Cryptocurrencies have enjoyed a booming popularity in 2017. Many predict that popularity will only grow in 2018. Some say the focus of 2018 will be on privacy coins. Bitcoin is uncontrollable by governments, however it is fairly easy to track. The public ledger allows anyone to see what address moved what amount of Bitcoin to what other address. It isn’t easy, but people with large amounts of resources to spend (governments) can discover which individuals are linked to which Bitcoin addresses. Famously the FBI rolled up many people involved with the Silk Road marketplace.
Don’t Try to Hide Your Bitcoin
The weakness of Bitcoin being able to protect privacy was well known from the start. Some developers began working on a solution to this problem. CryptoNote protocol has been around since 2012. It is not known exactly who was involved, but Bytecoin was developed off this protocol and eventually got some attention. On 23 April 2014 Monero was launched as a hard fork of BitMonero. Riccardo Spagni (Code Name: Fluffypony) entered the scene and became the most prominent personality involved with Monero. As interesting trivia, Monero means “coin” in Esperanto.
Monero is Private, Probably Private, OK Maybe Private
Monero’s official website states that monero is secure and private. The cryptocurrency uses ring signatures, ring confidential transactions, and stealth addresses. All these combined obscure the Monero transactions and make it very difficult to track. Monero claims it is impossible to track, however…
In 2016 Monero experienced rapid growth due in large part to a less than legal market known as AlphaBay. AlphaBay’s customers were interested in Monero’s advertised privacy features. It is suspected that Monero was not as private as was thought because law enforcement put the smack down on AlphaBay.
In 2017 Andrew Miller and others released a research paper that showed that Monero’s transactions could indeed be discovered and linked to individuals. The research only deals with Monero up until 2016 and details that transactions made between 2014 and 2016 are not at all private. Monero contends that improvements made since then have made Monero a truly private cryptocurrency. Only time will tell.
Miners Using Malware
Monero has gained some negative attention recently when it was revealed that some bad actors were using malware to hijack the CPU’s of unsuspecting customers of game software to mine Monero in the background of their devices. Some websites do this above board by announcing it to their users and billing it as an alternative funding system as opposed to advertising. Coinhive is one such organization. However there were some who were using customers’ CPU’s without permission. Pirate Bay is an example of one of these organizations. There are even reports that WordPress plugins are being used to hijack CPU power for Monero mining purposes.
In addition to the above bad news, it is suspected that Monero was used by the Wannacry hackers to launder their ill gotten Bitcoin.
The Privacy Coin Market is Tough
Monero shows promise as a privacy coin. However the privacy coin field has some tough contenders and it is becoming a more crowded market. The Bitcoin Private fork is coming soon to add another contender to the privacy coin market.
Don’t Fight the IRS Alone
I’m very interested in privacy coins. Some believe that privacy coins will help them evade taxes. I think this is a very dangerous thing to try. I hate taxes, and I hate government. I think it is immoral to take what someone else has produced against their will. Taxation is theft. That being said, governments are absolutely merciless in dealing with individuals who challenge their revenue schemes. I think that using privacy coins to try to evade taxes would be very foolish.
There are some wonderful use cases for privacy coins that don’t in any way involve tax evasion. For example, let’s say you wanted to give to a conservative or libertarian charity of some kind, yet you work for radical leftist organization. Since almost every corporation in America is run by radical Left wing Social Justice Warrior (SJW) nutjobs with Harvard MBA’s, you are probably at risk right now with your employer, depending on your political leanings. In 2014 Brendan Eich, who was then the CEO of Firefox, was run out of his job by SJW nutjobs when it was made public that in 2008 he supported traditional marriage. So this guy lost his job just because he held a position on marriage in 2008 that both Hillary Clinton and Barack Obama held publicly at that time. A privacy coin could liberate high profile people from the mob justice drummed up by rabble rousers from the Antifa movement.
I bought some Monero some months ago. Its price has been rising since then which has made me happy. Sadly I couldn’t afford enough Monero to make it a life changing profit, but I’ve heard it’s best to get rich slowly. Should you buy some Monero? That’s your decision.
Here are the websites that helped me write this post: