![enter image description here](https://upload.wikimedia.org/wikipedia/commons/thumb/2/23/Anonymous-Seal.jpg/1024px-Anonymous-Seal.jpg)


A new [article](https://bitcoinmagazine.com/articles/zcash-creator-on-the-upcoming-zcash-launch-privacy-and-the-unfinished-internet-revolution-1472568389) just appeared online from the creator of Z-cash. For all who do not know, Z-cash will be the first theoretically proven totally anonymous crypto-currency. There have been others which use sophisticated schemes like ring signatures, stealth transactions, coinjoin, or Tor, but these do not have the theoretical rigor behind them that Z-cash does. Z-cash is a complete anonymity solution which hides all knowledge about the transactions, including the values being transacted, and who the sender or receiver is. As a result, Z-cash is invisible value exchange.



Is it possible to be too anonymous?
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Invisible value exchange is definitely a double edged sword. You gain privacy which is extremely valuable in the digital environment where there is routine harassment and bullying of people perceived to have "too much wealth". At the same time this same technology which can protect a person from being bullied, can enable bullies to be bullies for hire, effectively turning electronic harassment into a trade or business. In the case where it is mercenaries for hire, something like Z-cash would allow a very wealthy individual to turn the tables on freedom fighters, activists, journalists, and developers, who get in the way of corporate or state interests.


So this technology is very much a double edged sword, a two way street, and whomever has the most money in Bitcoin today, may have the most to gain from something like Z-cash. **Note:** a lot of Bitcoins, DAO and other tokens have been stolen by hackers, and at some point this money is going to be spent or need somewhere to go. Z-cash with it's inteesting properties will be most attractive to blackhats and similar hackers who today might be using Bitcoin.


The problem with being totally anonymous
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If you are totally anonymous then you have no reputation. If you are pseudo-anonymous then you have a reputation. Money isn't really as useful without a good reputation attached to it and as a participant in society, Z-cash probably will not improve the social status of it's users. On the other hand, it is possible that Z-cash can over time adopt features which allow for pseudo-anonymous reputation to be attached to it, but if Z-cash develops a stigma around it then people who have good reputations could end up staying away from it and then it could end up being one of those currencies people are embarrassed to use in public.


The main problem I've identified with being too anonymous is if someone robs a completely anonymous person, the anonymous person has a great difficulty proving they were robbed. Z-cash gets this part right by offering up a concept called a "view key" which can be shared with others, so in this way if something does go wrong there is at least a view key which proves the transaction occurred from A to B. A quote from the article:

> . Only those with the correct view key can see the contents. Users have complete control and can opt-in to provide others with their view key at their discretion.


Giving the user complete control is a good design decision. This makes Z-cash much more practical, but will that be enough?

Privacy can improve security by offering confidentiality and access control
====

Privacy is a kind of access control and Z-cash provides a user with a greater ability to control access to their financial information. This is good for the security of users, but it is not the case that private by default improves security by default. Transparency can produce security as well and the important point is to know when it's better to be private and when it's better to be transparent, and this really depends on your situation. As long as the technology offers the users the ability to control their level of transparency by determining who can access what, then the technology empowers the users and can improve security.

What will law enforcement (FBI) think of Z-cash?
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The obvious question now is that if Z-cash exists, what is the FBI and other global law enforcement agencies going to do about it?  Politically it doesn't look good for the Z-cash technology ever achieving any kind of mainstream adoption. If the users of Z-cash are limited to the fringe, then they will easily be both socially and politically marginalized. Marginalized groups do not always get favorable treatment by society, and without mainstream adoption, the technology likely will be used as a pretext to further empower law enforcement under the guise that only the "bad guys" would be associated with a technology like Z-cash.  As mentioned before, social currency or social status is just as important as money, and if there is a social stigma put on Z-cash by law enforcement, politicians, and high status individuals, then it will probably be just another cypherpunk toy that the masses mock in movies as we see with Bitcoin.

Conclusion on Z-cash
====


Z-cash is a very interesting technology, potentially it has uses, but in the current political environment I would expect the positive uses to be overshadowed by the irresponsible uses. So from a researcher perspective, it's very interesting for sure, but from a practical or "investor" perspective, I do not expect it to catch on with the mainstream. If it doesn't catch on with the mainstream then it will be marginalized, and likely over time broken (compromised?) by the FBI and similar agencies just as Tor has been broken. Z-cash is a nice technological breakthrough that the world is not politically ready to accept or understand.

At the same time looking at the markets, I do expect Z-cash could get pumped pretty high as there is demand for it's utility as we see with Monero and Dash. Z-cash is the best technology for it's use case and going forward I do not see how Bitcoin will be able to continue to compete for the same demographic. 


References

1. https://bitcoinmagazine.com/articles/zcash-creator-on-the-upcoming-zcash-launch-privacy-and-the-unfinished-internet-revolution-1472568389
2. http://www.dailydot.com/layer8/government-contractor-tor-malware/
3. http://www.coindesk.com/europe-build-database-digital-currency-users/
4. https://bitcoinmagazine.com/articles/zcash-creator-on-the-upcoming-zcash-launch-privacy-and-the-unfinished-internet-revolution-1472568389