Zcash as a Payment System


#21

Yup, thats the one. I just found it funny given how important privacy is.

Apart from that, the uri for a ln node publishes its external ip, as private as a billboard. Sure, its fast but still sucks!

BOLT is going to be interesting.


#22

still … anybody minds to answer …? What about US or EU regulations?


#23

Zcash is much more powerful than any paper pushing politicians and their regulations.


#24

Zcash empowers the user to be able to comply with any local regulations. Have a read through the article I linked above, Zooko talks about US regulators being very receptive of Zcashs privacy features.


#25

This doesn’t answer my question at all. Maybe it’s not formulated exact/good enough so i will give it another try:

That’s the beauty of an open, permission-less, worldwide immutable currency. It’s not subject to the rules of a Venezuelan dictator or Japanese regulations.

what about US or EU regulations? just in theory …

What would happen IF in 2 weeks the US and EU decide even harder regulations on privacy coins (let’s say especially ZEC) like in Japan for example.

  • Would in influence the Zcash co if it would be a sudden illegal/forbidden for US and EU citiziens?
  • Is Zcash co US based and would such regulations have direct impact on Zcash and/or the Foundation?
  • Would it affect US and EU based exchanges, or other exchanges worldwide as well?
  • Would such regulation affect the current and future developement?
  • Would such regulation affect partners like businesses that accept ZEC but are based in the US and EU?
    and so on, i guess you get the idea what i have in mind…

#26

@boxalex We’re going a bit into the weeds here. You are asking for some sort of position of Zcash Company or Zcash Foundation “what would happen if” some hypothetical regulations were to come into effect. The short answer is: I don’t know. That’s a better question for Zcash Company or Foundation when something actually happens.

If you read the link above Zooko seems to think that most regulators don’t see Zcashs privacy as a negative. And neither do I which is why I disagree that Privacy should be counted as a -5 as mentioned in the article we were originally discussing.


#27

I got motivated to ask these due exactly your comment:

It’s not subject to the rules of a Venezuelan dictator or Japanese regulations.

Hence why i ask what happens if such regulations are decided by the US or EU, this isn’t too far from Japan regulations by the way.

It’s one thing to say regulations don’t matter if they are 10k miles away, but it seems it’s a different matter if such regulations are made right in front of your door, not?

And as with many questions and concerns i disagree that these should be raised when something happens, actually it would be smarter to have a plan when something happens, not? Normally it’s too late when a given situation happened allready, at least in most cases.

Zooko may think whatever he decides about regulators, but the important part here is what regulators think about ZEC, if it’s either positive or negative. I as well thought that Japan is a very liberal country and one of the last that would enforce some regulations on privacy coins, but … i was wrong.

And in my opinion these are exactly the points why the author gave a -5 having in mind the current “crypto environment”, upcoming regulations and uncertainty exactly about these.

IF such elementary questions about possible regulations and their impact can’t be answered than the author is absolutly right with: the crypto world cannot escape regulation. It is therefore inevitable that the privacy and anonymity of users will come under fire.

It would be a different story if you have green light from the US or EU for example, but in my opinion we don’t have more than a yellow light which could get green or red some day, who knows…

Don’t get me wrong, i’am all for privacy and ZEC, but this doesn’t mean that i won’t agree with valid arguments or concerns…


#28

I understand where you are coming from. There is nothing wrong about asking questions and speculating, that’s what forums are for :wink: . I just don’t have better answers for you.

I do think it is a different story in the US. The NYSDFS (the most strict cryptocurrency regulatory agency in the US) has specifically approved Zcash and it’s private transactions. That to me is a pretty big green light.


#29

If I may… ‘viewing keys’ allow access, which is remarkably similar to a viewing a bank account.

I can imagine a regulator requiring/demanding access using the same methods when investigating etc - probably a court order.

The interesting part is ZEC can accommodate this, other ‘privacy coins’ cant. Being able to satisfy regulators (or other legal requests) is a huge benefit IMHO.


#30

From long ago (2 years)


#31

It’s about Gemini. I don’t have an account on Gemini so i’am not familar with it, but my guess is that it uses only Tadresses, or?


#32

What’s important about the approval is that it explains Zcashs different addresses and allows for them both to be used on Gemini. The NYSDFS issues the most difficult Bitlicense in the USA so to have Zcash approved is a big deal.

I don’t know when Gemini will start supporting them, but they did say that they were looking into it. Since Sapling this should be easier, but maybe not enough for an exchange with thousands of transactions per day.


#33

Yes, only T addresses. Probably never Z addresses on Gemini or Coinbase, but they are the only privacy coin fiat on ramps in the US.


#34

It is absolutely viable from a fungibility standpoint but lacks (as the vast majority of cryptocurrencies) in scaling terms.

If there was a sudden mass adoption and usage of Zcash as a payment option, I’m pretty sure the network would crawl and would become unable to process transactions in a timely fashion.

By now, I have been convinced (although I would LOVE to be proven wrong in the near future!) that layer 2 implementations like LN/BOLT are not the solution to scaling. They are definitely very useful technologies and will be solving real life problems for those use cases where payment channels make sense. But payment channels have so many drawbacks and problems that cannot be THE scaling solution for the entire network.

I’m also not a huge proponent of big blocks (but not against either). Those solutions have other kinds of problems, mostly regarding centralization, block propagation etc.

My hopes for now (until something better comes along) are mostly on solutions proposing to use zk-SNARKs in order to help with scaling, like moving block validation inside a SNARK etc. This is, of course, in very early stages and will take time to become efficient enough for real world use.

So Zcash has the potential to become a real world payment system (has all the properties of fungible currency) but first we need to address the scaling problem, otherwise it will end up like losing adoption like BTC.


#35

@rex4539 I have been recently shifting my thinking about scaling as well. With new protocols that implement recursive zkSNARKS (like Codas succinct Blockchain) it seems possible that second layer solutions may not be needed.

The Coda developers had a good talk at Zcon0 that’s worth watching: https://youtu.be/qCVACpgQSjo

I think you are right about the limitations of constantly increasing block sizes: it will eventually reach a dead end at scale with only a few mainframes being able to process the huge blockchain. And as @ChileBob pointed out the LN has many Privacy leaks, is difficult set up, along with funding payment channels: still has a long way to go before it’s the solution.

In the meantime, as those more advanced protocols are hashed out Zcash has the options of adopting second layer solutions like BOLT (which they are already working on) and if needed slowly increasing block size via hard forks. That should be enough to get us by if more network capacity is needed until a much better solution comes along.


#36

A random though about BOLT, nodes & payment channels…

We have this wonderful mechanism of encrypted memos, so a fully private zaddr-zaddr transaction could contain a ln/bolt channel URI, payment to create a channel & liquidity for the remote end.

I’m sure smarter minds than mine are already working on this.


#37

It’s important to note that BOLT is off-chain. In my opinion any real global payment system needs to be on-chain or automatically handle open/close transitions without requiring the user to figure it out.

There are several inherent problems with the second-layer model. The main bottleneck is on-boarding and being able to close a channel inexpensively. In the case where on-boarding fees are low, people are disincentivized to use off-chain at all. On the other hand, when fees are high users are disincentivized to use that coin for general payments, which pushes users to lower-fee coins. In my opinion, this is why second-layer will only be used by exchanges or larger entities with a lot of frequent transactions. Normal users won’t really gain any benefit from the second-layer.

Another issue is privacy and potential hub KYC/AML requirements, which BOLT is attempting to fix.

Requiring a user to be online when receiving payments or using a lighthouse is another issue. We can’t expect everyone using this payment system to run a full node at home, at least not until there is a hardware-based full node implementation, and we also can’t introduce middlemen services to act as an always-online hub. In my opinion, introducing or requiring middlemen services - outside of mining to facilitate transactions - defeats the purpose of using cryptocurrencies in the first place.

Just some thoughts, correct me if I’m wrong somewhere.


#38

Are middlemen much of a problem when using zk-SNARKS? The transactions will still be private. I don’t think people will run nodes either so middlemen is the most likely scenario. Cryptos have to be seamless to use for mass adoption. If a node was self-contained in a wallet on a smartphone it could be doable but otherwise it won’t work. Another big problem is losing coins because it was sent to the wrong address, being hacked etc.


#39

Introducing middlemen will add fees that don’t go towards directly securing the network. It starts to look more and more like a traditional banking system, especially as those middlemen start to demand de-anonymizing info over time after the system relies upon them for basic operation. It’s a route we shouldn’t rely upon as the main scaling initiative. Nice to have for some use cases, but not all use cases.

Cryptos have to be seamless to use for mass adoption.

Totally agree. But I disagree that LN/hub-spoke model is the way.

Adding middlemen hubs also removes the need for a second-layer, as centralized hubs have no problem with larger blocks, larger bandwidth requirements and high processing throughput. Normal users will be using SPV-like wallets at that point.

I think we need to be moving towards a succinct blockchain snapshots as soon as possible while also making opaque addresses the default so that there isn’t an inherent presumption that someone using them doing something wrong. Governments are rushing to de anonymize addresses right now. Your transactions deserve to be private even if you don’t care about someone knowing that you bought a bagel with Zcash.


#40

Good talk with Josh from Zcash Company, Coda Protocol and Starkware developers about zkSNARKS and gets into scaling;

https://youtu.be/NmnnO8lPssE