Penguin FA — ZelCash ($ZEL)
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Circulating/Max Supply: 53,565,500/210,000,000
Mineable ✅
Masternodes ✅
Table of Contents
Overview
Zelcash is a Zcash fork that inherits its privacy and anonymity features. It will be used as the currency for the Zel ecosystem, which will have a masternode network that supports features such as a dApp development platform, dAppstore, ID system, decentralized exchange, and more.
An Ethereum That Works
The project was started when founder Miles Manley decided to leave the BitcoinZ team because he felt that their no-premine, no-ICO funding model was too restrictive and did not give them the resources needed to implement the ideas he wanted. He decided to start his own project, calling it ZelCash.
But what exactly does Miles plan to achieve with ZelCash?
He stated in an interview that he wanted to create “a working version of Ethereum…with a very high TPS” thus creating a “platform where dApps can easily be built, deployed, and operated”. To help achieve a higher speed and computing capacity, Zel is allowing anyone to join their network of masternodes that will supply the computing power needed to run their dApp platform. They are also planning to create a Javascript SDK so developers can easily create dApps on Zel without having to learn a new language like Solidity.
Currently planned/announced features for the Zel ecosystem include:
- ZelCore is currently a multicoin wallet with Windows, Mac, Android and iOS support. In the future it will also be the place where users can access other features such as ZelID, ZelPay, and ZelDex. (Currently running)
- Zel DAppStore provides a convenient place for ZelCore users to find Zel dApps. (Currently available on Zelcore, only shows ZelID)
- ZelID allows users to generate a Zelcore private key and log in using a more traditional username + password instead of a clunky seed phrase. It also features additional security with d2FA, faster login through biometrics, and message signing to verify that a particular ZelID is sending a message. (Currently working, limited to ZelCore)
- ZelDev will be a decentralized app development platform and will be the foundation on which the team will build ZelDex, ZelPay, ZelID, and their other dApps.
- ZelNodes will provide the computing power required to run ZelDev (Source released, Node rewards live on 23rd Feb)
- ZelChains will be sidechains running on ZelNodes that allow Zel dApps to scale
- ZelDex will allow users to easily trade coins that are supported by ZelCore without having to go through a central exchange
- ZelPay will be a payment system that will allow online and offline stores to accept all the cryptocurrencies supported by Zelcore
The Struggle for ASIC Resistance
ASIC miners are specialized machines created specifically to mine certain coins, allowing them to be much more efficient than miners that use more general purpose hardware like graphics cards or CPUs. However, ASICs are harder and more expensive to acquire than CPUs/GPUs. They are usually only manufactured by a handful of companies. This could easily lead to centralization, both in terms of control of a cryptocurrency’s network and accumulation of the cryptocurrency itself.
This is why many projects, including Zel, strive to be ASIC resistant and thus maintain decentralization. Zel is currently using the ASIC-resistant Equihash algorithm. However, in 2018 Bitmain decided to launch ASIC miners like the Antminer Z9 Mini and the Antminer Z9 that specifically targeted the Equihash algorithm, forcing Zelcash to adjust its algorithm as a temporary measure in order to maintain its ASIC-resistance.
Further work is still needed to solidify Zel’s status as an ASIC-resistant coin. They are currently looking into different possible solutions. One such solution is programmatic proof of work (ProgPOW), an algorithm that would be optimized for GPUs and make it harder for ASICs to gain an edge. The Zel Foundation recently offered a grant in November 2018 for integrating ProgPOW into the Zelcash testnet.
Token Economics
Zel’s total coin supply is capped at 210 million.
Each block mined generates 150 Zel that is currently 100% distributed to miners. On 23 February 2019, 25% of this block reward will also be split with ZelNodes.
This 150 Zel block reward is halved every 2.5 years, with the first halving scheduled to occur in July 2020.
11 million Zel (5% of total) was pre-mined and set aside for the ZelCash Development Fund. 7.9 million of this went to the Zel Foundation, 790,000 of which will be unlocked each year. The other 3.1 million went to the core team, with 50% of funds being unlocked each year over the course of two years. Core team members may also perform their own mining operations and run ZelNodes to acquire more Zel.
The Zel Foundation, founder, and core team’s Zel addresses can be viewed at the ZelCash blockchain explorer.
Until the maximum supply is reached, Zel will continue to be affected by inflation from block rewards, though ZelNode lockups may help offset this somewhat. Investors looking to accumulate Zel for the long term should keep this inflation in mind.
Token Utility
Zel can be used to send private transactions and pay transaction fees.
The block reward of 150 Zel is currently being used to reward miners.
Zel is required in order to create a Zelnode. Rewards will go live around February 23rd, 2019, when nodes will start to receive a percentage of the rewards that are currently fully going to miners. Requirements for the different types of nodes include:
- Basic: 10,000 Zel
- Super: 25,000 Zel
- BAMF: 100,000 Zel
A small amount of approximately 0.0002 Zel is required to set up and disable ZelID’s d2FA feature.
Zel will also be accepted in their decentralized exchange to pay for expenses like discounted trading fees and listing fees.
Future Zel dApps and other features released as part of the Zel ecosystem will also use the Zel token in some way.
Team
Miles Manley (Founder)
The founder and developer of ZelCash is only 16 years old! Having finished his GCSEs in mid 2018, he has since been working full time on Zel. Lack of working experience is definitely a legitimate concern in this case. His LinkedIn profile only has Zel listed on it.
His prior experience includes being part of the BitcoinZ team and some experience mining with GPUs back in 2016. Though an archive of BitcoinZ’s old website lists Miles Scribbles_MCAMK’s roles as Marketing and Accounting, Miles states that his role at BitcoinZ was actually more “focused on dev efforts and development of future ideas and concepts.”
Despite his young age, Miles has been able to gather a solid team around him. You won’t find a boy genius who can do everything on his own, but Miles does seem to be an intelligent young man with enough charisma and vision to convince some capable people to join his cause.
Lumi Ibishi (Developer and Designer)
Lumi graduated from LBS, a Swedish high school with courses in game development, game graphics, and graphic design. He also worked as a sales representative, technician, and consultant for MacForumAB, a Swedish company that distributes Mac computers. His design skills are showcased in the Zelcore wallet.
Tadeas Kmenta (Developer)
Tadeas studied at the Faculty of Nuclear Sciences and Physical Engineering at Czech Technical University from 2014–2018 and started working on Zel after leaving the university. His Github shows quite a lot of activity, with 590 contributions counted in 2018.
Daniel Keller (Advisor)
Daniel has been working with charities on information services and providing IT support since 2005. He also has a “fairly large mining facility”. Daniel advises the Zel team part time and often appears in interviews along with Miles. He brings some valuable life and business experience to a relatively young team.
Parker Honeyman (Community Manager)
Parker works as a medical device engineer and contributes to the Zel team part time as a community manager and project manager (Parker performs project management as part of his day job). He is highly active on the team’s Discord channel and can often be seen answering questions there along with Miles and Daniel.
Patrick Storchenegger (Legal Advisor) (Non-Core Team Member)
Patrick is the CEO of a Swiss international law and consulting firm and is part of the Ethereum Foundation. He helped the team set up their company, Zel Technologies GmbH, in Switzerland. With his legal expertise in the blockchain space, Patrick can help ensure Zel avoids any legal problems in the future.
There are also developers, mods, and other contributors that help with the project. Payments are given based on work completed rather than a monthly salary.
Overall the core team members do not have a lot of relevant blockchain programming experience or education listed on their Linkedin Profiles. The developers, particularly Miles, are relatively young. This lack of age and experience is somewhat offset by the experience brought to the team by advisors like Daniel and Patrick.
The team has also proven their programming ability somewhat by delivering a working product in the form of the ZelCore wallet and ZelID. Whether they can also deliver a fully working dApp platform and blockchain ecosystem remains to be seen.
Roadmap
So far, Zel has successfully:
- Established a registered company, Zel Technologies GmbH, in Switzerland since July 2018
- Created ZelCore, a multi-coin wallet that runs on Mac, Windows, Linux, iOS, and Android.
- Created Zel ID, a blockchain-based digital identity system that currently lets users log in to Zelcore with a traditional username/password and optional decentralized 2FA.
- Completed code for Zelnodes that will power their development platform with rewards set to launch on February 23rd 2019.
According to this interview, once the Zelnodes are up and running, the next milestones will be:
- Getting the ZelDev platform to run internally
- Creating the ZelDex decentralized exchange to allow trading of coins within Zelcore with no middleman
- Completing other dApps such as ZelID and ZelPay
No dates have been set for the longer term goal of opening ZelDev up for third party dApp development, but it will probably come after these goals are completed.
Will the team be able to sustain development long enough to achieve all their goals?
Miles states in this interview that instead of funding development by liquidating the team’s stash of Zel, he has tried to pay the team with mined Zel and his personal fiat. In an effort to make the project self-sustaining, the team will have to create more working products to get customers. Currently, the ZelCore wallet generates revenue in the form of listing fees. ZelDex fees will also help provide the team with more income.
Affiliate links for services such as server hosts and third party exchanges are also an additional source of revenue.
In the short term, it looks like the team is focusing on developing revenue-generating products like ZelCore and ZelDex to pay for costs. This is a more sensible approach to development that should ensure the project survives in the long term. However, this gives other blockchain platform projects a chance to release their own ‘working Ethereum’ to third party developers and establish a strong foothold in the market before ZelDev is fully ready.
Competition
Ethereum is the smart contract platform to beat. By being first to market, it has the advantage of brand recognition, more funds, and a whole host of developers and blockchain projects that are working to help improve it.
Yet it is clear that the current version of Ethereum is not scaleable enough to handle a large number of traffic and decentralized applications. Ethereum is working on fixing this issue with the Ethereum 2.0 ‘Serenity’ update. However the large number of projects already launched on Ethereum means that any changes they make will have to be backward compatible and thoroughly tested.
Zel was founded with the goal of creating ‘an Ethereum that works’. The project does not have Ethereum’s large developer community, brand recognition, or funding. It does have the advantage of being smaller and therefore more able to make quick changes. Zel also has privacy functions inherited from Zcash, which Ethereum does not currently have.
Pirl is an Ethereum fork with the goal of creating an all-in-one platform called Poseidon that will allow users to easily access all their features in one place. Zel is also working on “creating that one-stop shop for the crypto users”.
Features like ASIC resistance, ease of use, masternodes, an exchange, a payment gateway, and a dApp platform are all part of both projects’ plans.
Pirl received approval for incorporating their company in January 2019 and are working on getting a crypto to fiat exchange license.
Zel has already had their company established since July 2018.
Pirl currently has PirlTube, a decentralized video hosting platform, and will be working on creating a stable version of their decentralized content delivery network PirlCloud as well as their fiat/crypto exchange. A decentralized exchange is not their “main priority at the moment.”
Zel currently has the ZelCore multi-currency wallet with mobile support and an initial version of ZelID. They will be working this year on the ZelDex decentralized exchange, ZelPay, and a more complete version of ZelID.
Being an Ethereum fork, Pirl uses Solidity as their dApp programming language. Zel plans to develop a Javascript SDK for the ZelDev platform to allow programmers to work with a language they are already familiar with.
Overall these are both teams that have the same goal of creating an easily accessible and functional blockchain platform/ecosystem. This makes them close competitors and investors who are intrigued by the scope of Zel’s plans may want to check out the Pirl project as well.
For more in-depth coverage of Pirl, please refer to Penguin FA — Pirl ($PIRL).
Waves concluded an ICO in May 2016 for a blockchain platform that allows users to easily issue and exchange tokens. The Waves Client currently has a wallet, decentralized exchange, and a token launcher that makes it easy for anyone to issue their own token.
Zel currently has the ZelCore wallet and ZelID. Their decentralized exchange is the next product slated for development.
Waves currently has limited smart contract functionality via their RIDE scripting language. It is already available for Smart Accounts and Smart Assets. Expanded smart contract capabilities through RIDE for dApps should be arriving in 2019.
Zel’s ZelDev platform will be arriving only after the ZelDex is complete.
Waves has entered into partnerships and agreements with many notable entities. Some of these include Microsoft Azure, Deloitte and the Moscow Stock Exchange. Burger King even launched Whoppercoin in Russia using Waves, though it doesn’t seem to be used much.
Overall, both Zel and Waves have very similar goals, but Waves is much further along in their development. To catch up, the Zel team must find a way to utilize the computing power provided by their ZelNodes to create a faster, more powerful, and more accessible decentralized exchange and dApp platform.
Komodo is a multi-chain blockchain platform that already has several projects running on it. Its core developer James Lee has a solid proven record of delivering innovative new blockchain technology. This project has already released a lot of products and technology, including delayed proof of work, atomic swaps, assetchains, BarterDEX, and their multi-currency Agama wallet.
However, Komodo’s BarterDEX decentralized exchange suffers from low liquidity, and Komodo’s current offerings are not particularly friendly to non-technical users.
ZelCore is a much more beautiful, user-friendly wallet. With ZelID, users can access it with a simple username and password. Miles points out in an interview that “it’s quite difficult for your average user to use BarterDEX”. He states that ZelDex will have enough exchanges per second to “be a useable dex for once”.
BarterDEX is currently up and running while Zel’s decentralized exchange and ZelDev dApp platform still need to be developed.
Komodo has made much more progress and put out much more innovative code than Zel’s team has so far, but is not as user-friendly. On the other hand, Zel is more focused on being accessible to the average user and creating products that people can actually use, but still needs to do a lot of coding to catch up to Komodo.
For more in-depth coverage of Komodo, please refer to Penguin FA — Komodo($KMD).
Lisk concluded an ICO in March 2016 for a blockchain platform that would use sidechains for scaling and feature a Javascript development SDK. This is very similar to Zel’s ZelChains and promise of a Javascript SDK.
Lisk’s team has many more members with relevant experience/training than Zel does. Yet development has been painfully slow. Microsoft Azure made an announcement in March 2016 that they would be working with Lisk, but Lisk dropped out as they “still need to work on the technology”. Their Alpha-SDK, initially scheduled to launch in Q4 2017, is still not ready as of February 2019.
Zel was launched in January 2018 but has already released working products in the form of ZelCore and ZelID. Once they complete ZelDex, they should be able to shift their focus to releasing their ZelDev platform and Javascript SDK to third parties.
Lisk’s team is focused on developing their blockchain platform and should hopefully be able to release a fully fleshed out, stable working product before Zel’s smaller team catches up.
Zel’s founder Miles has stated that Lisk’s delegated proof of stake model makes it more centralized than Zel’s model of allowing anybody to set up their own masternode.
Check up on Lisk’s development on their official Development Roadmap.
Conclusion
Zel has a relatively young team with an idea for a complete blockchain ecosystem that will be promising if they manage to execute it. Founder Miles Manley, though young, has a very practical approach to development, preferring to first develop quality working products to generate revenue in order to fund the project and make it sustainable.
The team have proven themselves so far with the high quality ZelCore wallet, but this does not automatically mean that they have the skills to create a good decentralized exchange and dApp platform with Javascript SDK. It is also entering a space with many competitors, and will have to work hard to distinguish itself.
That being said, Zel’s focus on creating something that works properly and is accessible to the average user could be the unique factor that convinces users to adopt Zel over other platforms. Being able to combine/iterate existing ideas and technologies into a new product that people will actually want to use is nothing to laugh at.
Interested investors should download the ZelCore wallet to see if they like what Zel has done so far. If you like what you see and believe in the team, this is a project that still has a lot of potential and room for growth.
Recommended Resources
Interview with Founder Miles Manley and Advisor Daniel Keller:
Interview with Founder Miles Manley:
ZelCash YouTube Channel (Team Meetings, Announcements, and Discussions):
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