ZCash Community Greets Proof of Stake Proposal with Skepticism

  • New ZCash Improvement Proposal ZIP proposes move from current Proof of Work system to Proof of Stake 
  • Debate sparked by Tweet from Electric Coin Company CEO Zooko Wilcox 
  • Proposal reflects ongoing debates on environmental impact of crypto mining and lingering doubts surrounding Proof of Stake system economics and security 

In the last few days, a proposal from a member the ZCash community has sparked debate among users, developers and parties interested in the fortunes of the privacy centric cryptocurrency. The so-called ZIP (ZCash Improvement Proposal), submitted by a community member using the name rebekah31 proposes that its developers begin to look into a switch from its current Proof of Work paradigm to a Proof of Stake model

"As proof of stake is a little more mature and shielded transactions in zcash have come leaps and bounds," the poster posits, "we should be able to switch from proof of work to proof of stake without diverting developers too heavily away from other protocol-improving work."

However, when details of the ZIP were retweeted without comment by Zooko Wilcox-O'Hearn - CEO of the Electric Coin Company, which created ZCash and develops it alongside the ZCash Foundation - via his @Zooko Twitter account, debate over the future direction of the coin, and the efficacy of the two dominant cryptocurrency economic models, immediately ensued. 

The balance of the responses fell on the skeptical side, with several comments regarding the complexity of how that would actually work for the privacy focused coin were later retweeted by Wilcox-O'Hearn, potentially implying - though in no way expliticitly illustrating - he shared concern and welcomed the debate. 

One of chief concerns driving the shift - at least in the eyes of the person making the suggestion - is the environmental impact that Proof of Work mining has in terms of energy usage, with the motivation for the ZIP being stated as “not wanting to have ‘destroying the planet’ as one of zcash’s most prominent achievements.” 

Interestingly, it closely follows rebekah31’s only other ZIP proposal, that ZCash dedicate some of its Dev Fund to Carbon Offsetting . In that proposal, the poster suggests algorithmically using mining difficulty to apportion some of the newly minted coins in each block to a fund that would be donated to community chosen carbon offsetting companies. 

Proof of Stake still yet to prove itself

The environmental impact of Proof of Work algorithms, particularly that of Bitcoin, became a big talking point earlier in late 2018 and into this year, and it's a debate that continues to rumble on across the industry. On the flip-side of that, are lingering doubts about the workings of Proof of Stake systems, epitomised by Ethereum's almost tectonically paced move towards making a similar shift, with its long-touted 'Serenity' upgrade only now starting to appear on the distant horizon. 

Underlying many doubts, however, are stongly held beliefs among many crypto-community members of regarding the primacy of PoW as both an economic model, and a provider of intrinsic commodity value. Ethereum's problems in bringing Serenity off beyond the Testnet phase and to a useable 'Beacon Chain' appear to belie the idea that Proof of Stake is a mature technology, and will probably lead to more skepticism among the ZCash community than would allow a move like this to carry. 

Around this time last year, Wilcox-O'Hearn himself tweeted that he was impressed by the work being done on Ethereum's devs in the form of the Casper PoS system. However, since then, Ethereum has undergone close scrutiny regarding the internal debate the proposed changes have made and the speed (or lack of) in their implementation.

At the time many ZCash users also held the opinion that Proof of Work represented the most reassuring model to underpin the security features of ZCash, and that here was where the ECC and the ZCash foundation should focus its efforts. It's unlikely that view has changed dramatically.