Monero 2019 Report: Privacy feature hinders adoption, ASIC resistance makes headway

Privacy in itself is a spectrum; the meaning differs from one person to another. There are people who are absolutely fine with being completely surveilled on, there are people who are okay with partial surveillance, and there are also people who are completely against surveillance of any kind. Take “Keeping up with the Kardashians”, Snapchat and Insta as an example: Reality TV andsocial media have merged the lines between privacy and reality! And then there’s China- where the government knows everything from your last purchase to your browsing history.

When it comes to cryptocurrencies that are privacy-oriented, there are several in the market, but the most frequently touted one is undoubtedly Monero. This cryptocurrency is in not only educating users about the need for financial privacy but also paving the path one can take to ensure that their financial information stays with them and them alone.

Monero community has always sure about its raison d’etre- a digital currency that has privacy at its core and has not deviated from this path.

Most network upgrades have been focused on making Monero more private, while also ensuring that it was KYC/ AML compliant. The cryptocurrency stands on top of four main pillars: security, privacy, un-traceability, and fungibility.

Monero uses stealth address to hide the receiver’s address, ring signature to hide the sender’s address, and ringCT to obfuscate the transaction amount. Privacy-centric features don’t just end here! The team is looking at implementing MimbleWimble, which will feature alongside Tari, a project led by Riccardo Spagni.

What does Monero aim to achieve? Justin Ehrenhofer, one of the prominent members of Monero community, told AMBCrypto:

“Financial privacy is extremely important for individuals and businesses. People forget how much information is shared publicly with other coins. Privacy coins (Monero in particular) provide the privacy protections that people are already familiar with using cash.”

Monero has implemented and adopted all the technologies and protocols that enhance its privacy. The question that remains - is it completely untraceable? Justin Ehrenhofer said,

“Monero provides a higher base level of privacy than any other cryptocurrency. It’s the only major coin with privacy features that are substantially used.”

In what sound like a Shakespearean tragedy, ironically, What makes Monero, Monero, is also what makes it the prime target of governments and regulatory authorities across the world, citing concerns of money laundering and funding criminal activities. The direct result being exchanges’ delisting the cryptocurrency from their platform in order to be regulatory compliant.

This year alone, several top cryptocurrency exchanges and services dropped Monero from their platform. OKEx, BitBay, South-Korean exchange Upbit, BitOasis, and Gate.io delisted Monero, citing its privacy aspect. French financial regulators have even proposed a ban on privacy-oriented cryptocurrency, with Monero and ZCash mentioned in the report.

Speaking with AMBCrypto, Justin stated that the delisting spree has already started to hinder Monero’s adoption. He further added,

“But I’m optimistic that with time, Monero and other privacy technologies will be accepted by exchanges and regulators. These privacy features are in high demand from users and are needed for completely legal reasons.”

Contrarily, Diego Salazar expressed that this move by the exchanges was “a little silly.” He further told AMBCrypto that Monero was, in fact, “very KYC complaint” as it was similar to how cash functions. He elaborated that while a bank has all the information of its customers, it would still not have any idea as to what the person does with the cash withdrawn from the account.

Another narrative that Monero is truly known for is its battle against ASIC mining. As important as privacy is to the community, so is resisting centralization of the mining network. Developers, at first, opted to tweak the network every six months, this move was criticized by many, citing the reasons as compromising the security of the network for ‘decentralization.’

There were also some people in the space who claimed that the best way to tackle the centralization problem is by ensuring that the network was ASIC friendly as it would create the doorway to cheap ASICs that can be affordable by a majority.

However, Monero was not going to budge from this battle. Taking into account the criticisms and the constant effort being put into frequent network upgrade, the team decided it would be best to change the mining algorithm of Monero to one which would keep ASIC miners at bay... for at least a few years. Thus, entered RandomX - randomly generated machine-language programs for a virtual machine.