The distinct characteristics of cryptocurrencies grant tokens the ability to operate various functionalities in the digital network. While currently lacking network interoperability, which diminishes the total utility of blockchain technology, demand for ecosystem differences is increasing.
Monero belongs to a different type from other early cryptocurrencies like Bitcoin and Ethereum. The goal of each token is unique. While Ethereum focuses on providing a smart contract platform and Bitcoin on facilitating P2P transfers, Monero’s main aim is maintaining transaction privacy.
Monero: A Shining Privacy Star
When the IRS went above and beyond to “hire” white hat hackers to trace Monero transactions, it helped heighten interest in the cryptocurrency. Currently, Monero is the largest privacy coin by market capitalization, and according to Barry Silbert, CEO of Digital Currency Group, privacy coins such as Monero will be alluring for investors. Heightened privacy contributes to a “fair and open economy” that builds on blockchain’s initial promises.
Monero and other privacy coins could be a catalyst for shifting the focus back toward the notion of decentralization. Since Elon Musk has managed to heavily impact cryptocurrencies’ prices with his “statements,” privacy concerns might come back into the spotlight.
Riccardo Spagni, a former Monero core developer, emphasized that both governments and people want privacy. However, they frame it as a bad thing due to the lack of control governments will have on people’s data and activity. Privacy, according to Spagni, doesn’t mean a fight against three-letter acronym institutions but rather a battle against any bad actors.
Monero’s recent surge in price comes from positive sentiment toward cryptocurrencies with a solid foundation that pioneered the first crypto landscape. Launched in April 2014 as a hard fork of Bytecoin without VC funding or pre-mine, it gained popularity because it leaves no trail for both senders or receivers.
Members of the Monero community advanced the idea of adding it as a payment method on Tesla. However, Tesla’s detachment from Bitcoin means Monero could face a similar fate as it uses a Proof-of-Work consensus protocol. Still, Monero has gained traction in terms of becoming more accepted as a payment method. According to Cryptwerk, the number of merchants worldwide accepting Monero rose by 31 to over 950, while 208 offer discounts or special offers for using XMR.
Monero’s network has seen an acute rise in popularity in the past year as it moves closer to mass adoption. The number of transactions grew from 10k to 23k. According to Justin Erenhofer, that means that Monero had 82 times more transactions than zCash and DASH combined. The increase in transactions and adoption across markets was reflected in Monero’s price, which surpassed $500 for the first time in the past three years.
On the Flipside
- Exchanges are delisting privacy coins as their stature and perception in the market comes under scrutiny.
- Future ransomware requests will be made through Monero instead of Bitcoin due to “privacy transaction concerns.”
- Monero is attracting negative comments from regulatory bodies due to its privacy features.
The Core Of Disrupting The Financial Sector
Disrupting centralization in a world dictated by a lack of transparency was the main argument for cryptocurrencies. Decentralization and ownership have converged toward greed for expanding wealth as Bitcoin has broken previous price records. Bitcoin’s ability to maintain anonymity is limited compared to privacy coins such as Monero. Recently, Elliptic has continued their investigation into the Bitfinex hack, which occurred in 2016, where billions were subtracted from the exchange’s wallet.
Former CIA director Michael Morell has emphasized that data shows that the use of cryptocurrency in criminal activities is exaggerated. However, Bitcoin and Ethereum transactions can be easily tracked from one address to another. By contrast, privacy coins embed a fungibility protocol to maintain the transfer’s secrecy, thus bridging a bigger gap in decentralization efforts by “obscuring identifying data.”
The core premise of privacy protocols and coins such as Monero is not overstated; however, it has been scrutinized recently due to policy changes. As more regulatory amendments are put in place for cryptocurrencies, coins such as Monero will enter a limbo zone. Additionally, a report by Quadrennial Global Trends highlights that “privacy will disappear.” In that scenario, coins such as Monero will have additional value as the world pushes for more digitization.