[SOLVED] Early disappointments - Announcements - Grin
The sustainability of open source projects has been a long standing concern and that goes back decades. These concerns have come to the forefront of crypto recently.
Grin is a cryptocurrency launched in January that implements the MimbleWimble protocol, which was released by an anonymous person in a Bitcoin chatroom, and has some unique privacy features. It was highly
anticipated and had the approval of notoriously hard to please Bitcoin thought leaders. As a result of this, and the fundamental technological innovations, it was estimated that up to $100,000,000 of mining equipment was bought and deployed to mine Grin on the first day. That's not a typo.
Grin tried to have as fair of a launch as is possible today. They didn't have a pre-sale and didn't reserve a portion of the supply for themselves, like a lot of ICOs do. And now, despite all the money flowing into mining, Grin's core developers had to take to public forums to ask for donations to keep developing on Grin full time. It took a few public calls and a lot of crypto-media attention before one key developer's goal of €55,000 was met. Each one of those euros will likely pay for itself several times over in the value that this incredibly talented developer can provide to the network.
We saw the value of talented, dedicated developers this week when Zcash released details about a critical vulnerability (see below). Zcash funds its core developers through something called the "founder's reward" where 10% of the supply goes towards the Zcash company. The founder's reward is contentious and has angered some community members so much they forked it away to make Zcash Classic, which is identical to Zcash except it doesn't have the founder's reward. Several other projects have similar mechanisms.
Given how things have turned out with Grin, I'm inclined to think that this sort of funding mechanism might be the least bad choice for funding open source projects in the space.
The State of Ethereum 2.0
Some prominent members of the Ethereum community came together and interviewed all of the different Ethereum 2.0 implementation teams. They wrote up their findings here.
On the immaturity of tokenized value capture mechanisms
I'm going to be talking about tokens in healthcare on Monday and I came back to this piece. It's one of the best I know of on the topic of tokens. The author explores what value is, how it is created and captured, explains many different token models, and what their mechanisms for capturing value in tokens might be.
I take this article as a reminder of how early on it is in this space. We have some educated guesses and some data to work with, but we don't really understand how to create sustainable long term value with these tokens yet. The amazing thing is that we'll get to see hundreds of experiments play out in real time
as the many tokens created to date thrive or flounder.
Zcash Counterfeiting Vulnerability Successfully Remediated
Zcash’s team disclosed that they discovered a critical vulnerability in some kinds of their zero-knowledge proofs last week. This particular vulnerability was so subtle that it evaded detection by several expert cryptographers, engineering teams, and third party security audits. My understanding is that this would have let people create counterfeit transactions, leading to a sort of inflation of the monetary supply of Zcash beyond what is expected. That would be devastating for the public’s confidence in Zcash.
Nonetheless, it was discovered and fixed by the Zcash team in their last update. They found no evidence that this vulnerability was exploited and only an extremely small group of people (if my reading is correct then less than 15 worldwide) could have exploited it. Ironically, we won’t know for certain whether or not this was exploited for a long time as the privacy features of Zcash could be shielding evidence of exploitation.
To me this story served as a reminder that zero-knowledge proofs are a cutting edge, extremely sophisticated, and novel form of cryptography. The stakes for an exploit today are high ($~200m of value secured by Zcash today, other cryptos looking to adopt ZPKs soon), the actors relatively known (small groups of academics and engineering teams have the know-how to even attempt an exploit), and we don’t have any reason to believe there are vulnerabilities beyond the fact that zero-knowledge proofs are so new. But we should proceed with caution when implementing these in systems that can could potentially affect people’s lives.