UNTRACEABLE CRYPTOCURRENCY MONERO IS BOOMING
The value of Monero has more than tripled in the last ten days moving from around $2.47 to $8.10 as at the time of this publication.
Described as the new digital currency that online drug-dealers have started to adopt because it enables them to conduct business with more anonymity, the price of two-year-old Monero skyrocketed lately, driven by the announcement of several darknet markets to accept Monero as payment.
AlphaBay, one of the most popular sites for buying drugs like liquid LSD and hybrid cannabis, said last week it has partnered Oasis to begin accepting Monero on September 1. This led to increased media coverage, attracting more speculators towards the currency.
Whether the factor behind the quick rise is solely due to darknet markets’ adoption is unknown. However, with the report by RAND Europe that says illegal drug transactions on cryptomarkets have tripled since 2013, with revenues doubling, it couldn’t be far from being a major factor.
The research institute names vendors who indicated they were operating from the U.S. as having the highest market share of drugs (35.9 percent of total drug revenues) followed closely by the U.K. (16.1 percent), Australia (10.6 percent), Germany ( 8.4 percent) and The Netherlands (7.1 percent) revenue share. Another factor that could have contributed to the rise is the growing efforts to decriminalize Bitcoin use which may have shifted attention from the top cryptocurrency. A group of researchers two weeks ago announced the creation of an analysis tool for US law enforcement that can be used to overcome the challenges of criminals using Bitcoin for transactions. Sandia‘s work focused on law enforcement’s most immediate need to reduce the time and resources necessary to trace illicit commerce.
Trading in Monero has also increased with exchanges such Poloniex recording more than 1,300 Bitcoin worth of its trade in 24 hours.
The growing interest has also drawn the attention of wallets. Bitwala recently added it to the list of accepted Altcoins and Cryptocurrencies for its users to pay bills, send out international bank transfers and use it to top up their debit card.
Monero aims to be a secure, private and untraceable cryptocurrency. It was created in April 2014 as an open source project and is currently maintained by seven core developers, the most prominent fabulously calling himself “Fluffy Pony”.
The main differences between Monero and Bitcoin are its default use of stealth addresses and ring signatures, obfuscating most transaction data like sender, recipient and payment amount. By implementing these features, the currency offers its users full transaction anonymity.
Unlike Bitcoin forks, Monero is based on the CryptoNote protocol whose transactions cannot be traced through the blockchain to reveal its sender or receiver.
Bitcoin has its pseudonymity which enables its users not to be obliged to disclose ownership of bitcoins. However, given the transaction history and data that Bitcoin users have disclosed about themselves, it may be possible to recover information about particular bitcoins.
The market values of Bitcoin and Monero are also different. Despite its spike in price, the low rate of Monero is still affordable for interested users when compared to Bitcoin’s which has gone large scale and pierced into conventional financial system to be eyed by investors.
Monero may not be able to sustain the momentum when compared to bitcoin which has outgrown several phases. A further growth in the adoption of Monero may draw greater regulatory measures that won’t augur well for the future of cryptocurrencies in general.