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Comment by Animats | Hacker News Reader

Another altcoin. This one has a 10% pre-mining cut for the founders:

"Zcash's monetary base will be the same as Bitcoin's — 21 million Zcash currency units (ZEC, or ⓩ) will be mined over time. 10% of that reward will be distributed to the stakeholders in the Zcash Company — founders, investors, employees, and advisors. We call this the “Founders Reward”."

Here's a list of the other 709 altcoins.[1] 373 of them are still tradeable. 88 have a market cap in excess of $1M. 27 have a market cap in excess of $10M. 4 have a market cap in excess of $100M. PayCoin, which was last year's heavily promoted new cool coin with a "guaranteed floor" of $20, is now at position 415 with a value of $0.002606 and a market cap of $30,247.

[1] https://coinmarketcap.com/all/views/all/

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> Another altcoin.

The vast majority of "altcoins" are minor tweaks on Bitcoin and a couple others, they're not at all technically interesting, and I think it's an open secret they're pump-and-dump schemes.

I don't know much about ZCash, but I know it's pretty unfair to dismiss it as "another altcoin". The people behind it are well respected [1][2] and it makes use of novel technology.

1. https://en.wikipedia.org/wiki/Matthew_D._Green

2. https://en.wikipedia.org/wiki/Zooko_Wilcox-O%27Hearn

>I don't know much about ZCash

ZCash has this ability to de-anonymize users through targeted blocks, and is a privately-held U.S.-based company that claims no liability for it's user's actions, meaning if subpoenaed they will [probably] turn over information.

They're also privately cashing in on 20% of all transaction fees.

Just because someone behind a project has credentials you respect doesn't mean we should ignore aspects of the project.

> Just because someone behind a project has credentials you respect doesn't mean we should ignore aspects of the project.

I agree. Good thing that's not what I did.

Regardless of any flaws, there has clearly been a lot of effort put into it by multiple smart people with good intentions (from what I can tell), therefore it is unfair to characterize it as just "another altcoin".

That's the only assertion I made.

But when you look at the characteristics of ZCash, it is just another garden variety alt-coin, despite the credentials of the people behind it.

The privacy in ZCash is information theoretical. There just aren't enough bits in the transaction to identify you.

>There just aren't enough bits in the transaction to identify you.

From the ZCash Whitepaper:

>A powerful attacker could potentially fabricate an additional block solely for a targeted user. Spending any coins with respect to the updated Merkle tree in this “poison-pill” block will uniquely identify the targeted user.

That would only tell you that a given network participant is making a transaction. The inputs, outputs and amounts are all still private.

So what? That is the opposite of anonymous. That's the point.

You do not know anything about the transaction. Not the amount, not the sender. Just that it happened.

"Premined" is not strictly accurate. 1/10 of the mining reward will eventually go toward a wallet controlled by the developers. The rate of the incentive payments starts out high and decreases over time. [1] This is different from a premine or instamine, where the devs begin life with a stash of protocol tokens, which they then have a strong inclination to dump on the market.

Zcash 10% vig is an improvement over instamine or premine. I agree this structure is still not ideal for maximizing zcash value, as it creates an incentive to clone zcash (without the vig). Zcash looks like it will be rather more difficult to clone than, say, Ethereum. But it will certainly be done. I also expect that some of zcash features will be added to other protocols, thus diluting its tech advantage.

No one has figured out how to force everyone to invest in the same version of bitcoin, and perhaps that is as it should be. I still expect the Zcash devs to make out OK.

[1]https://z.cash/blog/funding.html

Did anyone fork or clone Ethereum to cut out the developer's premine? I'd be interested in an Ethereum-like, but only without the politics of forking based on protecting assets of the original developers.

Yes - the forthcoming UBIQ is a fork of eth without premine along with some code improvements. You can read more here: https://bitcointalk.org/index.php?topic=1631210.0

You might be interested in Tezos (https://tezos.com, disclosure: I'm the lead dev), an upcoming distributed ledger and smart-contract platform with a decentralized governance model. It's not a clone of Ethereum, it's a fresh, from scratch implementation of a new protocol in pure OCaml (with the notable exception of a dependency on libsodium).

It's two year in the making and we're hoping to launch in March. Governance is necessary for the maintenance of the commons, but we don't think it should be in the hand of a foundation or a core development team.

I heard about your project via Doug Barnes at a lawyer party, of all places. Very interested in the meta protocol or governance model. A worthy experiment!

Glad to hear, we've been very lucky to have Doug advise us on the project!

For those reading this who don't know him, Doug has an impressive pedigree both as a lawyer and as a technologist / cypherpunk. He was, for instance, to president of "Evil geniuses for a better tomorrow"

https://en.m.wikipedia.org/wiki/Mnet_(peer-to-peer_network)

He now specializes in advising startups and I cannot recommend him enough. http://barneslegal.net/

Yes, there are various clonese, possibly premined by clone devs! I won't mention any b/c I don't want to appear to endorse any.

To my knowledge, ETHC maintained chain of title with original ETH up to the fork. However, the DAO exploits may have transferred some of the premine to the team that worked the exploit, to the extent any of the devs invested in the ill-fated DAO.

> Another altcoin. This one has a 10% pre-mining cut for the founders

The way the "10%" is done is that it's really 20% for the first 4 years then 0%. Given the past history of premined altcoins I wouldn't weigh the odds that this specific system really lasting more than 4 years out especially high.

Never fear, I liquidated my entire 401k and put it into dogecoin, 5.56 ammunition and canned lard.

I heard that lego bricks are a better investment. No joke.

http://www.telegraph.co.uk/investing/shares/lego-a-better-in...

Laughed until I read 'canned lard' then I knew you were serious. I too dropped luxury. highfive

Such balls. Much chest hair. Amaze.

Yup, it's a clever idea, but wait for someone to be the Litecoin to their Tenebrix.

Given how complicated the technology is that they will be working with (as someone who has attempted to read the zcash whitepaper), I find this extremely unlikely. Sure there will be clones, but no altcoin "developer" will be able to properly maintain this, so bugs won't get fixed, or it'll always be lagging behind Zcash, or worse, they introduce unintentional bugs and completely wreck their blockchain and lose the money of the few fools who thought that the developers/company running it getting some money is bad

a/ It's naive to assume market won't work in this one case and people will happily pass ten percent of their money to support staff just because their work is important. What can be competed away will be competed away.

b/ Open source works well for very complicated pieces of software.

c/ As we saw in the case of Ethereum, assuming you can buy due diligence with money alone is a mistake.

Open source works well for very complicated pieces of software, except for complicated cryptography; the material used in ZCash was developed in papers as recent as 4 yrs ago. Rest assured that most programmers understand nothing about the underlying SNARKs.

You are underestimating passionate and very smart people.

I am not underestimating anyone; even within theoretical cryptography, SNARKs are understood by a handful of people.

I am a cofounder of a company in this space and three people in my company are in a position to understand it very well. For example Sergio who also blogs here: https://bitslog.wordpress.com

Sergio's a great guy, but he does NOT understand the mechanics behind SNARKS "very well". You're overestimating his grasp of the moon-math in SNARKS.

I don't see anything there about zkSNARKs?

Sorry to get it personal but it seems you are very shortsighted and need to see a specific keyword to understand the capabilities of the people.

Please let me know what specific topic of zkSNARK you find challenging to explain and we can write a blog post about it.

Here are the topics I'd be happy to hear blog posts about

a) the mechanics of the proof generation, including outlining the time for proof generation.

b) How the trusted setup works; for extra credit describe in detail how zcash plans to do it.

c) an ELI5 explanation of zkSNARKS

d) a comparison of the Ben-sasson and Parno implementations.

Your request was routed internally and we hope to have an article in ~1 month.

Off topic, I'd actually be very interested in a cryptographer's guide to zkSNARK...

I don't want to see a specific keyword; all I'm saying is that there is nothing on that website indicating any great knowledge of theoretical cryptography. For instance: no proofs, formal definitions, nothing. Not even links to other websites hosting such things.

I really feel frustrated by your lack of search/manual-crawling/link-clicking/understanding capabilities. He was the official security reviewer of Bitcoin and Ethereum. Then some extra references so you can continue your own search:

- "MPF (Mental Poker Framework): A new family of practical and secure Mental Poker protocols" http://www.dc.uba.ar/inv/tesis/licenciatura/2010/lerner

- MAVEPAY: a new lightweight payment scheme for peer to peer currency networks: https://bitslog.files.wordpress.com/2012/04/mavepay1.pdf

- Strict Memory Hard Hashing Functions: http://www.hashcash.org/papers/memohash.pdf referenced in the Ethereum original paper: http://gavwood.com/paper.pdf

I am not doubting Sergio's security expertise, but security expertise != theoretical cryptography expertise. Crypto requires providing clear definitions and proofs of security. All I see in the first two links are adhoc constructions, with heuristic arguments for security; no security definitions, no reductions, no proofs.

The last link is more formal, and talks about models of computation, but once again does not provide any reductions.

Are you part of the Zcash team?

The Zcash additions are significantly less complex than the Bitcoin system overall especially once accepting the ZKP as a tidy black box with clear boundaries.

I wouldn't be so sure of that, there already exist some alternatives which seem better in some ways like Monero. I have very low trust for scam developers like the ZCash ones, I'm sure someone quite capable could take it up.

The people behind ZCash are definitely not "scammers"; they're respected computer scientists and applied cryptography engineers.

They may have some flashy names, but there's no truely provable reason to believe they're better than the fly-by-night guys who pop up on bitcoinforums with a new altcoin and dump it as soon as it's up and running.

Since there's no cryptographically provable way to know they won't do this, well, we have to assume it's what they'll do. Distrust is the basis for cryptocurrencies afterall.

Unlike those fly-by-night guys, these people have their reputations at stake; they've have not only their names associated with this project, but also their academic careers.

Moreover, having worked with some of them, I can assure they're not shady no-gooders...

There's no truly provable reason to believe anyone isn't a scammer. Many supposedly reputable people in the finance industry are eventually revealed to be scammers. It's unavoidable.

But these guys are much less likely to be scammers than the typical no-name GitHub/Twitter/Bitcoinforums accounts promoting a new revolutionary coin.

Part of the reason for their share of the mining reward is to give them a strong economic incentive to stick with it for at least four years.

So the developers are scammers because you use an alternative?

'scam developers'? A bit harsh isn't it?

They're running a pump and dump, sure, they made it rate limited, but a delayed pump and dump is still a pump and dump.

A pump and dump that was started at John Hopkins and been being worked on for three years? Wat?

I went to a talk at Stanford by Eran Tromer on Wednesday, in which he described some of the theory behind Zcash. He made a lot of very strong claims about his new approach to computer security. There was a lot of hand-waving. I don't understand exactly what he's claiming, and what he claims to have proved. You can watch the video yourself and try to figure it out.[1]

Tromer's paper [2] may be helpful. At least there, the references are cited and findable. Tromer's first result deals with collision-resistant hash functions. That's been a big headache in practice. It's really hard to develop a cryptographic hash function for which someone can't create two strings that result in the same hash.[3] MD4 and MD5 have been broken, SHA-1 has been partially broken, and SHA-256 hasn't been (publicly) broken yet. Tromer seems to claiming that he has a solution to weak hash functions. But it's really hard to tell from his writing.

Anybody really understand this?

[1] http://web.stanford.edu/class/ee380/ [2] http://www.cs.tau.ac.il/~tromer/papers/huntingsnark-20140724... [3] https://www.cs.cornell.edu/courses/cs6830/2009fa/scribes/lec...

I don't disagree with your general point but PayCoin was a straight up scam, created by scammers. Not a fair comparison.

I don't see how it's arguable for a currency to have a 10% cut for the founders. That's too high.

Alt-coin founders are still into the whole deflationary thing I see.

What's the problem with that? It seems to be working so far.

It incentivizes hoarding over spending, especially in the face of an expanding economy.

Though to be fair, the rate at which new cryptocurrency pools are being created seems to more than keep up with the growth of the economy. Who needs the government to print money when anybody can?

> it incentivizes hoarding over spending, especially in the face of an expanding economy.

That kind of macroeconomic analysis assumes that everybody already owns some amount of the currency.

However in the new currency markets that are developing, you have to consider the incentive to even start accepting a currency.

One that loses value over time is not attractive to the recipient.

>One that loses value over time is not attractive to the recipient.

Correction: One that changes value over time is not attractive to the recipient.

You can shine the deflationary currency as much as you'd like, but economists have a consensus on why the volatile behavior of set-supply currencies are inferior.

It's precisely why the world's major currencies don't use the gold standard, but honestly, this conversation repeats itself almost every time a deflationary cryptocurrency gets posted.

Sure, pyramid schemes are a great way to drum up interest.

How about stability and liquidity instead? The more readily exchangeable a unit of currency is for goods, the easier it will see adoption. Deflationary currencies, due to their incentivization of hoarding, tend to be both unstable and illiquid, driving away anyone but speculators.

Working for whom? It certainly works the best for those that mine early (aka the founders)

There's Freicoin.

The whole electronics market is deflationary, and it's doing just fine.

I don't see anyone seriously suggesting to use electronics as a trade medium.

nah ach, swift, amex, visa, mastercard, unionpay, ebay, paypal, venmo, facebook, wechat; wont ever catch on

It's the internet vs. intranets all over again. People have too much stock invested in "bitcoin is fundamentally flawed" and before that it was "bitcoin is a scam". Now it's "a different bitcoin is the answer".

EDIT: Time and again getting downvotes because of HN's cognitive dissonance. Pathetic low-tier reddit run-off is entering HN's market share.

I really hope for some success from Interledger[1] and the Web Payments Community Group at W3C[2] to start bridging the gap and letting people exchange money (directly) with whatever currencies they want.

[1] https://interledger.org/

[2] https://web-payments.org/

   letting people exchange money (directly) with whatever currencies they want

If you had any idea the amount of regulation and ridiculousness involved in banking and forex, you'd laugh at this statement.

Or it's like Gulden (NLG) [0] which went times 30 over the last months. Currently they are installing terminals in parts of the Netherlands, some in Taxis.

Edit: This altcoin also seems to provide anonymity [1]

[0] https://bittrex.com/Market/Index?MarketName=BTC-NLG

[1] https://shadowproject.io/en

I'm Dutch, consider myself well-informed and well-read, but I've never heard of this project before. To be honest, it sounds like another cryptocoin pyramid scheme. On their website this altcoin is presented as an investment opportunity where the value of the coins you own increases with the number of users.

> The value of Gulden is determined by the demand for Gulden, as with gold or silver. The price can go up or down, but on average the value of Gulden goes up.

Sure. It will only go up. Just like all the other altcoins.

There is something that irks me about the name of this project. Gulden is the name of the Dutch currency used before the introduction of the Euro. At this point in time it has strong historical connotations (obviously), but it is also a symbol of adherents of the nationalistic political (far) right in the Netherlands. There are plenty of people from the lower socio-economic classes who fuelled by demagogues who believe we should revert to the Gulden (the actual currency, not this altcoin), close our borders, get out of the EU and once again prosper (even though we are already doing pretty well all things considered, and the EU benefits us on the whole, despite all its warts).

Choosing Gulden as a name for this project seems to explicitly place it at the heart of that particular bit of discontent. It also feels extremely pretentious to use the name of our historic currency that anyone over the age of twenty actually used. This I can grok from a commercial standpoint, but it leaves a nasty taste.

Apart from you associating wanting back the old Gulden and leaving the EU with being part of a lower-economic class, which it find extremely elitist, condescending and it annoys me greatly...

Gulden is used for actual value transfer that is easier than currently possible between banks, I can just transfer value to you by scanning your QR code. As such there is value in this method. Moreover I can not only transfer value to you but also to shop holders and taxi drivers around Groningen, this is due to human labor by the company behind Gulden. Gulden was trending in the iOS store a couple of days ago by the way, so many people have heard of it, even internationally.

The name YouTube also refers to old CRTs, perhaps indeed to evoke a certain feeling. Who cares.

I understand your annoyance about the class statement, but demographically speaking I'm not far off the mark. Appearances aside, marketeers don't choose names at random. There is a thought-through business plan behind this that specifically targets a certain demographic — I contend that a good part of the group targeted here can often ill-afford to invest their savings in something as ethereal as an altcoin (which is what they are suggesting on the Gulden website).

> Gulden is used for actual value transfer […]

I can see some of the benefits touted, but for most of those situations cash or our excellent system of debit cards and POS-terminals already do this, and transferring money via IBAN is peanuts (and free within most EU countries). But convenience aside, cash works without a smartphone and middlemen. It's mostly anonymous too.

Besides, I get that companies are vying for the position of the one digital money transfer 'app' here in the Netherlands, because whoever manages to do that is in for a very profitable ride (like that one similar app popular in Sweden), but linking it to their own altcoin seems like a way to propagate a pyramid scheme by means of an app some will find useful.

Already down 50% from the peak one week ago.

Sure it's volatile but there are truly innovating companies. Gulden for example can transfer directly to iban accounts. You can also directly get Euros from them on their own website. Shops are starting to accept Gulden locally. These are the projects to follow.

What's the point behind Gulden, though? Why do I need a cryptocurrency for anything they're doing? Do they allow anonymous gulden -> IBAN transfers? If yes, that'd be a unique feature but also one that has obvious potential for misuse and might not go down well with financial institutions and regulators.

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