Created in 2014, Monero blazed onto the crypto scene as its price shot up from $13 at the end of 2016 to $275 at the end of 2017, far outstripping the x15 gains of Bitcoin over the same period.
From the beginning, however, its privacy-focused protocol meant that it garnered a reputation as something of a cryptocurrency that tended to attract the ‘wrong sorts’. Whilst an estimated 10% of Bitcoin transactions have been thought to have some kind of relationship with illegal activity, the percentage of such transactions placed at Monero’s door was much higher, with one Bloomberg article claiming that it had become the cryptocurrency of choice for online extortionists.
DOUBLE-EDGED SWORD
From the beginning, however, Monero has always been something of a double-edged sword. Driven by what were presumably good intentions, its development team ensured that its protocol served up a mining process which could remain CPU-focused, avoiding the kinds of mining oligopolies that Bitcoin has become infamous for.
The problem, however, was that these democratized mining bots could be exploited by a range of actors who inserted Monero mining code into web-pages which then served up javascript to online users that effectively meant that hundreds of thousands of personal computers unwittingly mined Monero – and lots of it – on someone else’s behalf.
Nor did it help that even Edward Snowden, arguably the world’s most important privacy advocate, raised his own concerns stating that the protocol logic did leave theoretical room for traceability – representing something of a knock-back from precisely the kind of figure that, presumably, the Monero protocol was designed to attract.
COMEBACK KID
But none of that, however, seemed to hurt the currency’s wider appeal. Dozens of Monero groups began appearing across the globe, with meetup.com now advertising regular Monero educationals from Dublin through to Johannesburg. In the end, blockchain start-ups also started climbing aboard with the latest outing, the Loki ICO, proposing a messaging platform that exploits Monero’s Tor-like ‘Garlic Routing’ to provide an entirely anonymous service.
On top of that, the team behind Monero have pointed out that the protocol’s anonymity may even help to hinder some kinds of criminal activity as classic, pseudonymous cryptos like Bitcoin offer rogue elements the ability to view how much holdings a given user possesses, something which may be responsible – at least in part – for the reported recent surge in crypto wallet crime.
With Monero, a public key is not sufficient to view an account’s holdings; the private key is required. A Public Key View facility can be offered, however, to trusted parties to whom an account holder is happy to grant viewing permission.
It is a feature that may now mean the protocol can become an attractive feature for regular businesses who want to expose their transactions to appropriate parties (the tax authorities, for example) whilst keeping that information guarded from everyone else. Therein, ironically, may lie its eventual, wider appeal.
