ZCash (ZEC) promised to be cryptographically protected, anonymous magic internet money. The coin arrived to the party relatively late, with a high-profile launch in 2016. Immediately, the hype and the bull market took ZCL prices to the equivalent of nearly $6,000, with the claims of displacing Bitcoin (BTC).
But ZEC quickly saw trouble. Here are the five biggest problems for the ZCash project:
Founders’ reward: The biggest contentious issue was the fact that the developer team instituted a founders’ reward, which went on to support early investors, developers, and the Electric Coin Company, an entity aiming at popularizing ZCash and related projects.
The reward took a cut of each block reward, for a period of four years since the start of mining. In the end, Zooko Wilcox, the project’s co-founder, and the team plus investors, would end up holding about 10% of the entire coin supply. But what angered investors more was the personal reward of Wilcox, which is 2,033 ZEC, worth as much as $300,000 per month at one point.
https://twitter.com/roryhighside/status/1159013376791420928
The reward and its rules sparked speculations that the relentless selling pressure on ZEC was caused by regular liquidations to fund side projects.
Calling for More Funding: A recent call was made to extend the founders’ reward, which expires in early 2020. In a lengthy thread, the community discussed opportunities to keep rewarding the Electric Coin Company, creating more potential problems with liquidations.
Brand name disagreements: The ZCash brand is facing disputes between the ZCash Foundation and the Electric Coin Company. There is no current agreement, and the community will have to propose a solution for the handling of the brand and the future of the project. The potential to privately steer a blockchain project is unsettling and adding to the worsened reputation of ZEC.
Delistings: ZEC is also difficult to handle for exchanges. The coin is creating a series of problems - firstly by being anonymous, thus creating problems with transparency regulations. But secondly, there is talk that ZEC may be problematic due to its fundraising and centralized nature. This led to a recent delisting of ZEC from COINBASE UK, and CEX_io.
https://twitter.com/peterktodd/status/1167520793040969728
Price weakness: At one point, ZEC looked promising. The price action was both a cause and an effect of the shaky reputation. ZEC was pushed to large-scale investors, but failed to perform on exchanges, despite rapid and enthusiastic listings. ZEC currently trades at around $45.15, down from above $250 in the summer of 2018, and far from the $760 peak reached at the end of 2017. The coin gives no hopes for improvement, for now, and the internal conflicts are pointing to ZCash becoming one of the riskiest projects in 2019. Despite the relatively low price, choosing ZEC now may mean even greater losses.
