Zcash (ZEC) surges as Zcash foundation approves grant for ProgPOW (ASIC resistant algo)

In May this year,  a team calling itself Ifdefelse suggested a proposal to make Zcash GPU friendly, and eliminate the advantage that specialized ASICs have over commodity hardware. The proposal was rooted in the fact that for Proof-of-Work mining to be truly secure, the process of generating the next block has to be random and fair.  This is impossible when specialized miners have an advantage in generating blocks. This centralizes mining in the hands of a few players, and that is counterproductive to the security of the network.

After months of back and forth communication between the Zcash foundation and Ifdefelse, the foundation has finally approved funding for this proposal. The next step will be a hardfork to implement this algorithm. Here are the comments from the Zcash (ZEC) grants committee with regards to ProgPOW.

Proposed by the pseudonymous team “ifdefelse”. This team developed ProgPOW, an alternative proof of work algorithm aiming to be ASIC-resistant but GPU-friendly. Under this proposal (in its revised form), the team will integrate ProgPoW with Zcash, in the sense of releasing a proof-of-concept fork of the Zcash node software that uses ProgPoW instead of Equihash, as well as compatible open-source mining software and operating testnet. This will facilitate empirically evaluation of the difficulty and network behavior of such integration.

While not all committee members believe the notion of ASIC-resistance is an important one to cryptocurrencies, the committee gave submissions related to proof-of-work and ASIC-resistance the benefit of the doubt, judging these submissions under the assumption that the Zcash community is interested in ASIC-resistant developments.

Within this space, the committee sees the ProgPoW as having a high potential merit. We observe that ProgPoW is considered by many in the community as a promising alternative to classic proof of work, and an interesting variation of GPU-friendly ASIC resistance. We recognize the large body of work contributed by ifdefelse in developing an implementation of ProgPoW. We also observe that ProgPoW is being considered for use in Ethereum, with experimental integration underway.

We believe that the suggested prototype integration of ProgPoW with the Zcash code base will significantly further the ongoing discussion of potential PoW changes in ZCash, by demonstrating the technical feasibility, identifying difficulties, enabling experimentation with dynamics of hardness adjustment under various loads, and also — should ProgPoW be chosen for future Zcash network upgrades — reducing the time for developing that upgrade.

Thus, funding of this proposal is recommended. Moreover, we encourage the Zcash Foundation to support complementary efforts to independently evaluate the security properties of ProgPoW, within or outside the Grants program.

This is a big deal and will play a huge role in growing the Zcash ecosystem going into 2019 and beyond.  That’s because by making Zcash more GPU friendly, it will also make it more decentralized.  A more decentralized Zcash will also be more secure and more attractive to users looking to transfer value anonymously. Given that the privacy market is one of the largest for cryptocurrencies, it follows that this sense of security will drive more demand for Zcash in this market. That’s because Zcash already has a huge market presence in the privacy market, alongside Monero (XMR). As such, an increase in demand by users would have a positive impact on the long-term growth of Zcash (ZEC).

Implementation of ProgPOW will also drive up investor sentiment and play a role in pushing up its price. For some time now, Zcash (ZEC) has been criticized for having its mining heavily controlled by Bitmain. Implementation of ProgPOW will change sentiment and could draw in more investors into Zcash (ZEC). Zcash (ZEC) is already gaining faster than most top 20 coins, a sign of rising demand.  In the day, it is up by over 6%. This is an indicator that the market is responding positively, and once implemented, Zcash (ZEC) could experience an even bigger pump, that could trigger a bull rally.

Long-term prospects

Zcash (ZEC) is one of the privacy coins that analysts expect to perform well in the future. This Algo change makes these expectations even more plausible, now that bullish sentiment seems to be returning to the whole market. The probability of Zcash (ZEC) pushing above $1000 are quite high. That’s because, on top of these positive developments in its algorithm, Zcash (ZEC) also has a very low supply of 5 million coins. This means that if demand rises, buying pressure would push the price up fast, given that money would be chasing a very limited number of coins.

Nick Mwenda :