Tim 🛡️🦓

Done a lot of thinking about zcash lately. In the end, what happened was simple: people learned that with private chains, it's possible for inflation bugs to go unnoticed. The theoretical exploit is really not a concern for anyone paying attention. What did do damage to the narrative is that, while explaining the Orchard exploit, it had to be said over and over: "We aren't sure whether there has been inflation in the Orchard pool." That was the damage. That's what I, and a lot of other people, have been thinking about. In the end, I think we will get over this and it will be in the past and Zcash will continue to thrive, simply because that lack of auditability is actually an inherent tradeoff in privacy. While it sounds batshit insane to say, "the supply could be maliciously inflated without us knowing," it is ultimately no different than saying, "bitcoin's consensus could be broken by a 51% attack," or "the supply of ethereum could inflate forever under the right conditions." There is a world of edge cases that people maintaining these systems are tirelessly working against. And, in fact, what we saw with Orchard was exactly what we want to see: the good guys found a theoretical exploit and patched it. Given the behavior of the Orchard pool since the Ironwood announcement the possibility that the exploit was ever actually used by an attacker is, for me, completely gone. The only thing that remains with us is that meme: if an attacker finds the right exploit, they could theoretically inflate the supply without anyone knowing. That's the privacy tradeoff. It doesn't mean that private chains are the only one with risks. It just means that this is their main class of risk. At the same time, I've come to really appreciate the features that Zcash has going for it: funds can enter and exit a shielded pool, so if you're ever worried if your funds are "safe" you can just exit the pool where they're transparent. While shielded, all your activity is completely private. While unshielded, you're completely safe from even this hypothetical attack. Moreover, after unshielding, your coins are effectively washed--like TornadoCash, but better. Shielding while active and unshielding at rest is actually a very effective and easy way to use the chain, if you want to be hyper-careful about this possible attack. Overall, Zcash is the best private money that we have. While it has not solved the inherent tradeoff of privacy coins, to me the value of privacy, the incredibly low chance of an exploit like this actually taking place, and the ability to preclude yourself from such theft by saying unshielded at rest, all add up to a great value proposition. This talking point has been beaten to death by everyone else, but considering the enormous attack on privacy that various European countries are launching against their people, the zeitgeist is very disturbing, and the need for privacy really will become more significant than ever.

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€10,000 CASH BAN. €1,000 CRYPTO ID THRESHOLD. PRIVACY COINS DELISTED. 🇪🇺 The EU just published the rulebook for 2027 financial surveillance. AMLR takes effect July 1, 2027. All crypto exchanges must verify identity above €1,000. Monero, Zcash, Dash banned from EU platforms entirely. Meanwhile: America proposes zero capital gains on Bitcoin held over 12 months. UAE licenses crypto banks under VARA framework. Europe sees crypto as risk to surveil. America sees crypto as asset to incentivize. Capital follows the jurisdiction.

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