This is an open love letter to Monero (XMR).
Introduction to Monero (XMR)
https://getmonero.org/ (no, really that’s the official site, “get monero”)
Monero is a coin that is fundamentally, from the ground up, private. And that means hard, inbuilt, default privacy. Many people are still under the illusion that BTC is private, which it is not.
You can read a description in almost layman’s terms from Alphabay’s forfeiture complaint pdf here (p. 12 (opens to a new tab))
Why does privacy matter then? That is a topic worth its own post, but let us just assume for the sake of the article that it does. Or at the very least, let us assume that it matters to large enough number of people to affect the market price. So whichever way you look at it, it matters. Some crazy folks even included the right to private life to the 1948 Universal Declaration of Human Rights (Art 12).
Monero is Esperanto for the word “money”. I have to admit that my first impression of Monero was a negative one. Simply because of the name, nothing could sound scammier than a coin called “money”. “Hello, we have this new coin called Money, it’s really good, wanna buy?” Though in all honesty, the devs never ever shill or pump XMR – XMR even has a slogan “don’t buy monero”, which is to say that do not speculate on it, use it when you need anonymity. They just focus on the tech. They even get their funding from the community. Which is an honest and brilliant way to go about that. I respect that as an ideologue.
However, as I also identify as a Crypto Chad, I want to make more BTC’s (or, due to necessity, fiat.) So what the hell makes XMR worth owning?
The tech that Monero is based on is multilayered.
- Ring signatures – The sender remains private with the passive mixing of transactions
- Stealth addresses – The recipient remains private
- Ring confidential transactions – The amount sent is private
- Distributed consensus – No central party (but this is pretty much given with cryptos, worth mentioning anyway)
So in short, maybe some amount was sent to someone, maybe not.
All this together creates the effect that XMR is also fungible. Fungibility simply means that each XMR is no different from each other, the units are interchangeable. Think of gold. One gram is equal to other grams of gold. Whereas BTC is not truly fungible, since if there’s a hack, or an old fashioned highway robbery, the amount can be followed on the ledger and for example, blacklisted from exchanges. The bitcoins would be marked as “dirty money”, that need laundering. BTC mixers do not provide real anonymity either, at least unless there are several layers on top of the actual mixer. That naturally requires trust in a third party.
The real question is “is it anonymous or almost anonymous”. I am a binary thinker in that sense, anonymity which can be revoked is not anonymity. I do not have a problem with the possibility of removing your cloak of anonymity, if you so desire. When the devs, core, whoever, can do it for you, you know that you are in fake anonymity zone.
There have been concerns that users could be located through their transaction IP’s, but the only thing revealed is that the user is running a Monero node. This is almost trivially easy to hide with the use of a VPN or TOR. However, this is a known deficit in XMR.
The team is also releasing Kovri update “soon”, which will take care of that. More on that in a bit. So for now if you don’t want your ISP to know that you are running a Monero node, you should use a VPN. You should probably use a VPN in any case.
Weaknesses of XMR include cost of the transaction, problems with transaction sizes and scaling. However, as the goal is privacy these can be fixed on a layer 2 solution. Layer 2 solution cannot convincingly fix defects in anonymity on layer 1. It only goes one way. At this point this layer 2 solution is just theoretical, so those weaknesses are still quite actual.
As for the non-anonymity fundamentals:
- No premine, no founders fee, no nothing – pure community effort
- Protocol updates are hard forks, so don’t get scared the first time you hear of them. It’s nothing like BTC hard forks. These are regularly scheduled. Everyone upgrades their software and keeps mining the new chain, no conflict.
- Block size scales dynamically.
- Very steep initial emission curve, which is linear (as opposed to exponential for fiat)
- That is to say that there is inflation, but to a negligible degree
- This also means that it is very probably unevenly distributed, but there is no way to really know that. Good thing is that XMR is widely used, not only traded.
Inflation under 1% is nothing, especially as it diminishes year by year. From my understanding, it’s meant to cover XMR lost due to human error.
Other privacy coins
aka to crush your enemies, to see them driven before you, and to hear the lamentations of their devs
As anonymity is valuable, there is competition. XMR’s main rivals are:
In my mind ZEC’s problem #1 is the fact that the anonymity requires trust. Even conceptually, what the hell? “You don’t want to trust anyone? Cool, I got the solution for you. All you need to do is… Trust me.” Not a very sound proposition. Even with the most bona fide interpretation, it’s still at least a backdoor.
The team promised, with hands on Bible and with scout’s honor that they destroyed the cryptographic keys which are the cornerstone of the algorithm. However, I barely trust my own mother. And even her I wouldn’t trust with my crypto. So I’ll pass. Add on top the fact that ZCash is based in the US of A, which does not, hand on Bible, spy on its own citizens. Double pass.
ZEN is a fork of ZCash.
Zencash has pumped this week following a recommendation by the Palm Beach Research Group in their newsletter. It made a solid case for Zencash, but unfortunately didn’t really tell the whole story. You can read the pastebin version of their recommendation here, so I won’t bother writing it again.
Some of the things that were missing from the report:
- As the project is a fork of ZCash, it has inherited its 0 day exploits
- They forgot to mention that the lead developer of the project quit
From what I understand, PBR is quite a reputable source otherwise and their recommendations hit more often than not, so if you have the spare money to subscribe, go ahead. Full disclosure: I am not a subscriber.
I do like Zencash, and I believe it to have a future.
Dash is premined and the masternodes, of which the dev team allegedly controls the majority of, gain a percentage of transactions. Dash is de facto centrally controlled, and not completely anonymous. Coinjoins don’t really work if they can be logged. Dash does have instasend going for them, and a massive marketing. I don’t like dash.
PIVX (PIVX) is basically Dash without premine.
Verge (aka DogeCoinDark) is like Bitcoin with Tor bolted on top. As I have discussed, IP alone is not the key feature of anonymity. Bitcoin without IP logged is good, but not nearly enough. If the ledger is public, it is anonymous. At least it’s not centrally controlled.
Technical analysis and price prediction
XMR has been in a relatively long downswing. It is hard to predict exactly when will XMR rise again, but we can try.
The following updates are in the pipeline:
- Kovri – That will take care of the risk of IP’s being associated with text transactions on the chain. This is already avoidable with the use of Tor or VPN. Kovri will also provide protection against metadata leakage and node partitioning attacks. Most importantly, it will allow the running of the node in a high risk, oppressive environments. Personally I think that’s the most important part, the true test of anon cryptos is not when things are nice, but when the government officials come calling. Had a bit too much of the old thinking, did you?
- Android GUI port – More adaptation.
- Multi-signatures – This will be a signal for all darknet markets to move to XMR. I believe actually that that’s where the name comes from, a signal to multiple markets to start using it. Yes.
- Subaddresses – I don’t rate this as such a big deal, since you can already generate addresses easily, but I understand the need for ease.
All of these will be interpreted as bullish signs and the added value is not factored in yet, since their release dates are “when ready”.
What else is needed in the long run:
- Dedicated hardware wallet – Once this is done, people can store their XMR in a safe enough manner even for a paranoid cryptobiollionaire.
- IOS wallet – Even more adaptation.
Assuming that Kovri is released and wider knowledge of the in-built weaknesses of other privacy coins becomes more common, the price will pump up. Even Kovri alone will do it, but I think that XMR will emerge as the winner from all these privacy coins. Or who knows, maybe the PBR guys’ reference to Zencashes mind-breaking cryptographic revelation is actually true, and not just a pumped up insignificance, and Zencash takes the cake.
Let’s get technical, boy.
Support at 0.0137. Support was hard tested on 12-13 October.
Volume is basically dead at this point, which is very bullish if combined with rising volume and price. If we see an upturn in price and a spike in volume, get ready for gainz. The market would indicate that it is oversold.
But that is only if. Low volume, as it is, indicates a fine balance. Something is going to happen.
RSI has been in the oversold lately (this is actually quite rare in the crypto world if you use RSI 14). Price moves downwards, CCI upwards.
So down to 0.0137, at most, and then back up, probably without too much resistance to 0.022 over the span of 2-3 months. Or straight up, without any more bounces. I think it’s a good time to get your long positions in. If you want to get real greedy, wait until 0.012. But I don’t think it’ll go that low.
If it does drop below 0.012, it can find its way all the way down to 0.01. Below that, never.
- If you value your privacy as a value in itself, or…
- If you believe that XMR will beat its competition, or…
- If you think that XMR will at least rise in price, or…
- Especially if you have any (not just criminal, think political opposition, revolutionary thinkers, support for humanitarian NGO’s in despotic countries, etc) crypto activity that you do not disclose to the government, or to any private party – anyone at all, then..
Don’t get find yourself in a spot where they make an article of you at Should have used Monero. There’s also a new darknet market called Libertas that accepts only Monero. Perhaps there’s a reason for that? Darknet markets moving into XMR is no trivial matter, since it drives adaptation (both on user side as well as on operator side, as they have to get to understand the XMR system, get to know how to work with it etc), as well as demand (on regular markets, BTC/USD(T) to XMR).
Get some XMR, use it, fall in love, share this article to your friends, get more, hold some.
Full disclosure, as if you didn’t get it by now: I have some Monero dineros. How many? That’s between me and God.