Isn't 10% of mined zcash coins being skimmed by the founder?

Yes, it's premined crap (well, not quite but it operates as such). But it's all open source and someone will fork it. The point is the crypto exists and it's from some quite reputable people so even as a premined shitcoin it may have a chance.

Yes. z.cash centralizes control under a corporation, which makes it vulnerable to legal process and political risk, and it is what is known in the crypto world as a "pre-mine scam".

What is the legal risk? With a zkp properly involved shouldn't de-anonymization be impossible? Or do you mean other risks?

They've gone on record saying they're not liable for any criminal activity used by their coins, which lends me to believe that they'll unmask and turn anyone over if subpoenaed.

My question is: How can they unmask? I thought that was the entire point of the system.

Genesis block keys.

How is it a scam if the founders are honest about it? Everyone knows the name of the game.

It's a scam in the sense that it's basically a pump and dump game for the founders. Sure, many people will know it, but those who do will probably avoid it, it's those who don't who will buy it on markets and lose out when the founders dump.

Pump-and-dump is a major threat. Almost every cryptocurrency or related asset, including Bitcoin and Ethereum, has been vulnerable to pump-and-dump, and it is impossible to prevent.

One way to try to deter pump-and-dump is to make it so that the founders don't have any sort of privileged position, but then how could you afford to do all of the work to create a solid, usable protocol? The Zcash team (https://z.cash/team.html) is a world-class team of experts, and we all have mouths to feed during the years of our lives that we're devoting to this project.

Our solution is to trickle the Founders Reward out to the founders incrementally over the first four years, integrated with the rhythm of mining.

This militates against pump-and-dump in two ways:

1. Neither the Founders nor anybody else has a giant stash of Zcash at the beginning with which they can manipulate the market price.

2. The Founders are locked into receiving more and more Zcash over the first four years, so their incentive is for the price of Zcash to go up during that time.

In my opinion, this hack is awesome.

It affords us the opportunity to focus several years our lives on solving this important problem, which otherwise would probably go unsolved, and it offers a transparent and simple financial setup that users can evaluate for themselves if they think it is a good deal.

So I categorically reject the word "scam". There is no reasonable interpretation of the word "scam" which applies to the Zcash Founders Reward.

https://z.cash/blog/funding.html

There's no incentive not to sell (by the contrary), meaning there's no long term ownership, which means that the system just temporarily avoids the financial incentives to pump-and-dump, doesn't remove them.

If the Founders who get the 10% Founders Reward sell their Zcash (or some of it) before the four years of the Founders Reward has run its course, then that is not pump-and-dump. In fact, that is the opposite of pump-and-dump. That means that the market price of Zcash will be set by a multitude of buyers and sellers, none of whom have a privileged position, and it means that the Founders will have an incentive for the price to go up after they sell. That's the opposite of pump-and-dump.

Delaying a scam doesn't make it not a scam.

Don't get me wrong - You're doing great work and I hope it pays off, but I won't be using it unless it's forked and the founders reward is removed. I just can't trust it with 10% of the coin in control of a small group who didn't have to "pay" to get it.

I understand the desire to pay the founders, but couldn't something closer to the Bitcoin Foundation work?

"Scam" means dishonesty. It means attempting to deceive and defraud people. There is no sense in which that word is appropriate to apply to my business, and I won't participate in a conversation predicated on that falsehood.

Everybody knows about Pyramid schemes too, and they're still scams. The real scam is in convincing people that they are near the top.

What about https://en.wikipedia.org/wiki/Zerocoin inside bitcoin?

Zcash is what zerocoin has become (same developers). The hopes of getting something like this into bitcoin... may still be possible, but would require agreement amongst miners and developers. Something that seems unlikely right now.

The separate altcoin is the smartest way to experiment with it for now at least.

Thanks!

To anyone denouncing Zcash as "pre-mined crap" (and anyone who gives any credence to such denunciations), I recommend reading the founder's blog post on Funding, Incentives and Governance: https://z.cash/blog/funding.html

What's your point? that post basically just says yes, it's a pre-mined shitcoin but slightly disguised by being distributed over time using an algorithm.

To quote Zooko himself[1]: "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."

1: https://forum.bitcoin.com/ama-ask-me-anything/i-m-zooko-wilc...

He clearly doesn't understand the point - the point is that those founders have 10% of the coin, great control over the market and they've not had to pay (in the sense of PoW or cash) to get that control.

Nothing about what he said prevents this at all. It's still a pump and dump scheme, just longer term.

Basically they solved the most minor part of the pre-mine problem and claim they solved the whole issue.

Of course they've had to pay. In the case of the investors, they've had to pay cash up-front to fund the development of Zcash. In the case of other shareholders of Zerocoin Electric Coin Company, they've had to pay for, or otherwise legitimately obtained their shareholding -- for example by their labour, in the case of developers who are also shareholders.

"Pump and dump" means fraudulently manipulating the price of a stock by making deliberately misleading or inaccurate statements in order to sell it at a premium. That's illegal under securities law. If you invest in something that then increases in value over a long period because people generally think it is valuable, and at some point you sell it, that is not "pump and dump".

Declaration of interest: I'm a Zcash developer and I hold some shares in Least Authority, which owns part of Zerocoin Electric Coin Company.

Does z.cash prevent deanonymization via IP traffic analysis?

Does it resist clusterization?

No, that's Tor's job.

It's a bit more complicated than that. The main responsibility for implementing connection layer unlinkability lies with Tor (if you use Zcash over Tor, which we will aim to provide good support for), but how effective that is in resisting deanonymization attacks at that layer depends a great deal on the higher level protocol and its implementation. That's why it's recommended to use TorBrowser to browse the web anonymously; if you were to use a stock browser, then there would be numerous attacks that reduce the size of your anonymity set. We've tried to pay attention to minimizing leakage of information in the Zerocash protocol; you can read the numerous tickets on that here: https://github.com/zcash/zcash/issues?page=2&q=is%3Aissue+la...

Also, note that even against an adversary that can observe all connection metadata, Zcash maintains strong unlinkability of which notes are involved in a private transaction.

A cool protocol, trusted setup though.

Here's what I wrote about that: https://z.cash/blog/snark-parameters.html

A good writeup, and exactly what I was saying by "trusted set-up." I think it's important that this trusted set-up (and your writeup ofc) are known by anyone who is going to store value in the currency, rather than just merely assuming it's "same as bitcoin with more privacy."