ZenCash: Governance-As-A-Service (GaaS) Platform For Communications, Transactions & Publishing

On October 24th, 2017, ZenCash had a market cap USD $54,845,939 for the equivalent of 9,674 BTC with a circulating supply of 2,337,201 ZEN at a price of $23.47 per coin. On a day when many altcoins are feeling investor love, ZenCash is mostly flat, at +0.03%. Today, ZenCash hits the lists at cryptocurrency #89 by market cap.

I’m reviewing and aggregating data on ZenCash at the special request of a Twitter fan and crypto investor. Although this research diverts me from my primary goal of building profiles for the top 50 digital currencies, I’m excited to dig into this asset because I know so little about it.

Ranked #89 currently, is there a reason for ZenCash to rise into the ranks of crypto’s most wanted? The bottom half of the top 50 list is SUPER volatile, so who can say? Maybe there’s a catalyst for ZenCash growth we can identify from collecting fact and resources on ZenCash, from the website to the whitepaper.

ZenCash: “Private and Reliable Transactions, Communications, and Publishing”

  • Zen is an end-to-end-encrypted system with zero-knowledge technology over which communications, data, or value can be securely transmitted and stored.
  • Zen is an integration of revolutionary technologies that create a system over which innovation can accelerate by combining three functions that are traditionally done separately:
    • Transactions
    • Communication
    • Competitive governance
  • The Zen system integrates multiple best-in-class technologies to form an open platform for permissionless innovation that can evolve with user preferences.
  • Zen is a collection of products, services, and businesses built around an enabling technology stack employing zero-knowledge proofs and a core set of beliefs.
  • As a distributed blockchain system leveraging the latest censorship-evading techniques, fully encrypted communications, and a social and governance model designed for long term viability, Zen will contribute to the human right of privacy and provide the necessary networking infrastructure for people to securely collaborate and build value within a borderless ecosystem.
  • “Our mission is to integrate the latest technologies available post-Satoshi with a decentralized, voluntary, and peaceful set of social structures to improve life for anyone who wants to participate. We believe that this is an idea whose time has come.”
  • Zen’s framework is a secure, privacy-oriented infrastructure with a governance system structured to enable participants to collaboratively extend functionality in many dimensions.
    • Opportunities include hosting of individual identification data, selective proof of title for property, decentralized banking services, privacy-preserving p2p/b2b asset exchange, mutual aid societies, p2p insurance, decentralized humanitarian aid mechanisms, or use purely as an anonymous token of value.
    • These functions can be utilized to serve disenfranchised populations currently excluded from vital services such as banking and healthcare due to lack of identification, capital, and secure channels.
    • Can also be leveraged by individuals who desire to take ownership over and monetize their private data, or, for example, by enterprising communities that wish to develop competitive bidding system on internally generated solar energy.
    • The unique implementations are unbounded, the common link being the belief that decentralization is the engine of moral progress, and that voluntary solutions are the most creative and enduring.
  • Zen builds on the heritage of the best cryptocurrencies, network architecture, and distributed file sharing systems in existence by incorporating both existing as well as new features to yield a solid foundation designed for long term viability.
  • Just as important as our technology stack, we’re building on the latest ideas in distributed consensus and competitive governance.
  • Some of the foundations of our project come from Bitcoin, Dash, Decred, and Seasteading.
  • Zcash extended Bitcoin with fully anonymous shielded transactions, so that users could choose between normal Bitcoin-like addresses (t-addresses) or shielded addresses resistant to traffic correlation analysis (z-addresses).
    • Then we created Zclassic, a Zcash clone that changed some key parameters our community felt were important: we removed both the 20% Founders’ Reward for the first four years (10% lifecycle equivalent) and the slow start to the money supply.
    • Since launching Zclassic, we’ve formed a vibrant open-source community eager to move the technology forward in a unique direction.
    • Some early accomplishments include developing an open source mining pool application for both Zcash and Zclassic, as well as Windows and Mac wallets.
    • Our team realized that Zclassic could be further extended as a fully encrypted network with an innovative economic and governance model that better aligns with Satoshi’s original vision for a decentralized global community.
    • We view Zclassic as a fundamentally pure open-source, all-volunteer cryptocurrency project, while Zen extends into a platform with internal funding to facilitate a broader set of communications, file-sharing, and economic activities.
  • Zen specifications at Launch:
    • Zen is the overarching system over which ZenCash tokens disseminate, similar to projects.
    • ZenCash is designed as a fork from Zclassic.
    • Release date: 8PM EDT, 23rd May 2017 as a fork from Zclassic (0:00 UTC).
    • Equihash hashing algorithm, which is a memory-hard, proof-of-work mining algorithm based on the generalized Birthday Problem and Wagner’s algorithm for it.
    • Block reward: 12.5 ZenCash.
    • Block generation: 2.5 minutes.
    • Block size: 2 MB.
    • Difficulty adjustment algorithm: Digishield V3.
    • Division of each PoW block reward and transaction fees between miners and other stakeholders:
      • 88% to miners.
      • 5% to one or more DAOs.
      • 3.5% to Secure Node Operators.
      • 3.5% to the Core Team.
    • Total eventual coin supply: 21 million.
    • Reward halving every ≈ 4 years, per Bitcoin.
    • Shielded Transactions obscure sender, receiver, and amount from blockchain.
    • Transparent transactions publish sender, receiver, and amount on blockchain.
    • Secure message field in z transaction with 1024 bytes of characters:
      • Secure publishing to GNUnet and / or IPFS locations.
      • Short messages between users.
      • Publish to channels viewable by anyone with channel capable wallet.
    • Secure Nodes perform infrastructure functions:
      • Ensure all network communications are encrypted between nodes.
      • Maintain full ZenCash blockchain.
      • Provide certificate-based encryption connections for ZenCash wallet applications.
      • Secure Nodes meeting requirements receive coinbase rewards.
      • Domain Fronting service for z transactions using a commercial CDN.
    • Zen DAOs responsible for the operations and continued improvement of the system. They will build and operate:
      • Zen information distribution (Web, wiki, blog, media).
      • Proposal System and Voting System.
      • Reporting and monitoring systems.
  • “We’re structuring optimal decentralization and persistent competition so the system constantly evolves and never hits a comfort plateau.”
  • Zen addresses a metadata weakness of other cryptocurrencies with:
    • ZenTalk – A new type of secure communications network that allows for one-to-many communication using the blockchain to store messages permanently.
      • Z transactions in ZenCash have the ability to incorporate text-based messages, which are encrypted and included in the blockchain.
      • There is a 1024 character limit for these messages, and they enhance the ability for users to conduct secure commerce.
      • Instead of discussing the transaction in other less-secure channels that may not have the same level of privacy enhancements as Zen, users can communicate via the ZenTalk messages with the other party or parties before and after the shielded transfer takes place with very small z transaction spends.
      • These messages can be sent directly from one z address to another, and they can also be sent to a channel.
    • ZenPub – An anonymous document publishing platform using GNUnet or IPFS.
      • Zen has the ability to publish documents to the IPFS or GNUnet.
      • This is done by publishing a IPFS or GNUnet address in the text field of a z address.
      • The preferred document publishing system at this time is GNUnet, because it provides the required infrastructure for anonymous publishing and maintains an active database of documents.
      • The system is similarly extensible to IPFS or any other future distributing archival system.
      • By creating an anonymous messaging layer in conjunction with an anonymous publishing layer, ZenPub allows for the creation of truly anonymous publications which can be rapidly distributed to interested readers.
    • ZenHide – The ability to circumnavigate crypto-commerce blocking using domain fronting.
      • Zen uses Domain Fronting to extend the ability to complete transactions in adversarial network environments.
      • A censor, unable to distinguish fronted and non-fronted traffic to a domain, must choose between allowing circumvention traffic and blocking the domain entirely, which results in expensive collateral damage.
      • Domain fronting is easy to deploy and use and does not require special cooperation by network intermediaries.
      • We identify a number of hard-to-block web services, such as content delivery networks, that support domain-fronted connections and are useful for censorship circumvention.
      • The specific implementation of Domain Fronting used by Zen at launch is with a Commercial Content Distribution Network, but as with every aspect of our architecture, flexibility is designed in from the start and the system can extend in many directions as the technology evolves.
  • What are Z transactions? These are transactions sent to shielded addresses, as inherited from Zcash and Zclassic.
  • The basis of the privacy properties of Zcash is that when a note is spent, the spender only proves that some commitment for it had been revealed, without revealing which one.
    • This implies that a spent note cannot be linked to the transaction in which it was created.
    • That is, from an adversary’s point of view the set of possibilities for a given note input to a transaction, its note traceability set, includes all previous notes that the adversary does not control or know to have been spent.
    • This contrasts with other proposals for private payment systems, such as CoinJoin or CryptoNote, that are based on mixing of a limited number of transactions and that therefore have smaller note traceability sets.
  • Zen Secure Nodes:
    • Zen nodes are the key systems that maintain the Blockchain, accept transactions from wallets, validate miner solutions, and act as the decentralized computing and communications system for cryptocurrencies.
    • Instead of regular nodes, Zen requires Secure Nodes, which ensures the nodes maintain a basic standard of security and performance to ensure the system remains distributed, resilient, and secure.
    • By enforcing encrypted communication between nodes, and between nodes and wallets, Zen protects against eavesdropping and man-in-the-middle attacks.
    • In Zen, all information transmitted to and from the Secure Nodes is encrypted with valid certificates using TLS version 1.3 and further protected with Perfect Forward Secrecy (PFS).
    • Basic infrastructure functions performed by Secure Nodes:
      • Ensure all network communications are encrypted between nodes.
      • Maintain full Zen blockchain.
      • Provide certificate-based encryption connections for ZenCash wallet applications.
      • Because Zen will have this distributed computing network in the form of compensated Secure Nodes, these nodes may be required to provide other computing services for the network depending on the evolution of community consensus.
    • Zen Secure Node operations is encouraged and funded by a 3.5% redirection of block mining reward.
    • “For reliability, we want thousands of nodes all over the world that users can connect to quickly and easily, and are willing to provide compensation to the node operators. If we have an extensive, distributed, and reliable network, people can use ZenCash no matter what happens.”
    • Secure Nodes enable the security and reliability of the ZenCash system.
    • The basic requirements of Secure Nodes are:
      • Maintain a minimum of 42 ZEN in transparent address per node. Demonstrates the operator cares enough about ZenCash to own some.
      • Create and maintain a valid TLS certificate from a known Certificate Authority. This enabled encrypted data transport.
      • Run the node on a server with enough processor and memory so that it can meet a computational challenge. This protects against DDoS attacks.
      • Maintain a full copy of the ZenCash blockchain. This makes sure no UTXO’s  or commitments are lost.
      • Keep the node up and running at least 92% of the time.
    • The purpose of funding secure nodes is not to reduce the amount of ZenCash available to the market with the intent of taking it out of circulation.
    • The purpose is to create a node network that is large enough and resilient enough to provide the foundation for a worldwide private communication and publishing system that is difficult to interrupt and gather data on.
    • “Ideal would be 1000-5000 secure nodes, each running on a separate system, all over the world.”
    • The Zen Secure Node reward system has to be designed in a way that will prevent the operation of a large number of secure nodes on one server in one place.
    • Zen Secure Nodes require multiple applications running on different systems to operate.
  • Wallets can be configured to use any available ZenCash node for communication, or can be set up to only connect to Secure Nodes in order to maintain high standards of information security.
  • Zen is designed with a decentralized governance model incorporating multi-stakeholder empowerment and the flexibility to evolve to optimally suit our community.
  • “Fundamentally, our philosophy on governance is that we do not know a priori the best approach, but we have some ideas for how to initialize the system and enable it to evolve with the needs of the community.”
  • The Zen system will have at least one DAO funded by a portion of the mining rewards, and governed by a voting system that brings stakeholders together.
  • ZenCash differentiates by focusing on communication encryption from wallets to nodes, and in enabling easy to use private communications and publishing.
  • There is no cryptocurrency in existence that guarantees full end-to-end encryption of the distributed network – ZenCash is designed to be fully encrypted as a network and also as a means to send and distribute money.
  • ZenCash did not conduct an ICO or a pre-mine.
  • ZenCash: “Designed for the World, and for the Future”
  • Reliable funding for continuous improvement: The ZenCash Treasury fund is generated by 8.5% of each block mining reward and is used for operations, development, and getting out the message of Zen to the World.
  • “Competition is infused into Zen at its very core; by its nature, it is a necessity of optimal decentralization and a principle we believe enables beneficial evolution.”
  • ZenCash directly competes with ZCash, Zclassic, Dash, Monero, ZCoin, Bytecoin, ShadowCash, Boolberry, and other privacy-augmented cryptocurrencies.
  • Competition ranges across multiple dimensions, but from a technology perspective, we directly compete with the other zero-knowledge currencies using zk-SNARKs.
  • Privacy as a feature means that ZenCash competes with other implementations, such as the Zerocoin protocol, CryptoNote, RingCT, and simpler mixers.
  • “Our value proposition is that we incorporate elements that we consider to be best-in-class, which starts with inheriting ZCash’s implementation of zero-knowledge shielding via zk-SNARKs, but we take this a crucial step further and obfuscate our entire network with end-to-end encryption and enable messaging within the most secure infrastructure in the space.”
  • “We do not intend to be displaced, because we are structurally prepared to not only update and rejuvenate our systems as the underlying technology advances, but to ourselves be the space’s innovators.”
  • “Our unique innovation to the cryptocurrency community is our fully competitive and evolutionary governance model to empower a broad cross-section of stakeholders in an environment of optimal decentralization.”
  • “We believe Zen is groundbreaking in social technology, pioneering a system that has never been attempted at scale.”
  • “As a secure messaging and distributed data archival system, we compete with other services, such as Signal, Telegram, and the Tor Project.”
  • “We hope that Zen adds positively to human welfare by integrating great technologies and communities, morphing governance into a competitive service, and enabling anyone in the world to participate in our system of permissionless, collaborative, and decentralized innovation.”
  • “We also view incumbents and future startups in this space as potential partners and allies instead of winner-takes-all competitors.”
  • “We believe that the decentralized, fully inclusive, voluntary, and flexible organization we’re creating will be seen as obviously superior in the future compared to the static, centralized, one-size-fits all versions perpetuated in the 20th century.”
  • The primary market for ZenCash is Bittrex (currency pair ZEN/BTC), representing 98.94% of daily volume.
  • The Twitter page for ZenCash is @zencashofficial
  • Market cap history:
    • June 7th, 2017: ZenCash ended the day at market cap $23,967,400.
    • September 1st, 2017: ZenCash reaches market cap $26,204,400.
    • October 20th, 2017: ZenCash market cap reaches $52,823,400.
    • October 23rd, 2017: ZenCash market cap reaches 2017 high of $55,200,200.
  • Resources:

“We believe in governance as a service (GaaS) and aim to efficiently provide value to our direct stakeholders, the broader community, and the world.”

Thanks for reading!

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