My regular readers or twitter followers may have noticed that besides data center topics, I talk about cryptocurrencies from time to time. I’ve written a beginner’s introduction about zCash mining earlier in 2017, and would now like to talk about Zencash, a very new cryptocurrency that went live on 30-May-17. The network is at its early beginnings, and developers have worked very hard these last day to make sure any launch issues were ironed out.
I somehow naively believe Zencash has the power (at least on paper) to become a massive game-changer in tomorrow’s digital societies. Here’s therefore some cryptocurrency oriented content while I plan to resume with my much more traditional data center and storage related topics. Crypto oriented folks might also be pleased to know that I plan to write a review of the Trezor hardware wallet soon.
Zencash: A brief introduction
Some history to begin. Zencash is a fork of Zclassic, which is itself a fork of zCash. What the fork, you’ll tell me – or rather, why this succession of forks? zCash was launched as a commercial venture with a registered company that leads the development, and investors that have a stake in the zCash company. The business model of the zCash company was to start without ICO or premine, but to finance itself through a 20% stake on every single ZEC (1 ZEC = 1 zCash, the monetary unit of that cryptocurrency). Some individuals in the community decided for whatever reason that this model was not up to their convenience and wanted to work on an alternate version of zCash that would remove the 20% reward to the founders/developers: zClassic was born.
Now the community of individuals and developers working around zClassic certainly had a grander vision of things for the future. While zCash, thanks to its zk-SNARK based zero-knowledge proof would allow the creation of shielded transactions (validated through a complex algorithm while shielding their effective value, senders and receivers) the zClassic developers wanted to palliate to some of the items that were lacking in zCash, such a domain fronting for example (a way of masquerading the Zencash distributed network behind innocuous CDNs – content delivery networks). Why masquerading? A lot of cryptocurrencies have at their core the philosophy of every human’s right to privacy and the fight against injustice, oppression and discrimination.
How I found Zen in Zencash
First of all, I became aware of that project while doing research about cryptocurrencies related to the equihash algorithm (the same one as used by zCash and zClassic, which heavily relies on GPU power). When doing so, I came aware about Zencash and started following the project.
Secondly, in April there was a sharp increase in the price of ZEC. With that increase, a lot of miners switched their hashing power from other altcoins (altcoin=any cryptocurrency that is not bitcoin, the “mother of all coins”) to zCash, thus causing an increase in hashing power across the network which resulted in more competition and diminished returns. At that point, I decided to switch to ZClassic (ZCL) mining. Even though the training pair was approx 10 ZCL for 1 ZEC at that time, it turns out that -at these rates- mining ZCL would turn out to be similarly profitable. Obviously, that was just a reason to get interested, as exchange rates are very dynamic and just as sensitive to events as real world markets.
Finally, as I got more involved into learning about Zencash, I found out that while there would be no premine or ICO, the fork from ZClassic wouldn’t be purely from a source code perspective. The developers team decided to freeze the ZCL blockchain at the 100,000th block, make a copy of it, and use that as a kind of « genesis block » for the Zencash blockchain (the block # was later revised at 110,000th and the fork has happened around the 17-18th May 2017). What made this approach interesting for many stakeholders was the fact that anyone who held ZCL in their wallet up to block 110,000th would automatically be credited the same amount of Zencash without losing their investment in ZCL. This drove prices and demand up until before the fork. Prices for ZCL have dropped well now, but they might return to normal soon, as there is yet another project to fork ZCL later for the creation a contract-based cryptocurrency based on ZCL code and blockchain.
From a community perspective, besides being active on the zCash forums (where I started after all) I can also be found lurking around on the Zencash slack channel where I try to help when I can, as well as sharing my opinion on things.
The Zencash philosophy
So, I got interested in Zencash and will get credited with some Zencash up from the start, but what’s next, an why is that appealing?
The Zencash philosophy, or rather the way it is described in their white paper, is what convinced me to go beyond. I strongly recommend you to read it. I had the opportunity to review and propose multiple amendments to the French translation of the white paper, so I had to go through it thoroughly for the sake of that exercise. The Zencash philosophy would be close (if were were to sum it, even imprecisely) to anarcho-libertarianism. It promotes human values as well as the rights of individuals, regardless of their beliefs, skin colour and political regime under which they are governed.
Zencash is seen as an evolving open system where stakeholders can influence development through the establishment of one or more competing DAOs (Decentralized Autonomous Organizations, sort of steering committees) with voting rights. Although the creators of Zencash have an idea where to go first, the possibilities are unseen at this stage and will evolve like a living organism, hopefully for the best.
There might be a certain level of utopia in the white paper, which can be taken as a manifesto written by the developers, yet I’m a firm believer that a bit of utopia is necessary in life otherwise we would live a boring life, resigned to accept our fate and the immutability of the human condition.
There’s really a lot behind Zencash and retracing the white paper section by section would be a daunting task. The white paper is extremely interesting because it is a blend of affirmations (the “manifesto part”), of technical information (the way the network is set up, the technology behind Zencash, the scientific aspects, how currency will be distributed, which protocols will be used for communication etc.) and finally a dose of politics and socio-economics as the white paper explores collaboration and competition alike.
Max’s Opinion
I for one believe that cryptocurrencies are a universe yet to be explored by humanity. Their application seems to be bound only by imagination. Time will tell if folks like me who have believed in this emerging technology have been just fools like those who experienced the Dutch Tulip Crisis some centuries ago, or precursors and visionaries at the dawn of a new digital era.