Naval Ravikant This week has fueled a great debate by claimingTo make Zcash (ZEC) “insurance” Opposite Bitcoin (BTC). The majority of the crypto community did not only agree: not only “insurance” The concept is limp, but the question is also how objective Navy’s approach, given the early Zcash deprivation and the industrial role. Let’s see what the problem is – and what it is worth filtering out.
“Insurance” Counter -rate graph
Naval showed a short ZEC graph that only selected a few weeks ago, with the price from $ 49 to $ 68. But the fact that something is in itself is not insured. The essence of the insurance has been contracted: it pays a fee under pre -defined conditions for a specific loss event. A exchange rate collection, on the other hand, does not guarantee anything and makes no direct connection with a damage. The “Only up” So graph is not proof of insurance – a maximum of a short, happy market movement.
Positive correlation, no protection
If ZEC was indeed an insurance against BTC, we would expect a negative correlation: if Bitcoin dropped, Zcash should rise (or at least hold). Instead, ZEC usually moves with BTC: when Bitcoin becomes stronger, ZEC also tends to rise and vice versa. In the meantime, the long -term performance difference is also talkative: ZEC is approximately 95% below the ATH (and ~ 80% in minus in his peaks in 2018), while Bitcoin has now put a freshly new historical peak. This photo supports the “Coverage/Insurance” Story for Zec.
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Power: Bitcoin vs. Zcash
At the start of Bitcoin there was no presale nor a set -up reward; In the early years it was literally a medal for money. The later increase in BTC introduced the theory of millions of percentage to these early participants.
Zcash, on the other hand, had an early investor circle, founders reward and electric coin company, which made early allocation and payments. Even if some early ZEC buyers received tokens at a very low price of $ 1-2, the long-term relative performance for the BTC will be left behind. Based “Defense” A device that is opposed to Bitcoin.
Suspicion of conflicts
Naval was an early investor of the Zcash project (Electric Coin Company) and is also known for the Association (Zcash Foundation). This is not in itself “shame”But it means a risk of interest: if someone is financially interested in a device, their recommendations and opinions can be distorted. Community criticism is now not only professional (insurance versus correlation versus yield), but also ethical: it must be treated transparently as a result of loud promotion.
Compliance culture versus Cypherpunk -roots
Bitcoin was invented at the time of the 2008-09 crisis to make it independent of censorship that is resistant to the state. Zcash promises a strong financial private sphere in principle “Protected” (Protected) with transactions, but in practice this is not the standard setting – the majority of traffic is still public. In addition, the project was funded by risk capital and it is strongly adapted to the legal expectations over the years (such as VasP-Screenings-Coyproviders’ Conformity Control-WHiterist payments, FATF recommendations). This is a disappointment for many users of the private sector, especially when measured on the Monero, where a private transaction is standard. That is why many have no zec “Cypherpunk” They see it as a VC-friendly compromise.
What can an investor learn from this?
- The loud explanation is not yet a product characteristic. A percussion tweet or an attractive short graph does nothing “Insurance”. Look at the correlation, the downward risk and whether there is a pre -recorded payment for a specific loss event. If not, it is not insurance, only exchange rate movement.
- The short time of time. Daily weekly graphs are easily misled. The real image is given by longer, multi -year time series based on which ZEC has so far understood compared to the BTC.
- Follow the financial incentives. Early allocation, founder reward, influence of investors, conformity restrictions can all deform the motivations of the actors. If someone recommends a device, it is worth asking: what kind of interest do you speak?
- Portfolio is a balance. As a “insurance” A tool that does not move with your most important exposure is to be a limited Down risk or pay wages for a specific event. An alt that usually waves the market as a whole rarely plays this role.
Essence: Naval’s statement sounds good, but neither the concept of insurance nor the co -movement and long -term performance of the ZEC -BTC. Zcash can have values and usage, but As a “Bitcoin insurance” Setting the misleading – and especially problematic if the message with personal financial interests is interwoven.
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