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Gemini

The Bitcoin exchange founded by Tyler and Cameron Winklevoss, Gemini, will begin accepting deposits in ZCash on Saturday, May 19th, expanding their current offerings that include Bitcoin and Ethereum. ZCash trading will begin on May 22 at 9:30am EDT. Approvals will soon follow for Bitcoin Cash and Litecoin.

This expansion of the Gemini cryptocurrency exchange follows approval from the New York Department of Financial Services. Compared to other states, New York has among the strictest regulatory frameworks for digital currencies, under BitLicense. Currently, Gemini abides by regulations in 48 US states, Washington DC, Puerto Rico, Canada, Hong Kong, Singapore, South Korea and the UK.

We are not financial advisors, and you should seek the advice of a professional if you are planning a major investment. But we would expect that the listing of ZCash, Litecoin and Bitcoin Cash on Gemini will have a positive result in their prices and trading volume. Presently, ZCash has spiked in value with a high close to $320 on May 14, compared to a price of approximately $250 in the days leading up to this news, and a previous high of $310 for the month of May. ZCash had another peak in January, when it traded at over $763.

Cameron Winklevoss stated, “Our approval makes Gemini the first licensed Zcash exchange in the world. It also makes the NYSDFS the first regulatory agency in the world to supervise Zcash.” Indeed, Gemini should be commended for their ability to navigate the system in a way that provides consumers with another trading option. Unfortunately, such regulatory systems have the negative, perhaps unintended consequence, of creating a virtually impossible barrier to entry for new start-ups that lack the funds that exchanges such as Gemini are able to afford. When BitLicense was enacted in 2015, over a dozen cryptocurrency start-ups left New York State, creating an environment that is beneficial to monopolies. In this regard, having Gemini as another choice for these trading pairs, we can perhaps expect that Coinbase/GDAX will improve their service, or lower its price, or expand the number of coins available on its exchange, as a response.

Winklevoss went on to explain the privacy benefits of ZCash. As a privacy coin, it enables two parties to exchange ZEC coins anonymously, using a technology dubbed zk-snarks, for “zero knowledge.” Such technology may be utilized on a number of other blockchains, while maintaining the integrity of the data. This privacy feature of ZCash provides value to people in opporessed nations, as well as those who wish to exercise their natural rights to privacy. However, governments have a tendency to perceive privacy as a threat, and often enact AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations in response, thereby virtually eliminating a portion of the privacy value associated with ZEC, where it all but disappears once the coins are posted to an exchange.

All of the coins that will be offered on Gemini are in some way forks of Bitcoin, with added functionality such as the privacy features associated with ZEC. Dubbed the “Nakamoto Family Tree” by Winklevoss as a nod to Satoshi Nakamoto, the creator of Bitcoin, these coins were probably easier to integrate from a coding perspective than newer generation blockchains. In this way, we might be able to predict that other Bitcoin forks may take priority as additions to Gemini if such expansion were to occur in the future.