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Monero: Not THE Earliest Bird, and still getting the worm

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Why using open-source and GPU approaches is making Monero a smart second-mover in cryptocurrency forest?

The First One gets the Oyster. The Second One gets the Shell.
OR
Pioneers get Arrows. Settlers get the Land.

Yes, like everything in life there are two ways to look at anything. Being the first one in any space endows that brave soldier with a quiver of advantages and that much-craved thing called eponymous-brand-weight. Bitcoin is synonymous to cryptocurrency for the average layman. That counts.

But it can also mean a lot of arrows on the first person’s body.

Bitcoin did not change the way we think about money and speed of transactions. It capsized it. It came as a seismic force that totally, and unrecognizably, upended the world of finance and business transactions.

Yet, there were arrows. Questions and struggles about actual anonymity and scalability started coming to the fore. Use of a certain type of mining equipment (Application Specific Integrated Circuit or ASIC) made sense for the fundamental algorithm but it also made the game expensive and fraught with unexpected barriers of entry. How can one achieve real traction and endurance with these innate challenges that the community was still trying to wrap their heads around?

Yes, cryptocurrency transactions are not linked to personal information, but that attribute alone does not make a currency anonymous. Piecing together time-stamps, time-zones, patterns and wallet-peeks – it was not theoretically impossible to trace a cryptocurrency transaction to a particular user in the original model. There were other pitfalls and potholes too.

Like the expensive SHA-256 algorithm (ASIC computers are fast and compute-intensive, but they can burn a hole in a miner’s wallet and electricity bill – both).

Like the maximum limit on block sizes that weighed down transactions with delays during peak usage (only someone who can pay higher transaction fees can hop past this hurdle).

Like worries of security whenever users tried to mix/launder coins for making them untraceable.

Efforts were on to address these issues but there was clearly room for someone who could wield three new hammers to hit the nails that early movers had somehow, so far, missed.

These were:

  1. Open Source community
  2. Real, Hard-to-Dent Privacy – that is actually untraceable
  3. A level-playing field for miners – With affordable computing and adaptive block-sizes

Enters Monero. The second mover who was okay fiddling with the shell because well, there is still a lot that can be done with it. And not just decorative curtains but something substantial and industry-altering.

Yes, Monero is also a decentralized cryptocurrency but it has been spending time, passion, creative fuel, development muscle and resources into adding other adjectives to the word ‘cryptocurrency’ – stuff like private, untraceable, adaptive and affordable.

With a carefully-crafted formula of mixing privacy and affordability with its own approach to mining algorithm, Monero actually took the very arrows that hit its predecessors and made a good bullet-list for what it wanted to usher in.

Here’s how it has done/is still doing that:

  1. No footprints, No breadcrumbs whatsoever:
    Monero prides, and differentiates, itself in the application of an unprecedented way to make transactions (and users) dauntingly-hard to trace – with the combination of ring signatures and stealth addresses. When a smart mechanism mixes up different user inputs, it becomes almost-impossible to spot identities and isolate users. Hence, the strong benefit of privacy that cannot be ruined (unlike in other cryptocurrencies where any recipient of/sender of currency can see the other side’s wallet and suss out how much cryptomoney is loaded there). It is difficult to link transactions in Monero due to the way it is inherently designed. This is antagonistic to Bitcoin’s transparency mettle, but Monero believes more in privacy than in other gains of a public ledger. Also note how the always-on privacy features of Monero corral even the not-so-privacy-sensitive users under the privacy-leaning ambit.
  2. Use of a radical network recipe with CryptoNote
    It is an innovative protocol believed to have been incubated by Nicolas van Saberhagen. Also, this accommodates all kinds of compute-muscle types – so even a normal user who cannot afford ASIC resources can tap normal GPU computing and (Voila!) can indulge in cryptomining. To add to that, block sizes can now automatically adjust and expand – keeping pace with transaction volumes. The network also fortifies users from the dangers of passive network snooping; and is, consequentially, secure and user-friendly at the same time.

This is not to argue that the arrows never bruise or challenge the second-mover at all. It is privacy-eccentric and miner-friendly, but not without its share of struggles.

Clones, awaited progress on ‘Invisible Internet Project’ (I2P) for further protection from snooping, interoperability, true fungibility and some still-existent gaps on privacy (what happens, for instance, when two outputs originate from the same transaction and are used as inputs for a new transaction – how well does the ring signature Maths work then?) – Monero is also, and still, trying to find a good ground to pitch its tent better and tighter.

But what’s reassuring is this feeling that such second-row soldiers give. If not anything else, they smell of this, and strongly.

“There is no use in hitting a target, if you miss the point.”
Turtles vs. Hares – Let’s see who knows the road better.

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