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zooko
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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 9:48 pm

Hello Braille. Thank you for the question!
What's the current status of the trusted setup necessary to boot the thing? Have your crypto wizards come up with some secure multiparty computation scheme or are we just going to have to trust you?
Our crypto wizards have come up with some secure multiparty computation scheme.

The implementation and execution of that scheme remains to be done. The requirement of that effort is that you do not have to trust us.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 10:10 pm

I'm still trying to figure all of this out, but other than anonymity, what makes zcash so much different than bitcoin, or for that matter, any of these other altcoins that have quite a few services and applications to offer users?

Also, is the mining algo sha256? I don't think that was clearly stated anywhere.

zooko
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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 10:18 pm

Hiya, Henry! Thank you for the questions.
* I'd love to see a simpler example of ZK-proofs to get the idea.
Thanks for the suggestion! At some point, we're going to write a blog post or article trying to do just this.

In the meantime, have you seen Matt Green's Zero Knowledge Proofs: An illustrated primer?
I don't understand how they protect from double spending right now.
Here's a way to start getting the intuition of that: every "note" ("coin", "bucket of money", whatever you call it) in the Zcash system has a unique "serial number" that is determined by a secure hash of the note, so you can't change the serial number, and when you spend that note, you have to publicly reveal the serial number, and the miners will reject the transaction if that serial number has previously been spent. Easy! But wait, how do the miners know that the serial number that you publicly revealed is actually cryptographically bound to the note (i.e. it's a secure hash of some other parts of the note), instead of just a random serial number that you just made up? That's where the zero-knowledge proof comes in: to prove to the miners and full-nodes that the serial number you are revealing really is the secure hash of something else without revealing that something else to them.
* How far are you from choosing your Proof-of-* scheme?
We've studied quite a few proof-of-work functions. Fortunately other researchers have also been studying them recently and publishing their results, e.g. https://password-hashing.net/, https://eprint.iacr.org/2015/946, https://github.com/tromp/cuckoo/blob/ma ... f?raw=true, https://github.com/ethereum/wiki/wiki/Ethash.

The next step is to write down and publish our requirements and desiderata.
I heard your team is quite fond of what Etherum is doing.
The Ethereum project hired us to review Ethash as part of their programme of hiring external security auditors. We reviewed it and didn't find any major flaws in it. Here's our blog post about that process and our results: https://leastauthority.com/blog/least_a ... ereum.html

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 10:28 pm

I have been waiting for Zerocash now Zcash to launch for a few years now. Very exciting project.

My question:

We are due to start releasing details of a blockchain conference in the financial district of London, England, to coincide with the Bitcoin block halving. Would you come to the event and be a speaker and join one of the main panels?

Some details, which are due an update next week:

Blockchain2020

zooko
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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 10:33 pm

Hello Justin. Thank you for your question!
Premines are usually not seen in the brightest light. The issuance model in my opinion is very important and to think 10% of a new currency will automatically be dived up seems ludicrous. This was one of the biggest problems when people get into ethereum. It seems like you're dead set on a premine because of your investors. Have any thoughts to at the very least since you are set on a premine to set aside some small percentage of rewards in the way CLAM did for bitcoin users?
I think you're right that there is a lot of well-justified suspicion out there, due to a long-running parade of scams and failures. I'm hoping to allay suspicion by being transparent so that people can know in advance what they are getting into.

By the way, I don't agree that what we're doing with the Zcash Founders Reward is a premine. It's not pre! (Also it isn't mining.) But the part about it not being pre seems really important to me, because it means that anybody who can run a Zcash miner (which, I hope, will be almost anybody on the Internet) can have access to Zcash currency no later than the founders do.

As I described on my blog post about "the Zcash Founders Reward", this seems to align incentives in everyone's best interest.

Please let me know if you still disagree.

By the way, in the two examples you gave, Ethereum did have a premine, in the form of a pre-sale/crowd-fund/initial-coin-offering, and CLAM had an airdrop for Bitcoin users and others. But, Ethereum is (so far) a success, and CLAM is a failure! So, the two examples you gave seem to indicate that people will accept different distribution schemes, or perhaps what it shows is that other factors than the distribution scheme determine success or failure.

By the way, I love Ethereum! I am incredibly impressed that the Ethereum team pulled off such an ambitious technical feat as well as they did. That's one of the reasons I put Vitalik Buterin on the Zcash Technical Advisory Board.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 10:42 pm

Hello, thanks for the questions.
I'm still trying to figure all of this out, but other than anonymity, what makes zcash so much different than bitcoin, or for that matter, any of these other altcoins that have quite a few services and applications to offer users?
The reason to make Zcash is privacy and fungibility. I think that's important. I wrote more on my initial blog post about my motivations.

The main difference between Zcash and Bitcoin is the addition of the ability to make transactions privately, with selective transparency (where you can reveal the transaction to selected parties without revealing to everyone).
Also, is the mining algo sha256? I don't think that was clearly stated anywhere.
The current testnet is unchanged from Bitcoin with regard to mining. As discussed elsewhere on this thread, we're planning to change the algorithm.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 10:52 pm

Is there a reason you choose not to consult with any economics professors?

Why do you believe this cryptocurrency will survive without a fixed inflation rate after the initial mining (first several years)?

Or is this planned and hidden in the code because you fear people will think the coin is worthless if there is no upper bound on the number of coins?

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 11:00 pm

Hi! Thank you very much for the encouragement!
Would you come to the event and be a speaker and join one of the main panels?
I'd definitely consider it! I need to visit London again anyway. ☺ Please email me!

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 11:08 pm

Hello, Sc00bz. Thanks for the questions.
Is there a reason you choose not to consult with any economics professors?
How do you know I didn't? ☺
Why do you believe this cryptocurrency will survive without a fixed inflation rate after the initial mining (first several years)?
Well, just like in Bitcoin, the mining reward keeps coming for a long time. See the diagram on https://z.cash/blog/funding.html. There will still be Zcash mining reward for decades. Now, after that reward has diminished so much that it isn't valuable, I hope that transaction fees will have risen to remunerate miners.
Or is this planned and hidden in the code because you fear people will think the coin is worthless if there is no upper bound on the number of coins?
The code is all public, so you can check yourself or ask someone you trust to check. That part of the code is currently identical to Bitcoin core 0.11.2, which the current version of Zcash is based off of.

zooko
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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 11:09 pm

I WON. I won my first AMA! I answered all the questions.

And I really do have to go do something else now. Thank you all so much for your questions. Please join the Zcash forum! We can use all the help we can get.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 11:10 pm

Completely ignored my question at the bottom of Page 1

zooko
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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 11:24 pm

Completely ignored my question at the bottom of Page 1
WTF. I wrote a whole answer to that. Maybe it disappeared when the coffeeshop wifi here flaked and I didn't notice that my "Submit" failed? BRB…

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 01, 2016 11:31 pm

Is there a reason you choose not to consult with any economics professors?
How do you know I didn't? ☺
https://z.cash/team.html
Why do you believe this cryptocurrency will survive without a fixed inflation rate after the initial mining (first several years)?
Well, just like in Bitcoin, the mining reward keeps coming for a long time. See the diagram on https://z.cash/blog/funding.html. There will still be Zcash mining reward for decades. Now, after that reward has diminished so much that it isn't valuable, I hope that transaction fees will have risen to remunerate miners.
This is where we differ you hope it will and I fear it won't.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 12:52 am

Hello Braille. Thank you for the question!
What's the current status of the trusted setup necessary to boot the thing? Have your crypto wizards come up with some secure multiparty computation scheme or are we just going to have to trust you?
Our crypto wizards have come up with some secure multiparty computation scheme.

The implementation and execution of that scheme remains to be done. The requirement of that effort is that you do not have to trust us.
The is simply not true, you have to trust that one of the guys from the initial setup is honest. This doesn't mean you do not have to trust you guys at all, which you stated. This is certainly an improvement over the previous setup, but it still isn't trustless. If all the guys of the initial setup collaborate, they could, for instance, still create additional coins and no one would notice.

Since the initial setup will most likely be videostreamed, the names (or at least the faces) of the people at the initial setup will be known. Tell me, what stops a three letter agency from demanding the initial setup guys to collaborate?

One of your engineers (Sean Bowe) acknowledged this (that the setup isn't trustless) as well in an earlier discussion I had with him.

Bottom line is that the initial setup isn't trustless, whereas you are implying it is. This also might be fooling the people that are reading this thread and your answers, thinking the setup is trustless.

I stand corrected if you meant something else with your post.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 1:16 am

(I wrote a reply to this the first time but somehow lost it, so here I am rewriting it from memory.)

Hi loonix: thanks for your questions!
Does Zcash enhance any of the offerings via Monero?
I don't know that much about Monero, although I've heard good things about it and I've had a few conversations with some of the people behind it.
How does Blocksize come into the picture and what about transaction fees and mining incentives post emission of majority of coins.
We're still thinking about our plan for Blocksize, scalability, transaction fees, and mining incentives. We'll post as soon as we have a concrete proposal. Our current not-at-all-concrete thinking is to follow Bitcoin and learn from the experience of Bitcoin, and to help if we can. By the time we're ready to launch Zcash 1.0, Bitcoin will probably have deployed:

* segwit, and
* larger block sizes, and
* Lightning Network

In addition Bitcoin might deploy other relevant scalability improvements as well. Or, maybe by the time we Zcashers get to that stage, we Bitcoiners will have decided not to deploy some of those mechanisms, or maybe we'll have tried to deploy some of them and learned that they didn't work as well as we hoped.

In any case, our general thinking for Zcash scalability is to re-use ideas and source code from Bitcoin as much as possible.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 5:49 am

Hello shelby3! Thanks for the questions.
Zooko, thank you for the responses.
I'm interested in reading your goals and motivations for taking on anonymity in general or anonymous digital cash specifically as your priority project?
I care deeply about personal privacy, personal and organizational security, and about the decentralization and sharing of power.

At this critical stage of human history we need a permissive environment where we can perform many experiments and make different kinds of mistakes, and fortunately we have that, in the Internet. The Internet has enabled many wonderful experiments. Bitcoin is one of the most wonderful of them. Zcash is another.

I wrote more about this on my introductory blog post for the Zcash project: https://z.cash/blog/helloworld.html
I agree. But the details of how we (society, hackers, etc) accomplish the goal is where we may differ on some facets. Please understand though that I respect (am in awe of) the technical excellence of your dream team. Zk-snarks are extremely interesting and I hope to one day understand them from first principles which is why I started the thread Layman's Journey to Understanding Zerocash. Far exceeds my limited academic knowledge set. My criticisms pertain to areas of my study/experience where I may possess some insight that your team lacks or let's say where your awesome mathematicians may have a blind spot due to their other focus and experience. Academics often lack real world experience in business, marketing, etc.. because they are too busy (focused) on being really expert in their area of study.
Haven't you seen the new laws coming (eventually in all Five Eyes countries I've heard from reliable sources) that will ban end-to-end encryption?
Yes, I have. I have followed that kind of development pretty closely for a long time. Since the original "Crypto Wars" in the 1990's, in fact.
I was only vaguely aware of Zimmerman and PGP because from the mid-1980s to 2003, I was involved as a programmer and entreprenuerial software ventures in the desktop publishing and digital graphic artists revolution. I didn't really catch on until 9/11/2001 when something seemed odd to me (as an engineer) about a steel girder building (that was never struck by an airplane) free falling perfectly into its own footprint. Digging down into that rabbit hole further which leads into geo-political realities (and Martin Armstrong's terse Tedx talk can be quite illuminating), one should realize what they are up against and position their marketing strategy and business model to realistic aims.
To that end do you expect to support a viewkey or other way that users individually or a global backdoor, so that Zcash can be compliant…
In Zcash, the creator of each individual transaction gets complete control over who can view the contents of the transaction. This is accomplished by each transaction being individually encrypted by an encryption key known only to the creator and the recipient.

There is no other mechanism by which any party can gain the ability to view the contents of transactions other than getting the decryption key from the creator or the recipient of the transaction, or from someone else who has previously received the decryption key. This is a simple, implementable, secure, and understandable mechanism for controlling who can see what. We call it "selective transparency".

Does that answer your question?
Yes partially it does, but it leads into what I believe is a political-economic flaw in your strategy for anonymity. I will be elaborating on this in a subsequent post as well.

In other words, you are confirming that each private key holder determines whether to reveal the decryption key to others. Is the decryption key only a view key or can it also be used to sign a double-spend? This is important because a corporation for example may want to allow auditing (even comply with a government regulation to supply a view key) without losing control over the sanctity of their spending.

It seems to me you are of the opinion that individuals should be able to snub the government's intrusive snooping policies. But this means that Zcash's protocol can become banned by hosts. So you are basically deciding that users will need to run their own full nodes from home-based ISPs, but I will explain in a subsequent post that it is impossible to scale and maintain such decentralization. I have studied this issue in great detail. The CAP theorem is fundamental.

Thus I think you need to think about a global view key for the Zcash mixer that can be supplied to the government. Otherwise the goverment will eventually outlaw the entire protocol. And users standing up full nodes will centralize to hosted servers as any consensus system scales, thus the government will be able to outlaw it.

The was the insoluble technical dilemma that caused me to realize I had to change my strategy from a renegade to a political-economic means of resistance.

I see excellent markets for your technology for use by corporations who need privacy on public block chains. But privacy from the government is impossible until the masses will wake up and tell the government to stop snooping. That will not happen until some decade or more from now, because the masses are apathetic to this issue and this will not change until after they suffer totalitarianism thus the fight ahead will be political-economic, not purely technological.

Corporations are real near-term market for zk-snarks and even hopefully zk-snark smart contracts in the future, not just crypto currency.

I urge you again to get your marketing and business model strategy more focused on what is realistic in the current political and social environment. Any way, that is my 25 cents feedback.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 6:04 am

I heard your team is quite fond of what Etherum is doing.
The Ethereum project hired us to review Ethash as part of their programme of hiring external security auditors. We reviewed it and didn't find any major flaws in it. Here's our blog post about that process and our results: https://leastauthority.com/blog/least_a ... ereum.html
I had reviewed an early version of Vitalik's Ethash privately for Charles (one of the Ethereum founders) and told him it was vulnerable to parallelization, thus not a CPU-only hash. I see your Least Authority concluded the same.

Unfortunately your Least Authority team missed the fundamental insoluble flaw in the gas model that Ethereum never solved! You all wrote about the fact that all verifiers incur all costs, but you didn't conclude that this means those miners with a higher percentage of the system proof-of-work hashrate, will thus have lower verification costs and thus will be more profitable. Thus you didn't point out that this economically converges to centralization of mining because those with more hashrate are more profitable and thus can purchase more hardware to increase their hashrate faster than others!
* How far are you from choosing your Proof-of-* scheme?
We've studied quite a few proof-of-work functions. Fortunately other researchers have also been studying them recently and publishing their results, e.g. https://password-hashing.net/, https://eprint.iacr.org/2015/946, https://github.com/tromp/cuckoo/blob/ma ... f?raw=true, https://github.com/ethereum/wiki/wiki/Ethash.

The next step is to write down and publish our requirements and desiderata.
3. Can you give us some details about mining-algo and so?
In the current testnet it is unchanged from Bitcoin, but we plan to change it before launching the real blockchain. I'm planning to choose a memory-oriented Proof-of-Work, and a RAM-oriented one instead of GPU-oriented one, if we can find one that fits into all of our security and engineering requirements.

A delightful idea would be to make it possible for cell-phones to be miners, so that a billion people all around the globe would have an equal ability to run a miner. There are a lot of reasons that might prove impossible, but it is worth thinking about!
I have been working on these issues.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 7:33 am

Hi Zooko

So there is a large following of Monero(XMR) at the moment with respect to digital private currency with a lot of research and publications backing the initial well received CryptoNote whitepaper. It has the added benefit of being a completely different codebase than Bitcoin and also uses adaptive blocksizes (one of the core Bitcoin issues) and an elegant emission that will also ensure network security after a majority of coins have been mined.
I have shown that the math for Monero's adaptive block size is flawed and thus does not solve the Tragedy of the Commons economic dilemma for mining. Also I have explained that Monero's tail emission has no impact on security, but rather the only purpose can be to replace lost coins so the money supply doesn't trend asymptotically to 0 (also I also pointed out that due to orders-of-magnitude of divisibility of coins, then the money supply will never practically reach 0 even without a tail emission).
Does Zcash enhance any of the offerings via Monero?
In the "Zcash VS Bytecoin" thread on the Zcash forum, ebfull wrote they will have a blog post on this issue soon. I have a post in that thread with links to my very detailed analysis of Zcash vs. Cryptonote/RingCT w.r.t. to anonymity and meta-data. I eagerly await Zcash's blog post on this issue.

Edit: Cryptonote does have a per transaction view key. It is not clear to me yet if Zcash does. Cryptonote doesn't depend on a trusted setup (note this only impacts money supply and not anonymity in Zcash, whereas I argue that Cryptonote/RingCT has inferior anonymity due to meta-data correlation).
How does Blocksize come into the picture and what about transaction fees and mining incentives post emission of majority of coins.
Again I have shown that Monero has made no innovations in this area, even though they claim they have.
Last edited by shelby3 on Tue Feb 02, 2016 9:42 am, edited 4 times in total.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 8:08 am

We're still thinking about our plan for Blocksize, scalability, transaction fees, and mining incentives.
You appear to be somewhat naive w.r.t. to crypto currency realities (e.g. upthread you weren't even aware that Blockchain's sidechains are fundamentally flawed due to chain reorganizations and the fact that the longest-chain rule is only probabilistic) and have a lot of study to do to catch up on the reality of the crypto currency technologies, economics and ecosystem issues.

Your quoted strategy is unfortunate since Bitcoin is broken w.r.t. to decentralized scalability and can't be fixed. It is an insoluble problem for Bitcoin due to vested interests.

Didn't you see the discussion between smooth and myself wherein I showed mathematically that the Chinese mining cartel (with an estimated 67% of the system proof-of-work hashrate) is lying about the Great Firewall of China forcing their stance on the block size increase issue. Thus we can conclude that the Chinese mining cartel had other motivations for 51% attacking Bitcoin when they vetoed significantly larger block sizes (see my linked discussion for the likely motivation they have). Yes Bitcoin has already been 51% attacked.

We are being lied to by all vested interests...
We'll post as soon as we have a concrete proposal. Our current not-at-all-concrete thinking is to follow Bitcoin and learn from the experience of Bitcoin, and to help if we can. By the time we're ready to launch Zcash 1.0, Bitcoin will probably have deployed:

* segwit, and
Segregated Witness is a Trojan Horse to enable Blockstream to take control over the Bitcoin protocol via versioning. I explained logically why it can't serve any other purpose.

Blockstream's vested interests combined with those of the Chinese mining cartel and others, will prevent Bitcoin from adapting in any ideologically correct way. Bitcoin will be captured by whom has the most power in the system, or it will devolve to chaos. Mark my work. And remember I wrote in 2013 that the block chain size was the Tragedy of the Commons issue.
* larger block sizes, and
* Lightning Network
LN requires huge garbage collection spikes in network load and block sizes so it really isn't a scaling solution. Also it doesn't allow any payer to spend to any payee. It isn't End-to-End principled.

Thus it is not a solution for instant transactions nor scaling.
In addition Bitcoin might deploy other relevant scalability improvements as well. Or, maybe by the time we Zcashers get to that stage, we Bitcoiners will have decided not to deploy some of those mechanisms, or maybe we'll have tried to deploy some of them and learned that they didn't work as well as we hoped.

In any case, our general thinking for Zcash scalability is to re-use ideas and source code from Bitcoin as much as possible.
You apparently don't know yet who you should have on your team. But hopefully these posts are giving you a hint.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 10:11 am

Premines are usually not seen in the brightest light. The issuance model in my opinion is very important and to think 10% of a new currency will automatically be dived up seems ludicrous. This was one of the biggest problems when people get into ethereum. It seems like you're dead set on a premine because of your investors. Have any thoughts to at the very least since you are set on a premine to set aside some small percentage of rewards in the way CLAM did for bitcoin users?
[...]

By the way, I don't agree that what we're doing with the Zcash Founders Reward is a premine. It's not pre! (Also it isn't mining.) But the part about it not being pre seems really important to me, because it means that anybody who can run a Zcash miner (which, I hope, will be almost anybody on the Internet) can have access to Zcash currency no later than the founders do.
I have argued that every crypto coin has been a premine because:
  1. in ICOs only those who buy at inception, get any at favorable prices. in PoW, only the miners get any, and most people in the world can't mine. In fact, very quickly mining is dominated by mining farms near hydropower plants for 4 cents per KWH in WA State or in sudsidized corruption in China with probably free electricity for a handshake and a w ink.
  2. The distribution curves are exponentially front loaded.
As I described on my blog post about "the Zcash Founders Reward", this seems to align incentives in everyone's best interest.

Please let me know if you still disagree.
Yeah I disagree. As I wrote upthread, you didn't maximize funding for 10% to the corporation (1% to the foundation) and gave it only to a few investors in a non-competitive offering without any free market price discovery. This has highly limted the potential success of the project because speculators are going to resent being subject to being at an inherent disadvantage (in taking profits and pump and dumps). There will always be the risk that these large holders dump their coins all at once or manipulate the float on the exchanges. You've lost the network effects and free advertising that come from spreading out the initial distribution as widely as possible.

At least with an ICO, you'd get market pricing and wider distribution and I am nearly sure raised several $million instead of only $1 million for 10% of the coin supply.

Note there is one point that is ambiguous. I believe I read 10% goes to the corporation and 1% to the foundation if my memory has not failed me. It is not clear if the investors control all the shares of the corporation? And could the corporation issue more shares to raise more funds?

This is an important question because it sort of impacts the calculation of the initial market cap of the coin, and also what level of market cap some speculators are willing to buy at. (That isn't an exact science for many reasons as you may know.)

Also we have all noticed that you are sidestepping the question about FinCEN regulations that I have mentioned twice upthread. But perhaps your attorneys have advised you not to talk about that?
By the way, in the two examples you gave, Ethereum did have a premine, in the form of a pre-sale/crowd-fund/initial-coin-offering, and CLAM had an airdrop for Bitcoin users and others. But, Ethereum is (so far) a success, and CLAM is a failure! So, the two examples you gave seem to indicate that people will accept different distribution schemes, or perhaps what it shows is that other factors than the distribution scheme determine success or failure.

By the way, I love Ethereum! I am incredibly impressed that the Ethereum team pulled off such an ambitious technical feat as well as they did. That's one of the reasons I put Vitalik Buterin on the Zcash Technical Advisory Board.
Why are you impressed with a guy who wasted several million $ and never solved the fundamental flaw of long-running scripts causing an economic centralization of mining as I explained upthread. This new consensus-by-betting concept is appears to me to be yet another refusal by a young guy lacking experience to admit that the CAP theorem is fundamental. Yeah Vitalik is a bright math nerd, but that doesn't mean he necessarily has wisdom. He has written some tantalizing blog posts, but basically afaics the investors have paid for $millions of research & development that hasn't resolved the fundamental issues.

If you detect disdain in my tone, sorry it is not to be disrespectful to any person, but to accede to the reality that I started a successful software venture in 1998 (when I was age 33, considerably older and having more obligations than Vitalik at his age of 20 when Ethereum was formed) from a Nipa Hut in the Philippines with not even $1 of funding. I realize these block chain and anonymity technologies are quite complex and require a team of people ... but a clever person might devise a way forward that didn't require $millions up front investment ... we are hackers but we also need to be marketers ...

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 11:23 am

Premines are usually not seen in the brightest light. The issuance model in my opinion is very important and to think 10% of a new currency will automatically be dived up seems ludicrous. This was one of the biggest problems when people get into ethereum. It seems like you're dead set on a premine because of your investors. Have any thoughts to at the very least since you are set on a premine to set aside some small percentage of rewards in the way CLAM did for bitcoin users?
[...]

By the way, I don't agree that what we're doing with the Zcash Founders Reward is a premine. It's not pre! (Also it isn't mining.) But the part about it not being pre seems really important to me, because it means that anybody who can run a Zcash miner (which, I hope, will be almost anybody on the Internet) can have access to Zcash currency no later than the founders do.
I have argued that every crypto coin has been a premine because:
  1. in ICOs only those who buy at inception, get any at favorable prices. in PoW, only the miners get any, and most people in the world can't mine. In fact, very quickly mining is dominated by mining farms near hydropower plants for 4 cents per KWH in WA State or in sudsidized corruption in China with probably free electricity for a handshake and a w ink.
  2. The distribution curves are exponentially front loaded.
As I described on my blog post about "the Zcash Founders Reward", this seems to align incentives in everyone's best interest.

Please let me know if you still disagree.
Yeah I disagree. As I wrote upthread, you didn't maximize funding for 10% to the corporation (1% to the foundation) and gave it only to a few investors in a non-competitive offering without any free market price discovery. This has highly limted the potential success of the project because speculators are going to resent being subject to being at an inherent disadvantage (in taking profits and pump and dumps). There will always be the risk that these large holders dump their coins all at once or manipulate the float on the exchanges. You've lost the network effects and free advertising that come from spreading out the initial distribution as widely as possible.

At least with an ICO, you'd get market pricing and wider distribution and I am nearly sure raised several $million instead of only $1 million for 10% of the coin supply.

Note there is one point that is ambiguous. I believe I read 10% goes to the corporation and 1% to the foundation if my memory has not failed me. It is not clear if the investors control all the shares of the corporation? And could the corporation issue more shares to raise more funds?

This is an important question because it sort of impacts the calculation of the initial market cap of the coin, and also what level of market cap some speculators are willing to buy at. (That isn't an exact science for many reasons as you may know.)

Also we have all noticed that you are sidestepping the question about FinCEN regulations that I have mentioned twice upthread. But perhaps your attorneys have advised you not to talk about that?

The 11% is a premine. The staggered distribution to the insiders doesn't change that fact, and most will agree with shelby3 that it isn't smart to provoke FINCEN (who will inevitably close your 'security issue' down) and stay clear of Zcash. When there's a fork with 100% legit distribution open to everyone without the shenanigans involved with Zcash the crypto crowd will embrace the technology.

Zcash is the new Bytecoin ... I'm waiting for the Monero equivalent with a proper decentralised launch.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 3:01 pm

yeah this was the subject of my post on page 1, let me quote shelby3's link:
A more relevant question to ask would have been: Given that you plan to use a portion of the emission over the next 4 years to fund your company, have you registered as an MSB with FinCEN or have you obtained guidance from FinCEN that MSB registration is not required in your case?
https://bitcointalk.org/index.php?topic ... sg13737277

I mean, if Z.Cash at some point become really successful you better be prepared because i'm sure they will bring hell on earth just for you (fincen or other).

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 02, 2016 11:47 pm

Sorry if I'm late...

First, this is a dumb question: Why did you choose to have a mining reward that is discontinuous, as opposed to a more natural exponetial decrease in the reward? Clearly, you guys are confortable with math, so why not an exponential function?

Second: Are you worried that the total money supply of zcash can not (by design) be determined? Yes, I trust the crypto, but... what if the initial setup was flawed, or compromised? What if there is a flaw in the code (not the math)? Is this something we just have to live with?

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Wed Feb 03, 2016 7:36 am

Good morning from Southeast Asia.
Hello! Pleased to meet you, SOF. What country do you live in?
I would like to ask what are the options left available for a bitcoin user who doesn't use a smartphone and sticks to older generation 2G type basic phones without cameras and internet Wi-Fi for QR codes (for personal reasons like budget, wants to avoid the stronger wifi radiation or doesn't want to become a smartphone addict) and his wallet is limited to his desktop PC.
This seems to be a question about Bitcoin, rather than about my project, Zcash, but nonetheless I'm very interested to hear about it. In principle, it would be possible for you to run a full node on your desktop, and to use your basic phone to communicate with your desktop in order to learn about incoming payments and initiate outgoing payments.

But, that's just in principle — I don't know what kinds of products are actually available that would allow you to do that.
Likewise. I live in Singapore. Bitcoin penetration is probably a lot less than it should be for a modern IT-inclined city with wifi everywhere.

I just got on Bitcoin so I am a n00b for a lot of basics and still doing research as well as occasional pounding-the-pavement. So a lot of things to learn.

For the time being I am treating it as an investment platform (buy and hold until prices shoot up).
Bitcoin donations for my artwork at http://sofdmc.deviantart.com appreciated:
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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Thu Feb 04, 2016 4:21 am

Second: Are you worried that the total money supply of zcash can not (by design) be determined? Yes, I trust the crypto, but... what if the initial setup was flawed, or compromised? What if there is a flaw in the code (not the math)? Is this something we just have to live with?
I have proposed a solution which I think eliminates the concern.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Sun Feb 07, 2016 11:08 am

Whats the difference between ZCash and Dash? seems that you guys just take a 10% cut, im asking this question because im seeing it get asked more and more

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Mon Feb 08, 2016 3:58 am

Hello Zooko. Thank you for doing the AMA and sorry I'm late to the party...

I notice that ZCash has some funding from DARPA and the AFRL. Could you comment on what their motivation might be to do that? What is it about ZCash that appeals to those organisations?

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 09, 2016 10:44 pm

Sorry if I'm late...
You are! No guarantees I'll see any more posts on this thread. Apologies to anyone I miss after this.
First, this is a dumb question: Why did you choose to have a mining reward that is discontinuous, as opposed to a more natural exponetial decrease in the reward? Clearly, you guys are confortable with math, so why not an exponential function?
Not a dumb question. Here is the issue ticket where we considered and rejected that option: https://github.com/Electric-Coin-Compan ... issues/143 My decision was basically that the costs of differing from bitcoin exceed the possible values from that improvement. Also — I don't know if I wrote this on the ticket — the costs of differing from bitcoin include not being as sure about the emergent consequences of that behavior.
Second: Are you worried that the total money supply of zcash can not (by design) be determined? Yes, I trust the crypto, but... what if the initial setup was flawed, or compromised? What if there is a flaw in the code (not the math)? Is this something we just have to live with?
In short, yes, I'm worried about that. I hate putting all my eggs into the prevention basket, with nothing left over for detection and remediation. Our science and engineering team is working on some ideas for how to strengthen the detection side, but it is a hard problem. We're also in parallel working the strongest possible prevention-side. Join us on https://forum.z.cash or the zcash-dev mailing list if you want to help.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 09, 2016 10:51 pm

Whats the difference between ZCash and Dash? seems that you guys just take a 10% cut, im asking this question because im seeing it get asked more and more
Well, very different technologies for starters. I'm honestly not that familiar with Dash's technologies. Another factor that's very important to me is the strength of our team. My favorite press coverage on the web after our initial alpha release was a Bitcoin blogger who wrote something like "This announcement seems fishy. I think it might be a hoax announcement because the team is too good to be true.". I loved that. I feel the same way — our team is too good to be true. Note that the 10% founders reward (https://z.cash/blog/funding.html) is why we can pay that team to focus all of their efforts together on this project.

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Re: I'm Zooko Wilcox, CEO of the Zcash Company. Ask me anything!

Tue Feb 09, 2016 10:53 pm

I notice that ZCash has some funding from DARPA and the AFRL. Could you comment on what their motivation might be to do that? What is it about ZCash that appeals to those organisations?
No idea what you're talking about! All of our current investors are listed here:

https://z.cash/team.html#investors

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