The freewheeling Bitcoin that operates without central authority, isn’t pegged to any currency or commodity, and is subject to wild fluctuations in value has a polar opposite in the digital currency world: Zen.
Sort of the anti-Bitcoin, Zen touts itself as the stable digital currency, tied to the performance of 22 international currencies. The money supply, which is managed by a democratic organization, can be regulated to curb inflation and deflation.
Zen is a product of Zurker, a crowdfunded social platform. A competitor to Facebook, Zurker distinguishes itself with a co-op label, meaning its users are also the owners of the social platform. The top search results for Zurker, which launched last year to much skepticism, question whether this social network is a actually a scam. In April, Zurker launched Zen, making it one of the newest arrivals in the digital currency world. For now, Zen can only be spent on Zurker to buy vShares, or a stake in the company.
A basket of 22 currencies
Self-described as “an unbiased elegant solution which nonetheless reflects market conditions,” Zen is pegged to a basket of 22 international currencies. This setup means the currency is stable (hence the name) — compared not just to the notoriously volatile Bitcoin, but to other individual currencies, such as the US dollar. The 22 freely floating currencies include the US dollar, euro and Philippine peso (see full list here).
While Bitcoin transactions can take upwards of 10 minutes to confirm, Zen transfers can be validated in seconds because there’s no need to check against double-spending.
Centralized and decentralized
Zen has both elements of centralization and decentralization. The currency is overseen by a “transparent democratically managed organization with open-book accounting,” which is empowered to regulate the money supply to prevent inflation or deflation. Anybody is free to join and become a member of this organization.
Systematically, Zen is designed to be centralized. Wallets can be stored by third-party apps. Agents can act as banks, holding accounts on behalf of users. Holders of the currency can also create their own private bank-like accounts. With the Zen API, users can also create wallets, issue and verify vouchers, transfer Zen and check exchange rates.
Unlike mining for Bitcoin, which is so resource-intensive that it can cost upwards of $150,000 in energy costs each day, Zen is issued in exchange for legal tender. To get hold of this currency, people can purchase it from authorized agents, from other Zen holders or by referring friends to Zurker. While Bloomberg calls the Bitcoin mining process a “real-world environmental disaster,” Zen describes itself as possibly the greenest currency, since it doesn’t require paper, metals or extreme processing power.
More to come
A lot of details surrounding Zen are still being sorted out. The body that manages Zen is in the process of drafting a constitution and developing the mechanisms that govern the currency. To encourage people to keep their money in this alternative currency, there are also plans for Zen banks to offer high interest rates. While Zen can only be spent on Zurker at the moment, a Zen marketplace encompassing a wide range of goods and services is in the works.