The half-year halving has come to an end. Which of the 8 halving coins has risen the most?

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 has come to an end today.

At the beginning of the year, the "halving concept" was hyped up. Now it's time to settle the accounts. We took a look at the eight major halving currencies and found some interesting conclusions.

Let me see who hasn’t increased at all?

Among the eight major currencies, except for BTC, the other tokens are halving for the first time, so the performance this time can be regarded as a "model" for the next time. In addition, because it is the first halving, the supply tightening it brings has a greater direct impact on the supply and demand relationship and token performance, so let's see which halving has the greater stamina.

Judging from the increase in the month of halving, except for ETC which plummeted on March 12, the other tokens all showed positive growth in the month of halving. The strongest one was DASH, which increased by 32% in the month of halving, and the others were mostly around 15%. Only ZEC and ZEN (Horizen, equivalent to Zcash fork coin) increased by less than 5% in this month when the market was so good.

This last baton was a bit of a "laydown".

Looking at the year-to-date gains again, if we subtract the poor performance in half a month, is it possible that those that performed well at other times?

We can see that at least ZEN "did not". Since the beginning of this year, it has barely maintained last year's price, and there seems to be no such thing as "halving".

BCH's data was good before the hard fork in November, but the price plummeted before and after the fork, and the overall increase this year does not exceed 20%. The increase of the remaining tokens is mostly 70-80%, including Zcash, the protagonist of today's halving, and the annual performance is acceptable.

The best performing coins were BTC and its fork coin BCD (Bitcoin Diamond), which recorded increases of 150% and 118% respectively.

The halving bull market was sparked by Bitcoin, and indeed, it is the only one that can truly “rise”.

The positive effects of Zcash halving were realized at the beginning of the year. In the long run, halving will have a greater impact on fundamentals.

Zcash, whose Chinese name is "Zero Coin", was founded in October 2016. It can realize comprehensive anonymous transactions through zk-SNARKs technology. It is known as the three major anonymous coins together with Dash and Monero.

I don’t know if it’s because it came too late, but the market seems to be indifferent to Zcash’s “last halving”.

According to QKL123 statistics, Zcash's main funds and market enthusiasm have been negative for a month, and Zcash's daily capital outflow can reach more than 10 million RMB (see the figure below).

qkl123.com

Judging from the performance of the currency price, Zcash has increased by 122% this year, which is a decent performance; but if you look closely, most of the increase was concentrated in January (140%) when the halving concept sector was very popular; although there was also a relatively high increase in April, it was more of a bottoming rebound caused by the oversold on March 12.

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 made any breakthroughs due to the halving.

feixiaohao.com

As of press time, Zcash was temporarily trading at $63.45, with a 24-hour cumulative increase of -2.38%.

Since there was no "good performance" before the halving, what about after the halving? This depends on how much impact the halving has on the balance of supply and demand.

According to QKL123 statistics, Zcash’s current inflation rate is 25%, and the inflation rate after halving is 12%, which is a large decrease. It can be seen that the reduction in block rewards will have a greater impact on the supply side of Zcash in the future.

We can also do a detailed calculation. Before the halving, Zcash produced about 7,000 coins per day. In the past month, the average daily output value fluctuated between 2.4 million and 4.1 million yuan (depending on the price of the coin). After the halving, the selling pressure from Zcash miners was reduced by half, that is, the daily output was reduced by 3,500 coins, which will be reduced by 1.27 million coins in a year. Based on the current price of $60, the supply side of Zcash is expected to decrease by $76.65 million in the next year, which is not a small amount.

Of course, supply deflation is only one aspect of whether Zcash can rise in the future. We will analyze its other fundamentals later.

Let’s first look at the mining revenue that is directly affected by this halving.

Before the halving, the total network computing power of Zcash was around 7000Msol/s. If the price of the currency does not rise after the halving, the miners' income will be directly halved. At this time, some low-income mining machines may choose to shut down or transfer to other tokens with the same algorithm (as shown in the figure below).

Some Zcash mining machines had revenues of less than 10 yuan before the halving. Image from poolin.com

Other tokens that also use the Equihash algorithm. Image from wabi.com

We may have to wait a few days to find out how many miners will eventually exit the network due to the halving of rewards.

The development team continued to "collect taxes" and lost the support of the people?

In fact, as early as last year, I heard miners complaining about Zcash.

The reason is that it proposes to continue the taxation mechanism, which directly affects the interests of miners. Secondly, it goes against the spirit of blockchain "one word, one word", making Zcash appear to be controlled by the development team and quite centralized.

According to the original design of Zcash, in the first four years of the project, 20% of the block rewards will be used as operating expenses for the founders and team (that is, ECC). This decision was already controversial in that era of decentralization, so this mechanism is also vividly called the "miner's tax."

According to the plan, this withdrawal mechanism will end in October 2020. However, in May this year, the Zcash Foundation re-voted in the community, and the result of the vote was to overturn the previous design and continue the withdrawal mechanism.

Moreover, the development team also has problems. It seems that the ecosystem has not been built and a lot of money has been spent. In May last year, the Electric Coin Company, the development company of ZCash, disclosed its transparency report for the second half of 2018, with a financial deficit of 3 million US dollars.

In July 2019, some members of the founding team forked Zcash and created a new chain, Ycash, to follow the original route.

So, in addition to the halving today, Zcash also carried out an upgrade called "Canopy" to adjust the token distribution of Zcash.

This upgrade will distribute ZCash’s 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 the “grant fund” will receive 8%, the Zcash development company Electric Coin Company (ECC) will receive 7%, and the Zcash Foundation will receive 5%.

In fact, the token rewards received by ECC are likely to be greater than 7%. According to ECC's 2018 semi-annual report, the company suffered millions of dollars in losses, so it decided to allocate funds from the Zcash Foundation from June 2019 to provide the company with more than $380,000 in operating funds per month.

So, what did the development team, which shared a considerable portion of the tokens with the miners and the community, do?

According to public information, Zcash has undergone five upgrades in the four years since its launch, led by ECC. Almost all of the upgrades were aimed at improving transaction performance. The biggest upgrade was to reduce the block confirmation time and memory required for anonymous transactions, as well as to launch BOLT (Blind Off-chain Lightweight Transactions), an off-chain transaction application similar to the "Lightning Network".

This upgrade does not represent a qualitative breakthrough compared to the initial version, and cannot be compared with public chains such as Ethereum that have made drastic progress in promoting applications.

Therefore, it does not seem desirable to continue the pattern of mining to support development and ECC dominance.

The market value of privacy public chains is being squeezed. Is the story of Zcash becoming outdated?

I remember that two years ago, when we counted the three major anonymous coins, their market capitalization 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, the anonymous coin front has "retreat", and the rankings of the three major anonymous coins have regressed by 1, 10, and 9 places respectively.

Data from Feixiaohao, statistical time: 2018.10.10

This reflects, to a certain extent, that the audience for privacy vertical public chain stories is becoming increasingly scarce.

In the past two years, there have been so many stories in the blockchain world. From breakthroughs in chain efficiency and cost to breakthroughs in practicality, we have seen too many options that may make the blockchain world better. Privacy is certainly a rigid demand, but it can also be added as one of the functions to these new public chains. Then why do people have to use these anonymous coins?

ZCash and Monero seem to be still focused on their own niche, while Dash has already planned its transformation.

In October 2019, Raico, 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 Dash does not want to be an anonymous coin, but a payment-type digital currency, Digital Cash."

Judging from its evolution process, Dash has indeed transcended the scope of DarkCoin and achieved many innovative applications in public chain scalability, developer incentives and community governance.

On top of the underlying PoW ledger, Dash has designed a masternode network with POS as the consensus mechanism, providing the network with functions such as currency mixing, instant payment, resistance to 51% attacks, and community voting governance, and allocating 10% of the block rewards to the "budget system DASH DAO", thereby achieving relatively decentralized and efficient development and construction.

As some industry insiders have said in their final words about privacy coins, “for tokens that want to reach the masses, privacy performance alone is not suitable as a core value proposition; but looking at the future of privacy, mainstream cryptocurrencies deploying privacy features may become the ultimate destination of the privacy field.

Pure privacy coins and privacy public chains seem to have no future. So what about a special asset that can be held?

In October this year, Ethereum token issuer Tokensoft and crypto custodian Anchorage launched wrapped zcash (WZEC), which is pegged to ZEC 1:1 (similar to WBTC pegging to BTC). In essence, it is aimed at ZCash holders, bringing ZCash as a pure asset to the Ethereum ecosystem for circulation.

Although at this point, ZCash's privacy transactions have disappeared and lost their original meaning.

Recently, there is some good news about ZCash - Grayscale has increased its holdings.

The AICoin index shows that on November 8, Grayscale ZEC Trust holdings increased by 3,534 ZEC, a 2% increase, reaching a total of 179,000 ZEC.

"Although Grayscale's increase in holdings is not large, it is already good compared to BCH, which has been reduced." Analyst Xiao K feels that ZEC's performance among the old mainstream currencies is still acceptable.

Over the past three years, the anonymous coin positions have gradually disappeared from Xiao K’s account. He can’t remember the last time an anonymous coin attracted attention.

Perhaps, two years ago, Grin based on Mimblewimble was welcomed by the market as a fresh stream because of its high degree of decentralization.

“I really hope that is not the last spring of anonymous coins.” Little K said leisurely while recalling.

References:

Zcash’s October Siege

In 2020, you should understand the two future trends of the privacy track