The cryptocurrency zCash (ZEC) was offered based on a misguided interpretation of what Bitcoin was meant to be. Confusing privacy with anonymity, the developers created a system that allows for zero-knowledge proofs, meaning that senders, receivers and amounts are kept completely private. While it has become somewhat more open, allowing configurable transparency to appease exchanges and wallets that don’t support anonymous tokens, its business model is flawed and will have a difficult time surviving as more regulations for the cryptocurrency industry are introduced. This may be part of the reason that the company behind the coin, Electric Coin Company (ECC), is seeing significant financial losses.
According to a self-titled “Transparency Report” for the first quarter of 2019, which was just released (in pdf) last week, monthly expenses at the company were around $635,000, “including employee compensation paid in ZEC at the Q1 […] price of roughly $55.” This compared to income of around $449,000 for the same period, pro saw its holdings increase, though, explaining, “The company’s first quarter ending amount of USD and Zcash was approximately $5.2M. The company currently holds approximately $6.4M worth of USD and Zcash.”
ECC explains that the funds received were used “to develop and support the Zcash technology and community. ECC’s three strategic priorities are to drive adoption while maintaining quality, invest in the team, and increase openness and collaboration. Our actions are aligned to those priorities. The activities below included work in the first quarter of 2019. In some cases, we reference work that was since completed but in progress during this time period.” Those activities include research & development, engineering and education.
The performance numbers may have just been made public, but the company obviously keeps its finger on the financial pulse at all times. This past July, Zooko Wilcox, the CEO of ECC and co-founder of ZEC, penned a Medium post about possibly having to reach out for more investment funds, or look for other ways to gain greater stability. The digital currency also suffered a minor setback in the middle of August when it was announced that, because of Brexit, Coinbase decided to drop its support of ZEC.
The Genesis protocol upgrade on February 4, 2020 is a monumental step in the history of Bitcoin, and will see BSV returned as close as possible to the original protocol as envisioned by Satoshi Nakamoto. Visit the Genesis Hard Fork page to learn more.
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