Sabrina Martins-Vieira
Find out why Monero is still out there, even if you don’t realize it anymore
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- But is Monero an ideal choice for illegal activities?
- Monero isn’t doing well, but it’s not dead
Monero (XMR) is one of the breakthrough cryptocurrencies on the blockchain market, launched in 2014. It has gained popularity among people who prioritize privacy in their transactions. Despite its initial success, Monero has recently seen a decline in mainstream media coverage and can be perceived as less active in the blockchain industry.
Monero is a fork of Bytecoin. Its main goal is to offer anonymity to its users by obfuscating the identities of both the sender and the recipient in transactions. This is achieved by implementing ring signatures, a cryptographic technique built into the Monero blockchain to maintain anonymity.
Ring signatures allow a group of addresses to be combined in one transaction, making it impossible to determine the specific sender in the group. This is to protect the privacy of the transaction by preventing traceability to a specific person or wallet.
Due to the emphasis on anonymity, Monero has been linked to illegal activities. This perception had a negative impact on the cryptocurrency’s reputation and acceptance.
Monero’s characteristics lead people to associate the altcoin with illegal activities. This is because cryptocurrency has privacy that many do not have. A fitting example of this is Bitcoin (BTC). The crypto created by Satoshi Nakamoto does not have the functionality in its code to perform anonymous transfers.
As a decentralized cryptocurrency, Bitcoin uses a public blockchain that enables transparent transactions. Without using a privacy mixer, these transactions can be viewed by anyone. Therefore, its transparency might not make it the optimal choice for people who want to engage in illegal financial activities.
But is Monero an ideal choice for illegal activities?
Many claims have been made that Monero’s focus on privacy makes it an attractive option for those involved in illegal activities. In 2019, the German Ministry of Finance raised concerns about the use of privacy-focused cryptocurrencies like Monero for illicit purposes. This led to governments around the world voicing similar concerns, leading to several cryptocurrency exchanges delisting Monero and other similar altcoins that prioritize user anonymity on their platforms.
It’s worth noting that while Monero’s focus on privacy can make it an attractive option for illegal activity, it’s important to remember that using a centralized exchange with a KYC process removes anonymity, regardless of the cryptocurrency used. Furthermore, it is not fair to blame the technology itself for the actions of people who may misuse it.
It is important to remember that human fallibility predates the creation and adoption of Monero. Although this can be linked to illegal activities, a 2021 study by Chainalysis found that only a small percentage of total cryptocurrency transaction volume, 2.1%, was used for criminal purposes, which increased to 0 in 2020. 34% declined. In addition, the United Nations has estimated that between 2% and 5% of global GDP is used in illegal activities conducted primarily with fiat currency.
It’s worth noting that while Monero’s privacy-focused features can be used for money laundering or other illegal activities, that is not the cryptocurrency’s intended purpose. Monero was created with the aim of giving individuals the right to liberty and security.
Monero isn’t doing well, but it’s not dead
On the other hand, Monero’s trading volume is low compared to other cryptocurrencies, despite its position as the 27th largest cryptocurrency by market cap. Additionally, smaller capitalization altcoins tend to have higher trading volume. Additionally, Monero’s social media activity is also relatively low, which could be seen as a negative indicator for the cryptocurrency market, which typically requires constant innovation and development.
On the bright side, despite competition from newer cryptocurrencies such as decentralized finance (DeFi) tokens, non-fungible tokens (NFTs), and Layer 2 solutions, Monero is still well positioned in the market due to its unique property of anonymity. Furthermore, Monero reached its all-time high in 2021, unlike other cryptocurrencies like Bitcoin Cash and EOS, which failed to surpass their previous ATH. Additionally, Monero has experienced less depreciation from its ATH compared to other altcoins.
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