Monero is now the 5th largest crypto token in the world by market value, with a total market value over $110M. In the past 24 hours it sailed past Steem, Ethereum Classic, and Dash and is up 100%.
It's becoming difficult for even the most ardent follower of the space to keep track of all of the tokens so the goal here is to give anyone a high-level overview of Monero. I'm still a Monero noob but did a deep dive this weekend and here's what I learned:
Who created it?
The creator is Bitcointalk user Thankful_for_today. He forked Monero from Bytecoin another privacy-focused project. Bytecoin has a precarious history that involved a faked 2-year blockchain with an 80% premine. This anonymous Bitcointalk user didn't listen to anyone so the community took it over, after which the refused the offer to collaborate and disappeared.
The core dev team is now composed of 7 developers from around the world, 5 of which are anonymous, including our own whale @smooth.
What is the purpose?
The purpose is to provide users full transaction anonymity. It's well understood that Bitcoin is not a good tool for users that value anonymity . The Bitcoin blockchain reveals all transactions with an address and timestamp and it's possible for sophisticated data scientists to trace transactions to individuals. The Bitcoin blockchain was influential in helping the FBI track down the creator of Silk road, for example.
It's clear there's demand for a privacy-conscious alternative to Bitcoin as currently constructed, and Monero seeks to be that alternative.
What is the tech breakthrough (if anything)?
"Spontaneous Ring Signatures" is the tech breakthrough. The core devs wrote a white paper on it here.
A spontaneous ring signature is a digital signature that "specifies a group of possible signers such that the verifier can’t tell which member actually produced the signature.” This is a novel approach to doing confidential transactions. That said, there are many other projects attempting to implement similar concepts such as Bitcoin, Ethereum, Zcash, and Dash.
What is the token supply?
Like Bitcoin, inflation decreases over time. Unlike Bitcoin, there is an infinite supply of XMR that will ever be created (see graph below). Once the total number of Monero reaches 18.3 million. then the rate of inflation will stop decreasing and stay at a constant rate of 0.3 Monero per minute.
What is driving the spike in price?
One of the largest darknet markets, Alphabay, has added Monero as a payment method. This has spurred a few mainstream media articles as well (see Wired here and Motherboard here).
As we've seen in Bitcoin, media attention drives short-term price in the early days, but long-term the fundamentals must reflect the price. For that reason, I'm sitting on the sidelines for now watching and learning.
What did I miss? I'm sure there's some folks involved in Monero on here. Would especially love to hear from @smooth
what a shame this post does net even earn 1$... great content!!!
thanks @crypt0mine. there's still time :)
Can't help but notice the Monero action on Poloniex... thanks for the info!
No problem. Most interesting to me was the founding origin (anonymous creator, mostly anonymous devs) and the money supply (infinite supply). Both these are red flags imo.
Good intro. I would be happy to answer any specific questions.
Note that Monero has been steadily increasing over the past 6 months to a year. While nothing as dramatic as the past few days, that steady progress set the stage for the latest fireworks. Over its 2 1/2 year history, the Monero project and technology has increasingly gotten positive comments and mentions from various experts in the cryptocurrency space and development has moved forward on some new items, specifically including a new GUI and a new protocol called Ring Confidential Transactions (which hides the amount of payments in addition to the sender and recipient).
Small correction:
In fact once the total number reaches about 18.3 million, what stops decreasing is not the money supply but the rate of increase in the money supply.
Thanks, updated. One of the most interesting aspects of my research was seeing you as a core dev. Two questions:
1.) How much time do you spend on Monero vs Steem?
2.) How would you compare the developer communities, governance, and decision-making processes in Monero vs. Steem?
I'm not a developer of Steem at all, just an early miner, witness and community member. As such I really can't comment on the development process aside from what I've seen from that perspective. The time I spend on it is based on my own initiatives to build the ecosystem, not core development. I do split my time between Steem initiatives, Monero, and some other non-crypto work (though since adding Steem to the mix, I've reduced the latter).
I can say that Steem is developed by a company which has funding from their own early mining. In terms of governance, Steem has elected witnesses who decide what consensus software to run, and we consult with the developers to give them our input, but mostly the direction is set by the developers unless witnesses give them strong feedback against the direction they are setting (which rarely happens).
Monero is community-supported and the developers are either funded by crowdfunding or volunteers. The governance is by a voting system among the core team members, ratified by the community's ability to fork the project. Since Monero was itself started as a community fork of another project, the idea of the community having this power is well-understood and prominent in the value system of Monero. The core team serves the community.
So overall it is quite different, but both seem to be working.
Thanks.
On that note, who are the core devs of Steem beyond @dantheman? Are there any? I haven't seen anything written about or talked about regarding this and its important. Monero's actually got a great "about" section that describes the people involved (even though most are anonymous, at least it refers to them by rep on forums). For Steem, publicly it appears its just Ned (non-technical) and Dan.
Steem has several other core devs including @theoretical, Valentine, Michael, James and probably some others I'm forgetting. They're all visible on the github repo and most are active on Steemit as well.
I really like dashes governance. Does monero have a comparable way to allocate funds?
There is more of a semi-centralized crowdfunding system that uses the forum (custom software was written for it). It doesn't work on the blockchain the way Dash does, but it does work. It supports proposals, milestones, etc., pretty much what you would expect in terms of funding and workflow. Most of the development and some other tasks over the past year or so has been handled that way. I think every serious proposal, after going through a discussion phase to define the scope and plan, has been successfully funded.
Don't nodes need to know which address has how much in order to validate transactions? If not, why not?
They don't. Instead they validate some mathematical properties that ensure integrity of the chain without knowing specific amounts. Specifically that each output is only spent at most once and that each transaction has inputs = outputs + fee.
Does monero have any wallet that does not suck these days?
That depends what you mean by suck. It doesn't have a perfect wallet, they all have tradeoffs.
Ive uses the freewallet for a while now which works well
Its now the 3rd largest in market cap. Monero is on fire.
I think the alphabay move does not go into effect until sept 1 so the increase is actually all speculation and not a sign it being used on dark web. It will be interesting if that causes a new spike or if it's a sell the news type of effect.
agreed
Yes I commented very similarly somewhere else recently, so I would agree 100%. There is another significant market that added Monero support and is live already but I'm sure usage there is still low so it still comes down to speculation about the future.
Really interesting information about Monero, thanks @ntomaino ! I am happy that I decided to invest in Monero a couple of weeks back.
are you selling or holding?
@ntomaino, thank you for the overview and recent update on Monero!
happy you enjoyed it
Thank u
There’s other cryptos as well. If you’re interested in Cryptocurrencies, check out monero, I wrote a blog article on it here. Cheers
https://wikicrypto.com/why-buy-monero/