
Another crypto-currency is born - doener
http://www.economist.com/news/finance-and-economics/21709329-another-crypto-currency-born-known-unknown
======
Animats
(Article date: Oct 29th 2016). This is so last week. Zcash has already
crashed. Peaked around $5000, today $127. Not only that, the anonymity feature
didn't work. You can't send to "z addresses" only. This is claimed by the
developers to be a bug they will fix. Since that was the main feature of this
altcoin, and they shipped with it broken, they're either incompetent or
disabled it to avoid regulatory problems.

Roger Ver, a convicted felon who claimed Mt. Gox was sound[1], is involved
with ZCash. What could possibly go wrong?

ZCash is from Tel Aviv, headquarters of "binary option" scams. The entire Tel
Aviv based binary options business has been exposed as a scam. [2] (Short
version: a binary option is a bet against the house, not other investors, and
the house cheats. Online binary option companies claimed to be in lots of
places, including Trump Tower, but they're almost always really in Tel Aviv.)
People in the "binary option" industry are now looking for new scams. "Forex"
is one. There's a lot of interest in "blockchains" there.[3] This is a worry.

[1]
[https://www.youtube.com/watch?v=UP1YsMlrfF0](https://www.youtube.com/watch?v=UP1YsMlrfF0)
[2] [http://www.timesofisrael.com/the-wolves-of-tel-aviv-
israels-...](http://www.timesofisrael.com/the-wolves-of-tel-aviv-israels-vast-
amoral-binary-options-scam-exposed/) [3]
[http://bravenewcoin.com/news/bitcoin-and-blockchain-
startups...](http://bravenewcoin.com/news/bitcoin-and-blockchain-startups-
booming-in-israel/)

~~~
exstudent2
Zcash prices were insanely high on day one because demand was high and there
was practically no supply. Everyone knew that was going to happen and the
price is now normalizing.

There is a bug with mining to zaddresses but Zcash developers have been
extremely transparent about it and were the first to say that this crypto is
untested and will be iterated.

As for Tel Aviv... it doesn't matter where technology is developed, does it?
Your comment strikes me as xenophobic muck raking.

ZCash has unique properties. You're free to not buy it and honestly the
negative speculation helps those of us that are interested in using it as it
keeps prices down (for now).

------
micimize
This article neglects to mention Monero or Dash, the preexisting altcoins
designed to be have anonymous transactions, or any existing shuffling tools
like dark wallet.

I'm not an expert by any means, but this seems like a good compare/contrast
that elucidates zcash's actual place in the space:
[https://www.reddit.com/r/Monero/comments/41vg68/monero_vs_zc...](https://www.reddit.com/r/Monero/comments/41vg68/monero_vs_zcash_eli5_fundamental_differences/cz63pqw/)

~~~
ewillbefull
Disclosure: I am an engineer working on Zcash.

Anonymity is not a binary. Monero, even with the addition of RingCT, is
vulnerable to transaction graph analysis (intersection attacks) that can de-
anonymize users. Zcash takes a completely different approach that achieves
ledger indistinguishability -- shielded transactions in the blockchain have no
apparent relationship with each other, which is an essential privacy benefit.

Much of what I read in that thread is wrong or misleading: Monero does not
have a trusted setup, but it's important to note that a failure in Zcash's
setup does not disrupt the privacy of the system. The "poison-pill"
vulnerability is not a concern in our system. The claims about the anonymity
set are very misleading. It is possible to do far more than multi-sig in our
system, we just haven't implemented it yet. The point about mining is specific
to the paper and is irrelevant.

There are downsides to the system, such as our performance problems, but they
are solveable given time. Zcash is obviously not the only player, but it's
also going to continue to grow and adapt and improve, just like other
cryptocurrencies will.

~~~
grapevines
_Monero, even with the addition of RingCT, is vulnerable to transaction graph
analysis (intersection attacks) that can de-anonymize users._

Your comment is highly misleading. RingCT solves 4 of the 5 remaining, known,
privacy vulnerabilities in Monero ## The last remaining vulnerability has to
do with transactions made with very little turnover, i.e. an amount is
received and then immediately spent again. The privacy is stronger as the
amounts are held in the wallet for longer.

Monero is useable on a magnitude greater scale in 2017, and a full node can be
run with small CPU and memory. Zcash on the other hand requires minutes to
send anonymouse transactions.

In other words, Zcash provides 100% privacy at the expense of scalability
while Monero provides privacy approaching 100 percent as variable with time.

## [http://monero.stackexchange.com/questions/1495/what-
privacy-...](http://monero.stackexchange.com/questions/1495/what-privacy-
issues-did-monero-have-and-still-has)

~~~
ewillbefull
You misread my comment. There _is_ an oustanding privacy issue in Monero, one
that is often overlooked by its proponents. Transactions involving the same
individuals will appear closer together in the transaction graph, and this
remains the case so long as Monero's transactions have so few mixins.

My favorite example of anonymity is Richard Stallman's description of an
anonymous currency: you should be able to pay a publisher for every article
you read on their website, without them being able to associate the payments.

~~~
plasticmachine
You can do that with Monero right now (within a cryptographically negligible,
but plausibly deniable, risk) and it doesn't require crazy unreliable
cryptography, a (badly done) trusted setup, or 8gb+ of RAM and 60 seconds on a
Xeon.

~~~
CiPHPerCoder
What exactly is "badly done" about their trusted setup?

~~~
kbody
The "trusted setup" is a permanent unfixable security hole. While it's
partially secure in theory, it goes against the core value of Bitcoin and
cryptography where you trust he math and not some person. It will be a
constant cloud over Zcash. (I still see great academic value on the work
behind Zcash with zkSNARKs, but as a cryptocurrency at the current state it's
way too risky for real use)

------
joecool1029
Another business avenue The Economist might consider pursuing includes the
promotion of new penny stocks!

I looked but seem to have missed the disclaimer for this paid advertising. A
curious omission of its author too?

~~~
JumpCrisscross
The Economist doesn't do bylines:

"The first few issues of The Economist were...written almost entirely by James
Wilson, the founding editor, though he wrote in the first-person plural.

...

Having started off as a way for one person to give the impression of being
many, anonymity has since come to serve the opposite function at The
Economist: it allows many writers to speak with a collective voice."

[http://www.economist.com/blogs/economist-
explains/2013/09/ec...](http://www.economist.com/blogs/economist-
explains/2013/09/economist-explains-itself-1)

------
duckingtest
Their slow-mining start was, I think, a very bad idea. I get that they wanted
a more fair distribution and to prevent an initial bubble. However, bubbles
and rich early adopters result in organic viral marketing and create a network
effect. Given zcash's hype, with a faster coin issuance they had the potential
to beat ethereum in marketcap.

I really hope they succeed, anonymous currency is badly needed.

------
bachback
Great job - the currency is down 97-99% since launch 2 weeks ago (depending on
what prices one takes from the first day of public trading). I've been
following Altcoin launches since 2013, and this was the most ill-advised and
corrupted so far.

~~~
ewillbefull
That's not the full picture.

Zcash has a "mining slow start" which slowly ramps up the mining reward for
the first two weeks, to reduce the threat that a large amount of the ultimate
monetary base would be in control of early-advantage miners. As a result of
the significantly reduced supply, the price was very high shortly after
launch.

~~~
solotronics
I think additionally it would be good to compare the price*volume to get an
idea of whats happening. If only a few trades were made at $5k...

------
mabbo
Another cryptocurrency? Is it Tuesday already?

~~~
dgacmu
In fairness, this one is actually interesting, in the way that Monero and
Ethereum (and perhaps Ripple and Stellar) were also interesting, and 99% of
the other alt-coins are not. That doesn't mean it's a good idea or will be
successful or profitable, but it's at least interesting.

------
curiousgal
_Re Title_ Anyone can make a crypto-currency, adoption is what matters.

------
MrQuincle
Ethereum is Turing complete. Did anyone attempt to recursively define a
blockchain within it? :-)

That would be the same as the Ubercoin they mention I suppose.

------
badloginagain
Can't say that I like the idea of a kingly reserve to "align interests".
Honestly the biggest pull I would have to invest is because I feel I missed
the boat with Bitcoin and would feel smart being getting in on the ground
floor.

