The Case for Zcash

On Friday, my latest piece was published on Seeking Alpha. That article focused primarily on Litecoin (LTC) and Grayscale's Litecoin Trust (LTCN). A large part of my thesis for holding Litecoin centers around the idea that crypto adopters will inevitably gravitate towards low-cost transactions in a peer to peer setting rather than relying on custodians. In this reality, Bitcoin's primary use case transitions to more of a reserve asset than a currency because of the fees associated with moving Bitcoin on the blockchain network. Bitcoin will be viewed as the savings vehicle while other coins will be viewed as the value exchange vehicles. Clearly, I believe Litecoin can survive and even thrive in a value exchange role like the one just described. If we accept the possibility that there could be a blockchain-based value exchange on a peer to peer network in the future, the next question becomes could there be a need for different variations of this peer to peer value exchange? In this article, we'll explore what I believe to be a critical function of value exchange that most cryptocurrencies will fail to deliver; privacy.

Zcash offers a solution

There's something beautiful about cryptocurrency and the ability to opt out of the traditional finance/banking system that gives me hope for the future. Imagine not needing permission to move your wealth around. Imagine not having to wait 2 to 3 business days for "funds to clear." Imagine not having to worry if your money is actually going to be there for distribution when you want it. This is what crypto offers the world provided the users hold coins on-chain rather than relying on exchanges and custodians. As wonderful as this financial disruption is, one of the biggest concerns I have regarding nearly every cryptocurrency is the transparency of moves on the blockchain. With a basic block explorer and some decent leads, it's relatively simple to find out what you are doing and what you own if you offer up the public address of your wallet.

Privacy coins attempt to fix this and I believe there is absolutely a place for privacy coins moving forward. The three most well-known privacy coins are Monero (XMR), Zcash (ZEC), and Dash (DASH). There are others, but in my estimation the three mentioned are the ones that have realistic staying power. Monero is incredibly difficult to acquire at this point. A lot of the popular exchanges don't support Monero. For instance, I have three crypto custodians that I do business with; Coinbase, Celsius, and Uphold. All three of them support Dash. Celsius and COINBASE support Zcash. None of them support Monero. This is an Achilles heal for Monero because even though it's likely the most private of the the three, it's the hardest to acquire. Zcash and Dash each offer both transparent and private on-chain transaction options. Private transactions on Dash will raise the network fee, however. Given all of this, Zcash seems like the best option for true user adoption from privacy seeking crypto holders. It has the right mix of accessibility and low cost transactions that Monero and Dash don't necessarily provide.

Now that we have our horse, will there ever actually be a market for a good privacy coin?

Underappreciated Political Setup

There may be some people who read this section and dismiss it as nonsense. That's fine. I want to be clear, this is not intended to be a statement about policy out of Washington or a statement about the scientific merit of COVID shots. All I'm going to say is if we read the situation and speculate on reactions to certain catalysts, we can start to handicap potential scenarios for future with mass adoption of privacy coins. Given the current climate regarding vaccinations and mandates, I think it's very possible that new value exchange rails are adopted by members of society who are forced out of careers and forced out of society in general. If we can look to Lithuania as the tell for what the powers that be want to bring to America in the very near future, we're probably going to see the fast development of an underground economy. Underground economies likely thrive better with private value exchange. Private value exchange is only possible with cash, coinage, and privacy cryptos.

Since it's a stated goal from certain political figures to "make life difficult" for unvaccinated Americans, if the administration doubles down on plans to put the economic screws to certain US citizens, what do you do after you've already made their employers fire them and they still don't comply and get the shots? Operation Choke Point shows there's precedent for the executive branch using the banking sector to wage war on political enemies. Could something like that happen again? Maybe its already happening. Two weeks ago PayPal (banned the FLCCC from using its financial services. Point is, I wouldn't rule out drastic measures from the White House in an attempt to stimulate more injection obedience. Probably even in the next 6 to 12 months. 

If that happens, I believe cryptocurrencies will probably catch a serious bid. Especially considering the philosophical profiles of many unvaccinated individuals. While I think the unvaccinated actually transcend traditional political party lines to a far greater degree than the mainstream narrative would have us believe, I do think many of these people are young and libertarian leaning. Trust me, it takes one to know one. Given this admitted assumption, I would wager there is a sizable overlay among the unvaccinated with people who are open to a different monetary system.

In my examination of the political climate, I decided there's at least a possibility that a large population of people might require a new way to transact value with one another. Cryptocurrencies moved on-chain, without permission from a custodian should help play a role in facilitating inexpensive transactions of value regardless of size. Maybe sooner than many realize. In a dystopian future where medical industrial complex heretics are cast out of society by the banking institutions and employers that cave to political pressure, the best chance people have at building out a new system for themselves is through private value exchange. To me, ZEC is the best bet for wider adoption compared to DASH or XMR. ZEC is much easier to acquire through standard on-ramps than XMR. Given the straight forward nature of z address selection over t address selection when transacting on the Zcash network, ZEC is easier to transact privately than DASH which requires PrivateSend to properly execute. This is largely my opinion, but I don't think it's an opinion that will be exclusively mine.

It's cheap

Another thing that makes Zcash so interesting for buyers beyond just the underground economy that it can help build is the fact that it's cheap. According to coinmarketcap, Zcash has a circulating supply market cap of just $2.2 billion. This would be roughly $1.5 billion below it's all time high from back in May. At a market cap rank of #61 overall, Zcash is worth 85% less than Shiba Inu ($14.3b).

Zcash is also barely above its all time low when priced in Bitcoin.

In closing

A cashless society should terrify people. A world with forced central bank digital currency should terrify people. The desire for privacy doesn't make you a criminal. Credit card history destroys privacy. Blockchain based transactions with full transparency destroy privacy. Cash is private. If you like being able to buy a bottle of wine without the state knowing about it, you should look into Zcash now before it becomes harder to get it.

Standard DisclaimerI'm not an investment advisor. Ijust share what I do and why. Please do your own research. I'm long Zcash (ZEC).

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