.
I am adding greater value from scarcity than I am taking from dilution. In the short term you are correct, in the long term I am. where is the cross over point? I am not sure. Im going to the pub. I need a beer.
This is nothing to do with my point. I agree with what you say here 100% - The idea that the block reward creates value in and of itself is wrong. I do explain what the block reward in bitcoin was for in an earlier post to you in this thread. My point is dilution v running out.
EDIT2:
If you see block rewards as dilution, then what justification was their for a 4 year FR rather than one that matched the emission curve? surely by your own logic the FR is the greatest thing to devalue zec.
This isn’t actually my stance on it, but how does this logic not follow? what have I missed?
And how did you come to the conclusion that i don’t have permission from the author to post the whole article on the Zcash forum? Actually i have the written permission from Andrew Munro, the author of the article at finder.au.com.
Posting this article from Andrew Munro again after it was deleted due the wrong assumption that i don’t have permission to post the whole article.
This article adresses some very valid questions, concerns and describes the current state of the Founders Reward really good as many of us might not be aware how the Founders Reward is distributed it’s a good easy read to understand what actually leads to the situation that the ECC company runs at a deficit no matter the Founders Reward generates a huge amount of funds.
The Electric Coin Company (ECC) is one of the key entities behind Zcash, one of the world’s foremost privacy cryptocurrencies. It’s now being sued by former employee Simon Liu over allegations that it failed to compensate him as agreed for his work.
Here’s what allegedly happened, according to the lawsuit:
The “units of stock” referred to in the lawsuit are “membership units” in ECC. This is both an equity share in ECC itself as a business, plus the system by which the Zcash “Founders Reward” (FR) is distributed among founders and vested ECC employees.
The FR is a cut of all the Zcash coins (ZEC) being mined. It is currently 20% of each block reward, and will eventually drop to 10%.
According to the latest ECC financial report, the total ZEC mined each month in the second half of 2018 were being distributed like so:
The top 80% is the portion that goes to miners, the bottom 20% is the combined Founders Reward.
We know that ECC CEO Zooko Wilcox was earning 2,033 ZEC – worth some $305,000 – per month as of July 2018. Extrapolate that to prices of $60 and assume no other changes and it suggests he’s earning some $122,000 per month today, equivalent to a 13-14% share of the total funding that goes to founders and vested employees.
Meanwhile, the total ECC monthly operating expenses were $700,000 per month, it says, distributed as such:
The Electric Coin Company budget, as you can see, is only getting $367,500 of that though. It’s operating at a significant loss, which the financial report happily admits.
“The company’s operating cost in the second half of 2018 averaged $700,000 per month. An additional $180,000 a month was used for employee compensation during the period. As such, the company has been running at a significant deficit,” it shrugged.
The company has about $5 million in ZEC and USD in the bank, and assuming everything stays as is, it will be out of money by October 2020.
The Electric Coin Company has made no secret of the fact that it’s walking on thin financial ice.
The total ECC annual operating budget is $8.2 million and it’s going broke, while the company’s CEO is getting $1.464 million per year. Assuming these numbers are correct, the Electric Coin Company CEO’s earnings are equivalent to 17.85% of the struggling company’s annual budget.
Even in a world of disproportionately high-flying executives, that’s pretty wild.
Of course, you can’t really separate the amount going to founders and vested employees from the company’s finances itself. The Founders Reward is hardcoded into Zcash as a system that currently diverts 20% of the mining rewards to the specified Founder wallets, so those founders, including Wilcox, are directly funding the Electric Coin Company with voluntary donations of their own. That’s where the 2.8% comes from.
This means that if you’re not a founder, your payment as an employee of Zcash is dependent on good old fashioned employment contracts and trust. If the lawsuit is true, it’s a trust that’s being abused.
“[ECC] also promised to compensate [Liu] by paying him a share of the ‘Founders Reward’ in proportion to his limited liability company ownership equivalent in option membership units,” the suit says. “[ECC] did not have authorisation to issue common stock to employees in 2016… [ECC] did not grant any incentive stock option to [Liu] to purchase Zerocoin’s common stock.”
Perhaps recognising the disproportionate amount of funding being diverted to the founders and vested employees, the ECC agreed to release additional share units in in June 2019, which was allegedly one of the things that sparked the lawsuit in the first place.
And then there’s the Zcash Foundation, which is getting a bigger slice of the funding than ECC itself for performing what sounds like a very similar function. It’s being funded by a pre-agreed portion of the Founder Rewards.
“The Zcash Foundation’s mission is to be a public charity dedicated to building Internet payment and privacy infrastructure for the public good,” it says of its purpose in life.
“Electric Coin Co. builds software in support of our mission to empower everyone with economic freedom and opportunity,” the company says of its purpose in life.
Some cryptocurrencies created non-profit organisations to serve as the chief entity behind their projects, while others created for-profit business entities. These entities have typically been funded with ICOs or pre-mines.
Zcash created both, and then funded them both with a system that doles out ongoing mining rewards to a small handful of key players who then voluntarily fund these two organisations. It’s quite different.
What we have here is a company’s piece of code that’s vacuuming up an enormous portion of its product’s total earnings and giving it to a team of executives and investors, only some of whom are employees of the company, who then donate some of it to the company they are employees of. A portion of the executive earnings is also diverted to a separate charity organisation whose board members also include some founders of the company.
What started as an effort to imbue the organisation’s finances with a new level of transparency have also made the entire thing wonderfully opaque and complicated.
This is reflected in Liu’s lawsuit. Not only is it targeted at the Electric Coin Co. itself, but it’s also aimed at 50 anonymous “John Does” who are together alleged to have breached their contractual obligation to grant equity (a share of the Founder’s Reward) to him.
Presumably, those John Does are Founders Reward recipients who agreed to dilute the supply of Founders Reward units to help address the funding crunch the Electric Coin Company – the company rather than its mish-mash of investors and founders – are experiencing.
So who’s going to foot the bill for this lawsuit? And how about the next lawsuit, and the compliance hurdles bound to face a company that’s building an anonymous digital currency? The Electric Coin Company itself, as a business, certainly doesn’t have the budget.
The Founders Reward was meant to encourage long term interest in the wellbeing of Zcash, but it functionally appears to have turned into a system where a business is dependent on charitable donations from its own founders to manage routine expenses.
History says that those founders have not tended to be overly generous. Plus, like any open cryptocurrency, Zcash is largely dependent on volunteers to survive, but there’s not a lot of incentive to start volunteering when there’s also a team of well-paid founders and investors hanging around.
The Founders Reward is also a revenue model that doesn’t offer much room for flexibility or growth in the Electric Coin Company business itself. You can’t easily hire people to expand as needed – especially if they want to be paid in real money rather than ZEC – and you’re also firmly wrapped up in the volatility of crypto as a whole.
It also means there’s a constant undertow of selling pressure running through Zcash from the founders and miners who need to fund their operations, and if the most recent ECC financial report is any indication, another price drop could be disastrous for the Electric Coin Company.
If the company goes under, who’s going to pay its creditors? What about back-pay for its employees, or suppliers? Will the courts try to garnish the Founders Reward? Plus, if ECC goes bust, ZEC prices would almost certainly plummet, instantly making everything worse for everyone.
If ECC is necessary for Zcash, it probably needs a more reliable funding mechanism than those founder donations. And if it’s not necessary, why does it exist?
Zcash is a grand experiment in more than one way, but it’s having a tough time in the face of real-world conditions.
You have shown zero evidence that you actually asked for permission to post it before you did the first time. But since you now have it users flags for removal will be ignored. Cc @paige
Can we get back to the actual subject of the thread:
Do we extend the Founders Reward? Yes/No? How do users vote one way or the other?
Hi all, I just posted to the forum advocating that anyone making proposals for either dev funding or governance decision making do so as separate forum posts for each proposal: Dev fund proposals & sentiments - #16 by nathan-at-least
If proposal advocates could do this, it will be a good step towards refining and clarifying specific proposals, which is necessary for any decision process around these proposals.
I think that’s a good idea. There are several that I have seen in this thread but it’s getting big so they can be difficult to find.
If @garethtdavies @Morpheus or any others who have put together a specific continuation proposal would start a separate thread with thier ideas it would help narrow the scope if the discussion to that particular proposal.
And if you are against any changes to the FR @hloo and others, then users can also start thier own thread with thier reasons and any ideas (outside of scope for a direct ZIP proposal) for continuing development.
How about we make some sort of separate category for these to go into @moderators ?
Can we use the community-collaboration/protocol category as Nathan suggested in Dev fund proposals & sentiments - #16 by nathan-at-least?
So get off your lawn and go play somewhere else. I am disappointed. But I will respect the views of the community and stay out of those threads. Good luck with what you decide.
Although echo chambers rarely breed success.
what’s the meaning of that post? I couldn’t understand anything, seriously…
I was tired when I wrote that, its is full of colloquialisms. let me elaborate.
Shawns post directly addressed @hloo because he has been a vocal critic of any changes to the mining rewards distribution. (as have I)
Saying that these threads that the “advocates” make are not for people to complain in, but for people to say good things. So stuff like “zcash promised 90% of rewards to miners” shouldn’t be in those threads. How far this extends? I do not know. I feel that even critique actual flaws in the plan will be moved from that thread.
So he is asking that I do not post in those threads as not to derail them. Because the line between critiquing an idea and “against changes to the FR” is subjective. I will not post in those threads.
This means those threads will quickly devolve into people just agreeing with each other without putting critical thinking in because they are positive to the initial idea. This is called an “echo chamber” where all you hear is like minded opinions rattling around. This is not great and rarely produces things that work.
As I said in my post, I will respect the will of the community and not post in those threads. In fact I have made my position clear on this topic. There is no space for /my/ opinion in this conversation (in realtion to ZIP’s, and therefore the protocol), because it is the wrong opinion. Which is disappointing.
EDIT: the other side of this argument is that strong dissenting voices will discourage some from sharing their ideas. It one thing I have been wrestling hard with. I feel very strongly on the dev fund, but this isn’t about me. It is about everyone. So I don’t want to intimidate or stop people from posting.
In all fairness though, it is all just wasted keyboard strokes until the ECC signals their intent (4days from now?)
Thx, the approach for the other thread sounds pretty manipulative than, if critic voices are “not allowed” to post/add valid questions, concerns and similars …
That’s not how I read the suggestion. Several people have proposed ZIP ideas, but for any ideas to be realistically considered, they need to be turned into ZIPs (or more accurately ZIP drafts). Per-proposal threads with focused discussion will make it significantly easier to crystallize the proposals into ZIPs, and those ZIPs can then be discussed and debated in more general threads like this one.
In my mind, the per-proposal threads would be like working groups; people contributing there have a shared desire to create a strong proposal. It is useful to have varied discussion and constructive critical thinking in order to ensure that the resulting ZIPs are of high quality and more likely to be broadly accepted. Meanwhile, general feedback that applies to most/all of the proposals (such as disagreeing with the entire premise) should probably remain in the general thread. I trust the forum moderators to manage that split, as well as distinguishing between constructive and destructive criticism.
I agree this will be the effect, however I do not believe it comes from a place of ill intent on behalf of the moderation team. It is something they are trying to do as a kind of containment, to help with their moderation.
We are going to see lots of threads popping up that suggest violation of what, at least myself, consider to be sacrosanct crypto, and the initial promises as laid out at the start of the project.
So the threads will go something like this:
I don’t disagree with the intent of your post. However it is not moderation I am worried about, it is the shit flinging and ad hominems. look at the ASIC thread. We are talking about starting 12 of them at once.
I was responding to a specific point aimed at myself and others that made it clear that my input to the threads is not wanted and may get a warning. - It will certainly mess up the thread.
I made no statement about the rest of the post (which from a moderation point of view I completely agree with)
I am specifically talking about my behaviour as in I would respond to the threads with “you cant go past 21 million coins”, “90% of all rewards go to miners”, “A private company shouldn’t be bailed out by a community”, these and other sacrosanct crypto values I cannot get past.
So no matter how good the suggestion I will refrain from adding my input because it will be seen by some members of the community as personal bias which will derail the thread.
This is not a problem when in a business meeting. It is on the internet.
Yes this is what my post way saying.
However this will cause people like myself to feel alienated (hence the flippant “get off my lawn” remark) and it will not allow those less informed of the real world implications of the suggestion. This leads to an echo chamber, because I or others cannot post their points in the thread without the taint of being a dissenter. Which then derails the thread and new people wont post their ideas.
A very uncharitable way of look at this is compartmentalisation so new players have limited access to partial information. The charitable way is what you mentioned.
EDIT: Why was talk of redistribution of the FR verboten and heavily censored in threads (something I agree with, it shouldn’t be messed with) but redistribution of mining rewards is encouraged?
In particular that was a single member of the mod team from ECC that chose to unilaterally close the thread, and was overturned by the rest of the team. In fact it was that incident that caused Zooko to call for the forums to be transferred to the Foundations control.
I didn’t mean to suggest that users _ shouldn’t _ be critical of ideas within the suggestions threads, and criticism won’t be removed/moderated out of those threads. As long as the CoC is followed all sides of the story are welcome to post as the feel fit. But Ad hominem attacks against the person instead of the ideas are not acceptable.
My point was to encourage users to stand on thier own, in thier own threads, and champion thier ideas for what the community should do. Having everyone continually post in one thread is not the best way to distill the many different approaches into a few actionable items.
I guess I made my point badly again. I understand the intent of your post.
The thing was we could talk about it until we were blue in the face. It was made clear that it would make no difference. I agree with this. you cant mess with someone’s income.
Every post that mentioned it was moved to a contamination thread that just died, because it was an echo chamber of people hating the FR.
Compared to now, where anything goes as long as it doesn’t impact the initial FR.
The community did not have the power to redistribute the FR but the have the power to redistribute the mining reward? see why I am upset? (Even though I don’t mine - I was upset people wanted to take money from ECC employees or FR recipients)
It would help me if you could claify what you meant by this
I think I have found the confusion
Does this mean
1 - That I start a thread titled Why we don’t increase 21mil cap and we all talk about that in there, so that is not brought up in every thread about that?
or
I certainly thought it was the first, and I think @str4d did too. - This method seems the best method for containment, which should lead to better discussion if the thread is curated.
If its the second, then, idk, it might work. Please may I have some help with my first zip.
Would you please be clear on how to proceed, because I might have to proposals that are antithetical to each other.
I was quoted in that long post of proposals about a suggestion I made on fees, am I now expected to champion it? in under a month? Im not even sure I want to suggest it if the funds would be redirected to the ECC. I have just added a zip to do the very opposite.
Hi @mistfpga there seems to be some confusion or misinterpretation of my suggestion. I did not request:
The sole intent of my request is so that every proposal has a unique and separate location, that everyone can see, that has the up-to-date refinements that the author intends. This way, everyone knows which proposal anyone is talking about.
With that in mind your ZIP proposal Keep the status quo regarding block rewards post is perfect. 
I’ll go post a suggestion there for improving it.
Are there any legal implications of a 501 c 3 receiving a Zcash developmental tax, (zcash mining is optional but the tax isn’t) and distributing X portion of this tax to a for-profit entity responsible for developing zcash?
I know it’s always been kind of touchy matter but assuming the senders receivers switched does this change anything?
And if so which of the proposals still stand?
( I suppose all of them where the ZFND did not fund the ECC…doesn’t look like any of them do)
They are good proposals but the thing is I still don’t understand how and if the ECC would be able to maintain the same efficiency and development while dealing with a multisig decision making system
We would all like decentralisation but is the trade-off worth it? Is it even relevant to the proposals and I’m just looking into it too deeply?
