ZCash (ZEC) miners have for the last 24 hours been fuming about Bitmain’s decision to require KYC for anyone looking to purchase ASIC miners from them. The company will now require buyers to provide their real names and identity for purchases to go through. Since Bitmain is the dominant player in the ASIC market, it follows that whatever decision they take will have to apply, irrespective of whether their competitors do the same or not.
The reason why miners are angry is because this privacy information can always be used by governments against miners. It’s even worse that such KYC-requirement is happening with a company that is located in China, a country that is not famous for its openness and freedom.
Besides, for a privacy coin, this might not augur well with its core objectives. At the moment, most exchanges require KYC for investors looking to open an account. As such for someone looking for complete anonymity, purchasing a privacy coin from an exchange would not be the most viable option.
The best route for such people is through mining. Therefore, if Bitmain now retains the information of the person purchasing the miner, then the privacy of such a cryptocurrency would to some extent be compromised. After all, the government can always use that information to track such a minor for whatever reasons.
So what are the most likely implications of this move by Bitmain? The most likely implication of this move is that it could lead to a fork of ZCash in the future. Some time back, Bitmain introduced ZCash (ZEC) miners, and the community was not happy. There was a proposal to fork the network, and ZCash resistant, just like Monero (XMR). This move by Bitmain could reignite the fork debate, making it a high probability.
Then other implication is that the other ASIC manufacturers could see a surge in demand for ZCash miners. However, this could be temporary. That’s because most of them are based in China, and if by any chance Bitmain’s move is out of pressure from the Chinese government, then the other miners are likely to follow suit too. As such, a fork on ZCash (ZEC) could be the most possible direction for ZCash in the near future.
For ZCash investors, these issues have no bearing on the value of ZCash (ZEC). That’s because the requirement for miners to identify themselves has no bearing on the privacy aspects of ZCash (ZEC). If you are looking to make an anonymous transaction using ZCash (ZEC), no one can trace your transaction, even if Bitmain requires the miner to identify themselves. The issue is with miners and anyone looking to spend ZCash has nothing to do with it. ZCash still remains one of the best privacy coins out there. The fact that it is getting enterprise adoption by corporations like JP Morgan and is listed on major exchanges like Coinbase will drive up its value the long-run.