The launch of the much anticipated anonymous currency led to a trading frenzy yesterday with price reaching a dizzying high of more than $2 million per coin on Poloniex, the most popular altcoin exchange.
In what can only be described as absolute insanity, Zec’s price changed by hundreds of thousands of dollars in seconds on Poloniex. By comparison, BitMEX’s Zec futures went from $7,000 per coin, to $3,000 to $1,000 to only reach $7,000 once more, all within minutes.
Today, price has calmed slightly, but it remains absurd, with one Zec going for more than 7 btc on Poloniex while BitMEX futures offer it for “just” 1.3 btc, a gap of thousands of dollars. The reaction across the ecosystem has been one of amused bedazzlement.
— Tone Vays [#Unconfiscatable] (@ToneVays) October 28, 2016
— Tony Gallippi (@TonyGallippi) October 28, 2016
— Angelo฿TC (@AngeloBTC) October 28, 2016
I never thought I'd see day when people would line up to purchase a zero knowledge proof. #Zcash
— Emin Gün Sirer (@el33th4xor) October 28, 2016
No one can really explain why anyone would pay millions for one zec, nor can we verify such trade actually happened. It could have, just as well, been a display error or, perhaps, Poloniex thought to have some fun with their internal database, but the currency is in incredibly short supply and as good as non-existent at this point.
Only 100 zec have been mined, with another 300 to be mined today. It reaches more than 80,000 zec by the end of November, followed shortly thereafter by a very high inflationary schedule of 50 zec every ten minutes. Price, therefore, is likely to go far lower as the market is flooded with new coins.
Demand, however, seems robust, with Kraken and Bitfinex adding Zec trading at launch. Its main appeal is full anonymity, making it potentially highly attractive for darknet markets, especially considering the periodically congested bitcoin network.
During summer, a number of popular online drug markets added Monero because of its promises of anonymity. However, Monero can still potentially be traced, although to do so would be very complex and difficult. Zcash, on the other hand, makes any tracking impossible by using cutting edge high maths to not reveal anything whatever about a transaction, unlike any other currency in existence.
There have already been calls for a ban with some lawmakers putting forward a ban proposal at Italian’s Parliament. However, the cat is now out of the bag, but if yesterday’s trading action is any indication of Zec’s future, we are in for an amusing and bedazzling ride as the world comes to terms with a seemingly highly valued completely anonymous currency.
Image from Shutterstock. Chart from Poloniex.