Zcash Social Contract

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Context is panel discussion at Zcon4: Zcon4 - Day 1 Track 1 #zcash - YouTube

Is the economic issuance of Zcash part of the social contract?

I feel like most of the panel, and probably a good part of the community, has some kind of narrow view on this; maybe a case of groupthink? Who cares how many Zcash tokens there are, seriously. I could be wrong, but it seems pretty obvious that the motivation behind this thinking is some kind of reassurance we get from the idea that it worked for bitcoin, and after all, limited supply implies that the value will have no choice but to go up as demand increases. Have you ever heard of growing the pie?

The number of tokens is just a variable that we should discuss like any other. There is no sacred number as far as I’m concerned. Obviously, old and new investors in Zcash want to see the value of their investment increase, which is perfectly fair and should of course be taken into serious consideration. Now, if we had an economic rationale that would explain to these investors why doubling the maximum number of tokens to 42M would have the best chance of bringing success to Zcash, I’m pretty sure you’d at least get their attention, and possibly their support. Today there is no such reason, but we shouldn’t limit our options without a good reason. It’s just cringeworthy to hear this from this panel of otherwise smart people.

What other, if any, aspects are part of the Zcash social contract?

Ok, why are we here? Private, fungible, cash for the world. Is anyone really here for anything else? We have the best technology for privacy, so while there’s room for improvement (private only txs, hardware wallet support, etc), we’re doing great on that front. As for cash for the world, it’s really two components, one being scalability, which is certainly a work in progress, as well as stablecoins, which is even more of a work in progress.

So yeah, let’s keep it simple and exciting. I’ve been here since day 0 of Zcash one way or another and the last thing I want is a repeat of the small blocker mindset personally, thank you. I’m here to see Zcash improve the world of financial privacy, especially for those who need it most. If a few of us get rich along the way, good for them, but it just shouldn’t be the top priority.

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This is why voting based on the dollar value of coins is needs to be implemented immediately. We can’t have people gambling with zcash future. Plus people who understand money should be put on the board. i’m for diversity; but we should have a concentration of knowledge. Especially focused on understanding what gives money value.

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The limit makes sense to me and many people. It’s not even worth discussing if you don’t want to bury Zcash right now. I think it’s time for us to write The Constitution of Zcash so that discussions around unshakable things stop.

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Oh, then definitely, it’s something that should be put in a constitution. Thank you for strengthening my point on groupthink.

Well on this I agree. It’s just a variable, which at this point in time, appears to be fine.

Personally I want what’s described in this blog post. And it’s certainly not by following blindly what other projects did that we’ll get there.

Or we can copy, but then let’s not pretend we’re here to lead the way.

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:point_up_2:

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I agree here strongly. It is a flagrant affront to all ZEC holders that here in a time of $30.00 for each ZEC, and an economically distressed ECC, that the Zcon4 board would host a hypothetical discussion about breaking the 21 million coin hard cap which has been affirmed since the original launch of Zcash, as a private variation of Bitcoin.

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I’m not too surprised by the reactions here, although they certainly show a lack of confidence, understanding and possibly hypocrisy.

Let’s deal with the hypocrisy first: I am quite convinced that if we suddenly decided to limit the number of ZECs to 10500, all the loud voices against changing the sacred 21M would be much less vocal. In fact, this is what happened with the excellent Numer.ai project.

Lack of confidence then? Do you think that the value of the ZEC lies in the fact that the supply is limited to 21M? Do you really think that the ZEC is so fragile that its value is strongly linked to this “sacred” variable? Be realistic, if I may.

I’m no economist, but I’m certainly looking forward to reading the opinion of people more educated in the matter than me, in what models we could pursue that would increase the chances of success for our project.

Ethereum is deflationary right now. A lot of people with a small blocker mindset said it wouldn’t work and guess what, it does. Polkadot is quite inflationary and the reasoning (if you want to look it up) is also completely rational. One of the two will probably do better than the other, but it’s very hard to tell at this point unless you’re at the beginning of the Dunning-Kruger curve. What does that tell you? It’s okay to try something new that we believe in, as long as it’s backed by strong rationale and makes sense in the context of the project.

Afraid of forking because of a potential decrease in token value? Then let’s fork as soon as possible, I buy some ZEC every week and will gladly buy cheap tokens from those who believe in the 21M god value.

Again, I do not know of a better model than 21M at the moment. But should a rationale pop up that may make the project stronger by changing the supply, I’m sure we can convince large token holders that it may end up being good for them too.

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Any change made to the total supply would completely destroy the characteristic of digital scarcity. Any benefit that changing the total supply may bring would NEVER outweigh the benefit of digital scarcity.

If you want to change the supply, fork the coin.

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Yes, I do. And @Zooko does also based on his Zcon4 remarks.

Part of Zcash or any other crypto currency project’s value proposition is that network tokens exist and can be instantiated by mining or staking, or burned (see BNB), et al within a protocol defended set of rules that are very hard to manipulate via changing-contemporary community opinions. The bitcoin block size wars and the Ethereum proof of stake upgrade are great examples of how either 1. ossification, or 2. change can be successfully provided by the ecosystem. BTC Bitcoiners demonstrated their strength by rejecting and defending against broadly non-welcomed themes to change block size. ETH Ethereans (having already outlasted and outperformed the ETC Ethereum Classic snafu) collectively incubated and ultimately delivered a radical change to their protocol consensus mechanism. I believe that both projects made correct actions.

For Zcash as a project old in age, and whose builder institutions are under economic distress… and whose builder institutions drive an outsized impact on community discussion via a powers-that-be orchestration, a knee jerk change to the otherwise sacrosanct long term hard supply cap would cripple the project. To be whimsically floating the idea of changing the 21,000,000 cap at the largest annual Zcash conference risks massive Zcash brand damage.

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  1. Nobody here is talking about a knee jerk change. I’m arguing that a strong argument for a change could eventually be made, and it could convince the community, including largest ZEC holders. Clearly not happening today, but I’ve seen it (changing the issuance/cap) happening successfully in Numer.ai as well as Ethereum, so definitely don’t discount it here.

  2. I can totally see the community eventually will need to split (fork) on this. I’m definitely not here to defend “sacrosanct” variables. I’m here to see the world transact using the Zcash blockchain and be provided with the kind of privacy that Zcash already has today.

Don’t be afraid of forks. Bitcoin forked several times. Ethereum forked as well. When a blockchain forks, it shows people care about different visions and want to explore each. No forks? Maybe people don’t care much about the project?

Zooko was right on when he (if I remember correctly) encouraged friendly forks.

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  1. Your argument if you really think about it is for ZSA. In fact you are arguing for a privacy based collateral backed stablecoin if have any concept of money. There is no need for forks if you open up the blockchain to do what you want. Just do it on the existing blockchain as a ZSA? Hopefully the community can come to the realizataion rather quickly the answer to all this is ZSA and stablecooins. The freedom to choose, in a private way. If you can find people willing to transact based on a token with no collateral that is great. Im all for it. But you also should consider you are promoting something that is less stable, orders of magnitude less trustworthy, and more susceptible to fraud and corruption than the USD. For all of its faults, the federal reserve has done an amazing job in maintaining the strength of the USD. I personally want to transact daily using a USDz fully backed by treasury bonds that has yield and hopefully own ZEC that can be the engine (or gas) of a vibrant privacy based money ecosystem.

  2. If your answer is to just take what was funded by ZEC holders whenever you desire, I think it is clear people care more about the project than you do. ZEC needs to create a blockchain that makes forks eneconomical and undesirable. ZEC needs to have a substantial proprietary element in order to protect ZEC holders investments and savings held in ZEC. This is why I am becoming a believer that at least some (and I hope a very small mintority) of people dont understand or care about the importance of ensuring ZEC has a “store of value”. If things can just be taken, and forked, its impossible to be a store of value isn’t it? It is just a technology sandbox and not money.

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Friendly or Adversarial… it doesn’t matter, those are buzz words used by project members to attempt a narrative framing around a negative development within their community.

Forks are bad for the chain being forked from because they splinter technical talent, they splinter brand cohesion, they reflect poorly on project leadership and its ability to provide social cohesion, they dilute market valuation, they splinter the non-technical community, they are brand destructive.

When hasn’t a project been laughed at as it is identified as being the target of in-fighting and the outcome of a fork.

Nothing collectively of the long term good is created by forking. Perhaps in the short term you could argue that forks create value - but its a paper dragon of value that is 99% of the time rapidly diluted down to zero liquidity. Have a look at Ycash, Zcash Classic, PirateCoin for examples.

Zcash hasn’t got the luxury that Bitcoin and Ethereum have. Their brand integrity is industry leading, but the same isn’t true with Zcash yet.

Above, I used the term knee jerk because this fresh new topic about expanding the total supply of Zcash did not exist as a community discussion point just months ago. In a peculiar way, it seems to have been of miraculous conception right there on the stage at Zcon4. Again, i refer to the powers-that-be

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While I appreciate this viewpoint from an academic standpoint, you cant expect a large subset of the community to not push back at a data point that Bitcoin clearly illustrates has worked. I think this is the right question to ask, but you might be asking it at the wrong time, and its clear most are not ready for radical change.

Disagree here – it’s the radical departure (any direction) that rattles confidence.

Strongly agree here, for those brave enough to try something new, we should always allow the choice for anyone to fork.

This is a reflection of what is important to you, but lets not force the community to agree with you. Choice is the magic.

Some strong opinions in this thread, which I think its both important and powerful. Thanks for sharing and caring enough to talk about.

My last thought I’ll share is a small model in nature that I keep coming back to: heard mentality

sometimes it saves you , others it gets you killed. Knowing when to accept and when to not accept the majority takes intelligence + luck and is not easy. Almost like a super complicated differential equation where the initial conditions matter.

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Yes, same. As I strongly believe the total cap shouldn’t be increased, I also believe decreasing it would be equally as unpalatable.

I’m not a fan of making this a proxy for a religion, but it is. Some religions have vanished because they didn’t have the will, or authority, or persuasion to keep their community numbers/ cohesion together. Competing religions and new religions, perhaps even fork religions, taking away prior adherents is not a long term good for the original. This religious metaphor is borrowed from an ex-Zcasher

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Actually, I would argue that it’s exactly before we eventually contemplate to make such change that we should calmly reflect on the hypothesis.

I, for one, do not care about the 21M token limit, for as long as the tokenomics are making sense.

More important to me is that we make sure to keep a portion of mining rewards to fairly compensate those that are making the project stronger in any way. I would donate some of my tokens for this, and I actually do sometimes, but it’s a lot more fair if we all chip in through inflation.

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Dancing the tango with the heard is fun, but exceedingly hard! :fire: :firecracker: More folks should come dance :dancer: :man_dancing:

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I dont like the idea of forks for privately funded projects. ZEC should be trying to add so much value to a) people and b) software code focused on ZEC blockchain that is not transferable that it doesn’t make sense to fork.

But, if that is what is allowed, then do existing ZEC holders get an equal % ownership position in the forked token? So if we own 1% of the fully diluted tokens in ZEC we would also have a 1% position of the fully diluted tokens in any coins related to the fork?

Once the industry grows up, the distinction between sharing and theft is going to be more and more of an issue. Especially when people are privately funding the development. You hear the nightmare stories of developers working on driverless car technology stealing the code and taking it to competitors. According to your view of the world, its not theft. I believe most people believe in reciprocation where I pay you, you give me the software. It is an exchange of value. If you just let people come and take what we paid for (by forking it), it seems like a breach in the concept of reciprocity. So, in this case ZEC holders should own the improvements on the original bitcoin code. I think many in the community try to go through some very impressive mental gymnastics to feel like they are “doing the right thing”, or the ends justify the means. But to me, anything that undermines ZEC holders would be wrong. Now if ZEC holders end up with an equal share of any new tokens fully diluted tokens, then at least some value was returned in exchange for the fork.

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100% agreement, with emphasis

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Bitcoin was created to fight this type of thinking. It’s a slippery slope once you start with inflation. If you believe in inflationary issuance. A stablecoin ends up being the best solution.

One thing we agree on is paying developers. I think a 2% transaction fee should be put in place with a 50 cent floor [edit 50 cents is too high; but my point was a floor] and $25 cap would make sense to pay miners/stakers, developers, and Zcash holders. This is a far superior mechanism than inflation in my view. Its already accepted in the market at 3% to move money around.

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Generally speaking, yes.

So it’s ok that we have used the Bitcoin code to begin with, but it wouldn’t be ok if another project uses the Zcash code to start their own. Talk of mental gymnastics.

Only slight problem is this solution puts the burden on Zcash users. Have you seen where that led, with Bitcoin and to a certain extend, Ethereum? 50 cent may not be a lot for you or me, but it’s not about us, it’s also about the people who earn a few dollars a month.