Zcash is preparing to rugpull the world of Equihash mining, where many people have huge investments in ASIC mining hardware to mine ZEC via Proof-of-Work. I actually thought it was a joke at first, but no, Zcash is serious about becoming Proof-of-Stake instead of Proof-of-Work!
Zcash transitioning to Proof-of-Stake is a huge conflict of interest between current large investors (whales), Zcash Company (Electric Coin Company), Zcash Foundation and small-time "average" investors and miners. As the simplest example, Zooko is reportedly paid his CEO salary in ZEC, to the tune of 2000 ZEC per month. If and when ZEC goes to PoS, he can then also stake his funds to earn more ZEC in addition to his already ridiculous monthly salary. His monthly salary is more than most startup CEOs earn in a year! It's a direct conflict of interest. The same goes for everyone who currently receives any part of the 20% Dev Tax AKA Founders Reward.
As the next specific example, let's take Daira Hopwood, Lead Developer of Zcash. They recently said:
The carbon footprint of Bitcoin & other proof-of-work cryptocurrencies is an inherent design flaw that must be addressed as a matter of urgency. Cryptocurrencies like Ethereum are moving to proof of stake; this is a feasible change from a technical and security point of view
which makes it obvious they think Proof-of-Work is evil and would prefer ZEC to be Proof-of-Stake. Isn't that very convenient? It also happens that they receive a large amount of the 20% Dev Tax. It's undisclosed how much, but they are potentially one of the largest ZEC whales, behind venture capitalists. Seems like a huge conflict of interest for the lead dev to want to move to PoS, at least to this simple developer.
And last but not least, in terms of conflict of interest, is the venture capital who invests in Zcash. There are many, but let's talk about the Grayscale Zcash Trust which as of this writing manages $51.6M USD of ZEC. If ZEC changes to Proof-of-Stake, they stand to be one of the largest benefactors, as they will no longer need to buy more ZEC to maintain their percentage of ownership of total supply. Their existing holding will compete with miners if Zcash adopts a hybrid PoW and PoS like ETH, or if Zcash goes full 100% PoS they will dominate all the staking on the ZEC network.
So the age old question I ask is: Cui bono? To The Beneft Of Whom?
The overwhelming evidence is that Zcash insiders, such as the CEO, Lead Developer, venture capitalists and people who receive funds via the 20% Dev Tax stand to gain the most from Zcash going to PoS. The average miner, who has spent capital buying hardware and paying electric bills for almost 6 years, will be left out in the cold. Also, depending on how the PoS is implemented, only investors with a certain minimum amount may be eligble for staking, which means it also hurts small-time investors to the beneft of the largest investors.
Is there any good news? Why yes, there actually is. When Zcash decides to screw over all their existing ASIC miners, those miners will need to go somewhere else. At best, their profitability will collapse if ZEC uses a hybrid PoW/PoS model or at worst, the ASICs will become completely useless for mining ZEC. Thankfully there are other coins that can be mined with these ASICs, which also use the Equihash (200,9) algorithm. For example, if PoS comes to ZEC, than all that formerly ZEC hashpower will migrate to coins like ZEN and HUSH as well as a few other coins which use the algorithm. You can research this further on What To Mine.
HUSH is dedicated to staying Proof-of-Work, so miners who invest in hardware can be sure they will be able to mine HUSH for years to come. We believe that the only truly decentralized way to secure a cryptocoin network is via turning energy into hashes. We believe Proof-of-Stake is essentially an elaborate scam, an implementation of the "real life bug" of "The rich get richer". If you would like to learn more about HUSH mining you are cordially invited to our miner Telegram group.
-- Duke Leto