Posted in Cryptos on October 29th, 2016
The following article covers a token or element in the cryptosphere. The cryptosphere is new and exciting, but changes rapidly and often in ways that do not benefit users. By the time this article is published, changes may have already occurred. Most tokens in the cryptosphere are complete scams that are get-rich-quick-schemes for insiders. Often, we cannot know this beforehand and only later discover this. A person should only trade with money that they’re willing to lose because losses are guaranteed. If you choose to participate in purchasing a token in the cryptosphere, you should do so with the full expectation of a loss and you should also expect it to change in a manner that does not benefit you. There are very few good ideas in the cryptosphere. Finally, by reading this post, you agree that you’ve read our disclosure.
“A fool and his money are lucky enough to get together in the first place.” ~ Gordon Gekko
In the last 24 hours, there have been hundreds of questions about Zcash, which makes some sense in the context of it trading over 1 million USD per 1 Zcash at one point.. Students in our course will get another look at Zcash, trading and cycles like these, which I won’t discuss in this brief post. Let’s look at some facts first and then discuss my view of these realities.
Yesterday, we saw some fractions of Zcash selling in the millions of dollars. This is not a misprint – people were willing to let go of bitcoins at a rate of over 2000 bitcoins per 1 Zcash. Before anyone accuses Poloniex or the founders of Zcash of a scam, we must remember that market participants were willing to pay this rate – a market is simply where buyers and sellers meet. If a buyer puts in a buy order for 1 ZEC at a price of 2000 BTC, we can all think he’s crazy, but he’s willing to pay that rate and it’s his decision. Do I believe in warning people that they’re overpaying? Yes, and if you read this blog, you’ll know that we’ve precisely warned on hyped events, while also being almost exact about discounted events. No one over the same period of time has been as accurate as our predictions, which is why we’ve stopped doing them publicly, since no one reads or shares our content.
There are two basic arguments against Zcash: lack of infrastructure and untested. Zcash is new and has no infrastructure. No matter what you think about it, these are two majors blows because if you’re paying 1000s to get access to it now, you are ignoring that it may take at least a year – and probably much longer – before anyone actually has infrastructure ready for Zcash. We fully expect Zcash to fall in price due to this reality.
From a privacy-currency supply standpoint, Dash is still rarer than Zcash in the long run, just like Dash will be rarer than Monero or ShadowCash in the long run. However, no crypto-token is rare enough to justify a $5,000 or $10,000 price because none of them will exist in 100 years. I’d say the same is true for any technology stock – at some point, competition has an advantage. If you believe that Zcash is worth several million US dollars or Euros, goodluck. If you think Zcash will remain in the thousands, you’re headed for disappointment as we expect that Zcash will be below $50 within a year.
As for Zcash possibly being the second major cryptocurrency behind bitcoin in the long run, this should be welcome if this is true – but it has no infrastructure and it’s not been tested, so no one can say this.. You may remember that we warned readers hat Ethereum is solving a different problem than bitcoin, thus it’s not comparable to bitcoin. Ether is not competing with bitcoin. Zcash is. I believe competition strengthens markets, so bitcoin having a strong competitor, like Zcash, will only make both better. After having written that, it’s possible that markets finally realize that Ether was never and will never be the competitor to bitcoin. Zcash could be number two for a while – it’s impossible to absolutely know where it will be in a year, or if people will lose interest. Zcash is solving a problem that’s already been solved (Dash, Monero, Shadowcash, etc), so they’re late to the party. Even if they later catch up completely on privacy, these other cryptocurrencies are two steps ahead of them and are working on the next innovation. People will eventually see that we’ll be right, just like our other predictions have been right. However, we lead, markets follow – so what we know now, you’ll eventually know.
One final warning to readers: Zcash has proved that not all journalism and information are equal. The reason you’re enamored with Zcash right now – the worst time of all – is because the information you’ve been fed is misleading. You are not reading people who are equal to us. You’ve been warned. Future content of this type will only be available in paid content – we don’t write for free.
The bottom line is that there is a low probability that Zcash is worth thousands of bitcoins at this present time, and it’s very unlikely that Zcash will be able to sustain the price of over 5 bitcoins over the next year.