The Surge of ZEC: Causes and Questions Raised by the BIP-110 Incident

[Block Media Reporter Ham Ji-hyun] An analysis has emerged suggesting that the recent surge in the privacy coin Zcash (ZEC) is influenced by concerns that Bitcoin has entered a stage of "protocol ossification," excessively resisting change. This comes amid the recent BIP-110 fork controversy that divided the Bitcoin community, reigniting the debate over whether Bitcoin's immutability is both an advantage and a potential weakness.

On the 18th, Eli Ben-Sasson, co-founder and CEO of Starkware, stated regarding the recent rise of ZEC, "Some Bitcoin supporters may not like this, but I have to say it: part of the rise in ZEC is due to the fear that Bitcoin has become too ossified." He emphasized that he is also someone who deeply cares for Bitcoin.

Ben-Sasson is a co-author of the 2014 paper "Zerocash," which laid the groundwork for Zcash, and is one of the cryptographers who pioneered zero-knowledge proof (ZK) technology. He has long argued that Bitcoin needs to adopt new cryptographic technologies to enhance privacy and scalability.

Last November, Ben-Sasson expressed hope that interest in ZEC would promote changes within the Bitcoin community. He believes that introducing OP_CAT (a feature that allows multiple data to be processed together in Bitcoin) and OP_STARK (a feature that verifies whether complex computations have been performed correctly with simple proofs) could enhance privacy, scalability, and quantum resistance using ZK technology. He particularly noted that the changes needed for OP_CAT are not significant, emphasizing that the core issue is whether the Bitcoin community is willing to accept them.

Some folks (Bitcoiners) won't like this, but I have to say it.

Part of the rise in ZEC is due, I think, to the fear that Bitcoin has become too ossified. I say this as someone who loves and cares deeply about Bitcoin.

There, I said it.

--- Eli Ben-Sasson | Starknet.io (@EliBenSasson) September 17, 2026

Zcash Founder Also Says "Bitcoin Cannot Fulfill Its Role as a Cypherpunk Currency"

Zooko Wilcox, the founder of Zcash, has also expressed similar concerns.

Wilcox criticized Bitcoin at the Consensus event last May, stating that it is no longer adequately fulfilling its original role as a "cypherpunk-level currency." At that time, Zcash presented wallet features to counter quantum computer attacks and long-term post-quantum transition plans, advocating for a more proactive strategy in changing the protocol compared to Bitcoin.

Such concerns have also been echoed among some Zcash supporters. Tushar Jain, co-founder of Multicoin Capital, recently stated in The Wall Street Journal (WSJ) that "Zcash is what Bitcoin should have been and what it was originally intended to be." He argued that as the public ledger structure of Bitcoin makes transaction tracking increasingly easier, Zcash inherits the financial privacy that early digital assets sought.

Barry Silbert, founder of Grayscale, has also expressed a similar view. Silbert predicted that Bitcoin would struggle to incorporate privacy features this year, suggesting that 5-10% of the capital currently flowing into Bitcoin could shift to privacy assets like Zcash and Monero. In May, he declared that "the era of privacy in virtual assets has begun."

The Winklevoss twins are also betting on Zcash. They invested $50 million in Cypherpunk Technologies, strategically accumulating ZEC. Tyler Winklevoss described Zcash as "one of the most important yet undervalued virtual asset projects in the world," highlighting privacy and decentralization as core values.

Tushar Jain, co-founder of Multicoin Capital, also stated in The Wall Street Journal (WSJ) this year that "Zcash is what Bitcoin should have been and what it was originally intended to be," emphasizing that Zcash can conceal transaction parties and amounts, unlike Bitcoin's public ledger structure.

The backdrop for these claims gaining traction includes not only Zcash's own privacy features but also governance conflicts occurring within Bitcoin itself.

The Dilemma of Bitcoin Revealed by BIP-110

A representative case of this debate is the BIP-110 fork incident that occurred last month.

BIP-110 was a proposal to change consensus rules to limit the recording of non-financial data such as images and texts on the Bitcoin blockchain. The intention was to restrict the recording of large amounts of data through Ordinals, BRC-20, and Runes, focusing Bitcoin back on its original role as a currency and payment network.

The Bitcoin community was sharply divided over this issue. Supporters argued that unnecessary data occupying block space could increase the burden on node operations and fees in the long run. In contrast, opponents contended that developers or nodes arbitrarily labeling transactions that paid fees as "invalid transactions" could undermine Bitcoin's censorship resistance.

Michael Saylor, chairman of Strategy, and Adam Back, co-founder of Blockstream, also opposed BIP-110. Saylor particularly pointed out that pushing for a consensus change that invalidates currently valid transactions to solve spam issues could set a more dangerous precedent.

Ultimately, BIP-110 failed to secure sufficient miner support. Nodes enforcing it created a separate minority chain that was effectively stalled initially due to a lack of hash power. At that time, the proportion of blocks supporting the proposal was only about 2.53%.

The controversy did not end there. Luke Dashjr, a Bitcoin developer who supported BIP-110, subsequently lost his BIP editor privileges. BIP editors have the authority to assign BIP numbers to proposals, merge them into the official bitcoin/bips repository, and list them.

Other developers raised concerns that he had conflicts of interest between his role as an editor and as a proponent of BIP-110. In contrast, Dashjr argued that this was an abuse of power by the Bitcoin Core side.

Among Bitcoin figures who opposed BIP-110, there were also concerns about subsequent actions. Jacomo Zucco of Plan B Network, while critical of BIP-110 itself, pointed out that the decision to remove Dashjr from the editor role was also a poorly timed decision. He argued that such actions could fuel claims that Bitcoin development is being centrally controlled by certain factions.

Is Bitcoin's Immutability a Strength or a Weakness?

The BIP-110 incident showcases both sides of the debate surrounding Bitcoin's protocol ossification.

On one side, some see the fact that a small number of developers or stakeholders cannot easily change consensus rules as a strength of Bitcoin. The logic is that to ensure the monetary policy and censorship resistance that have been maintained for over 21 years, the underlying protocol should not change easily.

On the other side, there are those who believe that this very characteristic could become a weakness for Bitcoin in the future. Even as new technical challenges such as privacy, scalability, and quantum computer resistance emerge, it would be difficult to add meaningful features without broad social consensus.

Delphi Digital also assessed Bitcoin's protocol conservatism as "both its greatest strength and its greatest weakness" in a report on Zcash last February. The analysis suggests that while it enhances stability and predictability, it may also hinder the ability to respond to new threats or technological opportunities.

In this gap, Zcash is taking a different path. While sharing many monetary characteristics with Bitcoin, such as the 21 million supply cap and proof of work (PoW), it is actively pursuing privacy features using zero-knowledge proofs and new protocol upgrades.

Recently, the surge in ZEC has direct catalysts beyond this narrative, including the expansion of institutional funds and investment products. Grayscale's Zcash product transitioned to an ETF last month, and recently, Paradigm co-founder Matt Huang publicly disclosed his investment in ZEC. As a result, ZEC surged by about 20% in a single day on the 17th.

Thus, it is difficult to attribute the rise of ZEC solely to Bitcoin's ossification. Coinbase Institutional also analyzed that the previous ZEC rally was driven by institutional investor interest, technical breakthroughs, and leveraged positioning, all contributing to the price increase.

However, Ben-Sasson's remarks indicate that the recent investment logic surrounding Zcash is expanding beyond a simple "revival of privacy coins" to raise questions about the development path of Bitcoin. If the BIP-110 incident reaffirmed that "Bitcoin does not change easily," the market is now beginning to ask how long that immutability can remain a strength.

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