Since the launch of Bitcoin in 2009, it has attracted a very particular audience because of its digital nature – criminals. But Bitcoin is not as anonymous as it initially claimed.
The failure of the original digital currency to provide anonymity has encouraged other developers to develop privacy coins like Monero and Zcash.
These altcoins are specially designed to provide privacy to users, along with other features of Bitcoin. Because of this, online scammers and hackers are now dumping Bitcoin and taking an interest in these privacy coins.
Monero, one of the privacy coins, is getting a lot of attention lately. The popularity of the coin skyrocketed in recent months and even surpassed Bitcoin in percentage growth. Since November, Monero went up from a mere $86 to the current price of $375, according to coinmarketcap.com. As this coin’s value quadrupled, its market cap is soaring beyond $5.8 billion. Bitcoin’s price, on the other hand, only doubled in this given period.
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Mentioning the recent rise of the ransomware attacks, Matt Suiche, founder of Dubai-based security firm Comae Technologies, in a telephon interview with Bloomberg said that Monero is now “one of the favorites, if not the favorite.”
Bitcoin vs anonymity
For every Bitcoin transaction, the blockchain network registers a send and receive address along with the timestamp and amount. With some critical analysis of the network, authorities can easily nab scammers with this information. Many analytics companies like New York-based Chainalysis are working on flagging the stagnant Bitcoin funds and also tracking illicit activities like money laundering.
On the other hand, Monero’s core technology is built exactly to stop this anonymity loophole. Every IP address involved in a Monero transaction is encrypted by the network and it also generates a fake address to obscure the real sender. The network also hides the transaction amount. These advances make it very difficult, if not impossible, to track the transactions.
According to the developers of Monero, they developed this coin to protect the privacy of citizens and not to encourage criminal activities. Nobody in this world likes to be tracked, for people to see what they are purchasing, and this is where Monero comes into the picture.
Monero’s core developer Riccardo Spagni said to Bloomberg: “As a community, we certainly don’t advocate for Monero’s use by criminals. At the same time, if you have a decentralized currency, it’s not like you can prevent someone from using it. I imagine that Monero provides massive advantages for criminals over bitcoin, so they would use Monero.”
Monero is also trying hard to compete with market-leading cryptocurrencies. Last month, the team partnered with many musicians to launch Project Coral Reef, under which 45 musicians and 5 online stores accepted Monero as payment in the holiday season. The list of musicians included Sia, Lana del Rey, Backstreet Boys, Lamb of God, and many more.