When Moon (ero): The Secret of Monero’s Falling Worth

The popular privacy coin has been one of the worst performers over the past month, especially since it withdrew in early May. BTC’s value has steadily declined since the end of April, and the question arises as to why.

Data protection doesn’t seem to sell

Monero is a staple in the cryptocurrency community, where most of those involved have at least a little respect for the project. The network offers completely private transactions as well as full fungibility of all coins in circulation. Monero has seen some exciting developments in the past few months, but it doesn’t seem to have brought great returns for investors.

The April pullback put a lot of coins back in price, but it didn’t seem to affect Monero as much as others. Monero rose from a low of $ 165 to a high of just under $ 290. Other altcoins, however, had much more impressive numbers. For example, Ethereum and Bitcoin Cash have more than doubled their respective values ​​over the same period.

What’s wrong with Monero?

The question that puzzles market analysts is, “Why?” Monero has made some impressive moves in terms of adoption and technology, but the price doesn’t seem to reflect that at all.

At the end of May, Monero’s lead developer Riccardo “fluffypony” Spagni announced that he was planning to break away from many leadership roles in the community. When someone leaves a leadership position, it usually raises questions about the future of the project. Some investors may see an early warning sign of problems ahead. However, Spagni has no plans to leave the community altogether

I will always be an advocate of privacy and of Monero being part of the Monero community, but my actual responsibilities need to be reduced by definition.

Monero has been GPU degradable since its inception as there were no ASICs available in the market. Earlier this year, mining hardware maker Bitmain announced the Antminer x3, a CryptoNight mining ASIC. These ASICs used the same algorithm that was used on the Monero network.

In addition, many believed that much of the hashrate came from botnets – hacked computers that used their processing power to look for the hacker.

Monero performs routine network upgrades through hardfork every six months, and the threat posed by ASICs and botnets has been a major concern in the community. To counteract the threat, the developers made minor adjustments to the Monero mining algorithm during the April upgrade. Since ASICs specialize in breaking down only one particular algorithm, the optimization would effectively block all existing ASICs.

It would also address the annoying possibility of botnets as the hacker cannot push an update to all infected computers to instruct them to mine on the new chain. Monero has always been a target for hackers trying to break into other people’s computers because the network is completely private.

Monero launched its v0.12 software and the upgrade went wonderfully. The pre-fork hash rate was around 1000 MH / s and dropped to over half to 460 MH / s once common miners updated their rigs. This means that at the time of the branching, more than half of the network was dismantled via botnets or ASICs.

Monero also saw the integration of Ledger Nano S earlier this month, a big step for the fungible cryptocurrency. The latest Monero client allows users to store their hard-earned XMR on a secure hardware wallet. Ledger is expected to release a Monero app, a Ledger integration with the Monero GUI, or a third party client to connect to Ledger in the near future.

Should we be concerned about botnets?

An interesting study found that botnet fears may not be as justified as we thought they were. Researchers at Palo Alto Networks who examined crypto-mining malware found that Monero was mined around 630,000 code samples around 84 percent of the time. They were able to extract more than 2,300 Monero wallet IDs, which they then match against the mining pools used by the malware.

The researchers found that around 800,000 XMRs had been mined through these botnets, but very few of the wallets had a significant amount of money. From all the wallets analyzed, the following was found:

  • 55% of the wallets accumulated 0.01 XMR or more.
  • 244 wallets accumulated 100 XMR or more.
  • 99 wallets accumulated 1000 XMR or more.
  • 16 wallets accumulated 10,000 XMR or more.

While these numbers seem shocking, 800,000 XMR make up only 5% of all XMR imprinted on the network. Many would expect botnets to have a much more significant impact on the network.

Monero also has some exciting things on its roadmap. Next, the team will release the new Monero GUI to complement the client version. Later this year we’ll see another network upgrade that will hopefully add bulletproof data, reducing Monero’s transaction size, and therefore fees, by around 80%. Bulletproofs are currently being reviewed by third-party companies, and the cost of testing has been fully funded by the community.

Do you own Monero? What do you think of the slightly stunted price of the data protection coin? Are you buying the dip? Let us know in the comments below!

Images courtesy of CoinMarketCap, Shutterstock, AdobeStock

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