L1: scalable & private or FIN
Fact: Zcash := Bitcoin + slap on ZK cryptosystem that hides who2who and how much.
Privacy: The masses like convenience, can zcash offer both: yes. Apps & co. Yet by piggybacking bitcoin we add nothing but privacy on L1. Thats ok due bitcoin being risk averse (devs didnt even merge confidential transactions Not based on moon math), retaining the L1 edge.
layers up: btc|liquid|lightning|apps <--> parallel tor & co The higher up the stack you trade security for privacy
Problem: Privacy is a spectrum/stack and bitcoin is becoming one, to the point that it is feature complete for 99% of usecases. Private financial transactions will happen up the stack for increased privacy needs (eg liquid, privacy enabled sidechains etc), but yet deep enough to inherent the bitcoin security. A worldwide competition for blockspace will be in place, for which the many L2 solutions are competing for pushing the tx beyond 100$ range - ossification happens. Analogues to the ‘gravitationl’ pressure, the economics will automatically funnel the tx into the correct stack height. Buying coffe? up you go. “Tokenizing your house” tx? down you go. The further down the less likely the tx sender is a natural person, but a protocol or coporation immune to the repercussions of a lack of ‘privacy’. (eg company x buys 30k of btc and disperses the risk to non-natural persons, contracts and key escrow)
This reduces the base to a few 1%, the high networth individual (the early adopter) that becomes a valuable target to the “the economy of law” for a criminal sting And is unwilling to live in a secured castle, nor does he want to play cat&mouse or form an interest group. Insurance products wont help unless able to resurrect the dead.
After all, is zcash just a smart 90s cypherpunk pipedream experiment of a guy that wants to buy coffee with bitcoin, but privately? The Zcash community now has one major task, To scale privately on L1, if unment will have nothing more to offer.