on the crypto
Today, Bitcoin is up more than 5.000% to $ 763 billion, while Monero has grown a little over 3.200% to $ 4,2 billion over the same time frame - dropping to No. 33 in the cryptocurrency ranking. Despite experiencing decent growth over the past six years, Monero is no longer a leading cryptocurrency. Is it ready for a rebound or is it set to continue to underperform the best blockchains? Let's dig deeper.
Launched in 2014, Monero is a blockchain network designed to maximize privacy and anonymity. Most transactions using other cryptocurrencies can be traced from a unique digital address (code that identifies the sender or recipient of a cryptocurrency), giving clues to the online activity and identity of its owner. Monero solves this problem by hiding this data and other transaction details such as the number of coins sent or received.
Unlike Bitcoin, where each coin has a serial number, each XMR (Monero's native token) is fungible, meaning they are completely identical and interchangeable with each other. The network also gives each transaction a plausible deniability through ring signatures, an encryption technique that creates multiple baits for actions on the network.
It also uses stealth addresses, which are one-time crypto addresses that are deleted after each transaction.
Despite the use of the probably outdated proof-of-work (PoW) consensus mechanism in which miners update the blockchain by solving computational puzzles, Monero has some pretty impressive specs. The network can handle around 1.000 transactions per second, compared to five for Bitcoin and 15 for Ethereum. This speed makes it optimized in its use case as an anonymous way to store and convey value online. However, unlike some newer blockchains, Monero does not support decentralized applications, which are self-executing programs that use smart contracts to offer services on the blockchain.
Privacy coins like Monero have many legitimate use cases, but their link to cybercrime is an obstacle to their mainstream adoption. According to CNBC, Monero is increasingly used for payment in ransomware attacks (to be fair, Bitcoin is used for this too). This has led to it being less liquid than other cryptocurrencies because some exchanges have chosen not to support it for fear of attracting unwanted regulatory attention.
These fears are not unwarranted. Forbes magazine reports that in September 2021, the IRS even offered to pay up to $ 625.000 to anyone who can help provide support (likely through hacking) on investigations involving Monero and other privacy-focused coins.
On paper, Monero is an excellent cryptocurrency. It has a unique and well-defined use case, impressive technical specifications, and an early-mover advantage, which should theoretically give it some advantages in terms of name recognition and adoption. But despite its advantages, the asset has failed to maintain the dominance it once had in the industry.
Regulatory focus on privacy coins will be a long-term headwind. And while Monero deserves a place in a diversified cryptocurrency portfolio, this challenge makes it unlikely to generate sustained growth in the market.
Cryptocurrencies have revolutionized the world of economics and investment, offering a decentralized alternative to traditional…
Milkomedia-C1 announced the integration of the DJed stablecoin network on its platform. Milkomeda C1, a…
Cryptocurrencies have gained immense popularity over the last decade, attracting investors from all over the world. However,…
The former cryptocurrency exchange FTX was based in the Bahamas. The island nation has not been…
As Shiba Inu adoption skyrockets, the memecoin and the entire Shiba ecosystem…
The adoption of digital currencies such as Bitcoin has continued to grow unabated. Many…