At 20:34 on November 18, 2020, as the network block height reached 1,046,400, the Zcash (ZEC) block reward was reduced from 6.25 ZEC to 3.125 ZEC, announcing the completion of the first reward halving.
This halving year is over today.
At the beginning of the year, the “halving concept” was hyped vigorously. Now when it was time to settle the general ledger, we took out the 8 major halving currencies and “walked for a walk”, and found some interesting conclusions.
Let me see who hasn’t risen at all?
Among the eight major currencies, except for BTC, the remaining tokens are all halved for the first time, so this time the performance can be regarded as a “exemplary” for the next time. Moreover, because it is the first halving, the supply contraction brought about by it has a greater intuitive impact on the supply-demand relationship and the performance of tokens. Let us see who has the greatest stamina for the halving.
Judging from the increase in the month of the halving, except for ETC, which fell sharply on 3.12, the remaining tokens all grew positively during the halving month. The strongest is DASH. The halving month has risen by 32%, and the rest is about 15%. Only ZEC and ZEN (Horizen, equivalent to the Zcash fork), have only risen less than 5 this month in the market. %.
This last shot was a bit “fading away.”
Looking at the increase during the year, if the halving month did not perform well, is it possible to perform at other times?
We see that at least ZEN is “not”. Since the beginning of this year, it has barely maintained last year’s price, and it seems that there is no such thing as a “halving”.
The data of BCH before the hard fork in November was not bad, and the price of the currency fell sharply before and after the fork, and the overall increase this year did not exceed 20%. The remaining tokens have risen by 70-80%, including the protagonist Zcash, who is halving today. The annual performance is fair.
The best gains were BTC and its bifurcated coin BCD (Bitcoin Diamond), which recorded 150% and 118% gains respectively.
The halving of the bull market is the cause of Bitcoin’s fire. Sure enough, only it can truly “go up.”
The benefit of Zcash halving was realized as early as the beginning of the year. In the long run, the halving will have a greater impact on fundamentals
The Chinese name of Zcash is “Big Zero Coin”, which was founded in October 2016. Through zk-SNARKs technology, comprehensive anonymous transactions can be realized. It is called the three major anonymous coins along with Dash (Dash) and Monero (Monero).
I don’t know if it’s too late. The market seems to be indifferent to Zcash’s “halving the last stick”.
According to QKL123 statistics, Zcash’s main funds and market popularity have been negative for a month, and the daily outflow of Zcash’s funds can reach more than 10 million yuan.
From the perspective of currency price performance, Zcash has risen by 122% this year, and the performance is acceptable. However, if you look closely, most of the increase was concentrated in January (140%) when the halving concept sector was hot; April Although there are also higher gains, but more is the bottoming out of the 3.12 oversold rebound.
In the past three months, Zcash has fallen by 24%. In the past week and 24 hours, Zcash has only followed the market, and has not had a breakthrough performance due to the halving.
Since there was no “good performance” before the halving, what about after the halving? It depends on the impact of the halving on the balance of supply and demand.
According to the statistics of QKL123, Zcash’s current inflation rate is 25%, and after the halving, the inflation rate is 12%, which is a large decline. It can be seen that the reduction of block rewards will have a greater impact on the supply side of Zcash in the future.
We can also calculate in detail. Before the halving, Zcash produced about 7,000 coins per day. The average daily output value in the past month fluctuated between 2.4-4.1 million yuan (with the currency price). After the halving, it was equivalent to Zcash miners. The selling pressure is reduced by half, that is, Nissan coins will be reduced by 3,500, which will reduce 1.27 million in one year. At the current price of $60, the supply side of Zcash is expected to decrease by $76.65 million in the next year, not a small amount. .
Of course, whether Zcash can rise in the future, supply deflation is only one aspect, and we will analyze its other fundamentals later.
Let’s first look at the mining revenue directly affected by the halving.
Before the halving, Zcash’s entire network computing power is about 7000Msol/s. If the currency price does not rise after the halving, miners’ income will be directly halved. At this time, some low-yield mining machines may choose to shut down or transfer to similar algorithms Other tokens.
In the end, how many mining opportunities will withdraw from the network due to the reward halving, I am afraid it will take a few days to know.
The development team led the continuation of the “tax collection”, which is totally unpopular?
In fact, as early as last year, the author had heard miners criticize Zcash.
The reason is that it proposes to continue the tax collection mechanism, which directly touches the interests of miners, and also violates the spirit of “said one thing” of the blockchain. It appears that Zcash is controlled by the development team and is quite centralized.
According to the original design of Zcash, in the first four years of the project, 20% of the block reward will be used as the operating expenses of the founder and the team (that is, the ECC company). This decision is based on the decentralization The times have been quite controversial, so this mechanism is also vividly called the “miner tax.”
According to plan, this kind of crowdfunding mechanism will end in October 2020. But in May of this year, the Zcash Foundation re-voted in the community. The result of the vote was to overturn the previous design and continue the crowdfunding mechanism.
And the development team also has problems. It seems that the ecology has not been built and a lot of money has been spent. In May last year, Electric Coin Company, the development company of ZCash, disclosed its transparency report for the second half of 2018, with a financial deficit of US$3 million.
In July 2019, some founding team members forked Zcash, created a new chain Ycash, and implemented the original route.
Therefore, in addition to the halving today, Zcash also carried out an upgrade called “Canopy” to adjust Zcash’s token distribution.
This upgrade will allocate ZCash block rewards for the next four years. Of which, 80% will continue to go to miners and 20% will be used for the development of ZCash, of which 8% will be allocated to the “Appropriation Fund”. Zcash development company Electric Coin Company (ECC ) Gets 7% and Zcash Foundation gets 5%.
In fact, the token reward for ECC is likely to be greater than 7%. According to ECC’s 2018 semi-annual report, the company has incurred millions of dollars in losses, so it has decided to allocate funds from the Zcash Foundation from June 2019 to provide the company with more than $380,000 in operating expenses every month.
So, what did the development team that divided a considerable part of the tokens with the miners and the community?
According to public information, Zcash has undergone a total of 5 upgrades under the leadership of ECC in the past 4 years. The upgrade direction is almost to improve transaction performance. The biggest upgrade is to reduce the block confirmation time and memory required for anonymous transactions. , And launched BOLT (Blind Off-chain Lightweight Transactions), an off-chain transaction application similar to the “Lightning Network”.
Compared with the initial version, this upgrade has no qualitative breakthrough, and it cannot be compared with public chains such as Ethereum, which has drastically promoted applications.
Therefore, it does not seem to be expected to continue to maintain the pattern of mining, breeding and development, and ECC-led.
The market value of the privacy public chain is squeezed, and the story of Zcash is going to be outdated?
Remember that two years ago, when we counted the three anonymous coins, their market value rankings were still 12-21. With the rise of new projects such as sharding, PoS, cross-chain, DeFi, and storage in the past two years, anonymous The front line of the currency has “retreated”, and the rankings of the three anonymous coins have fallen back by 1, 10 and 9 respectively.
This reflects to a certain extent that the audience for private vertical public chain stories is becoming scarce.
In the past two years, there have been too many stories in the blockchain world. From breakthroughs in efficiency and cost of the chain to breakthroughs in practicality, we have seen too many choices that may make the blockchain world better. Although privacy is just needed, it can also be added to these new public chains as one of the functions. Then, what is the need for people not to use these anonymous coins?
ZCash and Monero seem to be confined to their own three-acre land, and Dash has already planned a transformation.
In October 2019, Raico, the head of the Dash Chinese community, said in an interview with Odaily, “Dash is instant payment by default, and anonymous payment is only an option. This shows that what Dash wants to do is not anonymous currency, but payment. Type digital currency, Digital Cash (digital cash).”
From the perspective of its evolution, Dash has indeed gone beyond the scope of DarkCoin, and has implemented many innovative applications in terms of public chain scalability, developer incentives, and community governance.
On top of the underlying PoW ledger, Dash designed a master node network with POS as a consensus mechanism, providing the network with functions such as currency mixing, instant payment, resistance to 51% attacks and community voting governance, and a fixed 10% block reward Allocate to the “Budget System DASH DAO”, thereby achieving relatively decentralized and efficient development and construction.
As some people in the industry have said about privacy coins, “For tokens that want to go to the public, pure privacy performance is not suitable as a core value proposition; but looking at the future of privacy, mainstream cryptocurrencies deploy privacy Function or will become the ultimate destination of privacy.
There seems to be no future for pure privacy coins and privacy public chains. So as a characteristic asset that can be held?
In October of this year, Ethereum token issuer Tokensoft and crypto custodian Anchorage launched wrapped zcash (WZEC), which is 1:1 pegged to ZEC (similar to WBTC and BTC pegs). Essentially, it is for ZCash holders, bringing ZCash as a pure asset to the Ethereum ecosystem for circulation.
Although at this time, ZCash’s private transactions have disappeared and lost their original meaning.
Recently, ZCash has a good news-it has gained gray holdings.
The AICoin index shows that on November 8, Grayscale’s ZEC trust holdings increased by 3534 ZEC, an increase of 2%, and the total amount reached 179,000 ZEC.
“Although the amount of grayscale holdings is not large, it is not bad compared to the reduced holdings of BCH.” Analyst Xiao K felt that ZEC performed well in the old mainstream currencies.
In the past 3 years, the position of anonymous currency has gradually disappeared from the account of Xiao K. He can’t remember when the last time anonymous coins attracted attention.
Perhaps, two years ago, Grin based on Mimblewimble was highly decentralized and was popular in the market as a clear stream.
“I really hope that’s not the last spring of Anonymous Coins.” Little K thought about it and said leisurely.