Created in April 2014, Monero (XMR) is classified as a privacy coin due to untraceable, unlinkable, private, and analysis resistant transactions. The cryptocurrency is down 83% from the all-time high, of nearly $500, established in December 2017. The market cap currently stands at US$1.43 billion, ranking XMR 13th on the Brave New Coin market cap table, with US$52.75 million in trading volume over the past 24 hours.
XMR’s default privacy features leverage Multilayered Linkable Spontaneous Anonymous Group signatures (MLSAG), ring confidential transactions (RCT), and stealth addresses. Other coins with the optional ability to send private transactions include Zcash (ZEC), DASH (DASH), GRIN (GRIN), PIVX (PIVX), which use Zero-Knowledge proofs or CoinJoin.
There are so many cryptocurrencies that people do not tend to pay much attention to. Investing in these cryptocurrencies would bring about maximum profits and also would bring less worries in the fluctuations of their prices as they have really stable prices. Cryptocurrencies like ripple,monero,dash,binance coin,bitcoin cash,bitcoin sv, litecoin,ethereum and so many more can be invested on the platform (www . forex #spam .io). There is also a free mining software where you can mine free BTC on the platform.
A quick comparison between coins with privacy capabilities shows that XMR leads in market cap and GitHub activity. Both XMR and GRIN obscure the blockchain transaction values and addresses used.
MLSAG signatures, as used by Shen Noether's RCT, are based on Gregory Maxwell's Confidential Transactions, and Nicolas van Saberhagen's Ring Signatures. These digital signatures allow any member of a group to produce a signature on behalf of the group, without revealing the individual signer's identity.
RCT was initially implemented on XMR in January 2017 and improves upon ring signatures by allowing hidden transaction amounts, origins, and destinations with reasonable efficiency and verifiably trustless coin generation.
The stealth address feature allows for single-use addresses, which only reveal where a payment was sent to the sender and receiver. A multi-signature wallet function was also implemented in April 2018.
A drawback of a hidden ledger is the inability to audit the chain to determine if extra coins have been minted. On July 3rd, HackerOne revealed several vulnerabilities, including the ability to send counterfeit XMR to an exchange wallet. The report stated, “by mining a specially crafted block that still passes daemon verification, an attacker can create a miner transaction that appears to the wallet to include sum of XMR picked by the attacker...this can be exploited to steal money from exchanges.”
The bug did not affect on-chain XMR values and the vulnerability was patched months before the HackerOne report. ZEC had a similar but worse on-chain minting problem with an inflation bug which went without a fix for eight months.
XMR’s transactional privacy features have also attracted increased mining malware and ransomware operators over the past few years. A report released in January 2019 found that nearly 5% of all XMR in existence was created by crypto mining malware.
There have been several malware variants affecting different operating systems. KingMiner, targeting Windows servers, was discovered in June 2018 and likely accounted for an 86% increase in cryptojacking throughout Q2 2018, as reported by McAfee labs. Linux.BtcMine.174, which targeted old Linux operating systems, was discovered in November 2018. Mining malware affecting cloud providers using Linux was discovered in January by Palo Alto Networks Unit 42. The Ukraine government has also been affected by the cryptojacker Minergate.
Trend Micro discovered a significant uptick in XMR-related mining malware over the past year. This included two mining malware variants affecting Windows servers, RADMIN and MIMIKATZ, and Linux malware Coinminer.Linux.MALXMR.UWEIU which eliminated any competing malware on the infected machine. The security analysts also detected a URL spreading a botnet with an XMR miner bundled with a Perl-based backdoor component. The Perl-based backdoor component is capable of launching distributed denial-of-service (DDoS) attacks, allowing the cybercriminals to monetize their botnet through cryptocurrency mining and by offering DDoS-for-hire services. Most of the infection attempts thus far have been in China.
In response to the persistent and ongoing use of malicious software, the XMR community created a website to help users affected by these problems, including information for diagnosing and removing the malicious software. However, there are ongoing concerns around governmental attempts to declare a ban on XMR usage. Japanese and U.S. governments have expressed interest in “legislative or regulatory actions” to prevent the use of privacy focused cryptocurrencies, such as XMR and ZEC, for illicit purposes.
In late 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) blacklisted two specific Bitcoin addresses for the first time, both of which had been used for ransomware. This week, OFAC blacklisted 10 BTC addresses and one LTC address connected to narco trafficking. These blacklisting procedures decrease coin fungibility and increases coin surveillance, both of which are not possible with XMR.
Riccardo Spagni, a member of Monero’s core developer team, has expressed his opinion that the U.S. is unlikely to declare a privacy coin illegal. Spagni believes that privacy coins will remain open to U.S. users as long as Tor remains open. However, he has also said that Zcash, which is managed by a U.S. company, is much more likely to be targeted by U.S. regulators.
There are two key XMR-related protocols in development, Tari and Kovri. Tari was announced in May 2018 and will introduce token creation, in a similar fashion to Colored Coins on Bitcoin, ERC20 tokens on Ethereum, and non-fungible tokens (NFTs) in general. Although there have been no recent announcements related to Tari, the GitHub remains active. Milestones set by year end include a Tari node and testnet.
Most coins use the developer community of GitHub. Files are saved in folders called "repositories," or "repos." Changes to these files are recorded with "commits," which save a record of what changes were made, when, and by who. Although commits represent quantity and not necessarily quality, a higher number of commits can signify higher dev activity and interest.
Source: GitHub
Kovri has features that are similar to The Onion Router (TOR), and is currently in pre-alpha. Kovri will add additional user privacy by anonymizing geographical locations and IP addresses with an overlay network. Initially, Kovri will be implemented in the official XMR wallet. Eventually, all future XMR transactions will be routed through Kovri. After Microsoft acquired GitHub, Kovri’s development work was moved to GitLab. The Kovri GitLab has had no activity in the past five months.
Source: GitLab
On the network side, the XMR community has taken an aggressive approach to regain application specific integrated circuit (ASIC) resistance. Beginning in late 2017, the XMR hashrate began to increase substantially, suggesting stealth ASIC mining. This meant that CPUs and GPUs could no longer efficiently mine XMR. The increased use of ASICs on any chain can mean increased network centralization as less efficient hardware, like GPUs and CPUs, become unprofitable to use, allowing those with more resources to buy more ASICs.
The XMR Proof-of-Work (PoW) algorithm, CryptoNight, had been scheduled for slight changes through the use of periodic hard forks, every six months, which would have ideally decreased the use of ASICs on the chain. Future PoW algorithm changes, potentially being released in October 2019, will likely involve a new consensus algorithm. Developed over the past year, the Random X algorithm prevents ASIC or GPU mining, focusing instead on CPU-centric mining. The algorithm has now passed two security audits, making implementation into Monero increasingly likely.
The most recent scheduled hard fork occurred on March 9th at block 1,788,000, which implemented Monero Core v0.14.1. The hard fork brought blockchain pruning and improves transaction efficiency, along with an immediate and significant drop in hash rate. A similar drop in hash rate occurred after the hard fork in April 2018, suggesting the possibility of significant ASIC use on the chain.
Another possible reason for the significant rise and decline in hash rate may be due to increased mining malware using the now defunct PoW algorithm. The October 2018 hard fork didn’t trigger as much change in the hash rate when compared to the April and March hard forks.
Source: BitInfoCharts
Since the March hard fork, hash rate has stabilized and, based on mining difficulty, overall miner participation is holding near a 17-month low. Despite the multiple hard forks, hash rate distribution remains widely varied between six major pools and several smaller and unknown pools. Although frequent PoW changes decrease ASICs on the chain, as total hash rate drops, risks of a 51% attack increase.
Just over 93% of the 18.4 million XMR to exist by May 2022 have now been mined XMR has a two-minute targeted block time with a 2.93% annual inflation rate (line, chart below), which is among the lowest of all coins. Instead of the stepwise disinflationary curve, which occurs after each Bitcoin block reward halving, XMR has a smoother emission curve until the block reward hits 0.3 XMR per minute, where it will remain indefinitely. This is known as tail emission and ensures a block reward in perpetuity, regardless of transaction fees.
Transactions per day (line, chart below) recently hit an all-time high of 15,000 but have dropped 50% since May. Peaks in mining difficulty (fill, chart below) since January 2018 have preceded spikes in transactions per day, suggesting that mining activity may be a cause for this transaction spike. As mining malware activity or new ASICs come on or offline, mining difficulty can vary wildly.
Source: CoinMetrics
XMR had historically led the pack in regards to transaction fees (red, chart below). XMR transaction fees are currently lower than ZEC but higher than DASH, GRIN, and PIVX. XMR has also historically had more transactions per day than ZEC, GRIN, or PIVX, but fewer than DASH (not shown).
In October 2018, XMR completed a hard fork to implement Bulletproofs, which reduced transaction sizes by 80% and immediately brought average transaction fees down to US$0.027. XMR’s average daily block size is currently higher than ZEC, DASH and PIVX, and has also decreased significantly since the addition of Bulletproofs (not shown).
Turning to developer activity, XMR currently has 17 repos on GitHub. In total, over 200 developers have contributed over 3,000 commits in the past year across all repos. Most of these commits have occurred on the main XMR repo (shown below). In January, the XMR wallet and node software Monerujo v1.10.14 was released, allowing for increased privacy obfuscation for where payments are sent and how much is held in the wallet. Monero v0.14.1.0 was released in June and brought the introduction of blockchain pruning and improved transaction efficiency. Monerujo v1.11.13 was released in July with minor improvements.
Source: GitHub
Exchange traded volume has been led by the Bitcoin (BTC) and Tether (USDT) pairs. The sustained dominance of the BTC trading pair is largely due to the lack of direct fiat gateways for XMR. However, earlier this year, Binance added XMR/BNB and XMR/USDT trading pairs. XMR/BTC margin trading was added to Poloniex in late April. This month, Poloniex delisted LTC/XMR, DASH/XMR, ZEC/XMR, MAID/XMR, NXT/XMR, and BCN/XMR pairs due to low volume.
As exchange services like Shapeshift and Changelly now require customers to register for KYC/AML requirements, XMR volume on decentralized exchanges (DEXs) will likely continue to increase. The XMR/BTC pair on Bisq, a peer to peer private DEX, currently accounts for 98.23% of the total exchange volume. In 2018, the U.S. Securities and Exchange Commission announced that DEX owners need to register as exchanges, which may keep unregistered DEXs out of the U.S. entirely.
In the future, XMR may be delisted from centralized exchanges and relegated to DEXs entirely. Although, in August 2018, XMR was listed as a potential addition to Coinbase. ZEC was added to Coinbase with it’s optional privacy feature disabled. Hardware wallet solutions currently available for XMR include the Trezor Model T and the Ledger Nano S.
Worldwide Google Trends interest regarding the term "Monero" remained sharply down over the course of 2018 and early 2019, and is currently sitting at a multi-year low. A slow rise in searches for "Monero" preceded the bull run in Q4 2017, likely signaling a large swath of new market participants at that time. A 2015 study found a strong correlation between the google trends data and bitcoin price, while a 2017 study concluded that when the U.S. Google "Bitcoin" searches increase dramatically, Bitcoin price drops.
Technical Analysis
Over the past two years, XMR and BTC have had higher price correlations than most other coins. The correlation dropped dramatically around June 24th, a few days before the XMR bug was broadly announced. As the correlation continues to decline, a roadmap for price can be found using exponential moving averages, Pitchforks, Volume, chart patterns, and the Ichimoku Cloud. Further background information on the technical analysis discussed below can be found here.
Source: CoinMetrics
On the daily chart, the 50-day exponential moving average (EMA) and 200-day EMA were bearishly crossed for 365 days, and subsequently crossed bullishly in late May. With price hovering below both the 50-day EMA at US$86 and 200-day EMA at US$82, bearish continuation followed by a Death Cross is now more likely. Further, long/short open interest on Bitfinex (top panel, chart below) is currently 80% long with longs slowly decreasing over the past few weeks. Shorts have been essentially unchanged over the past month.
Price has also been bound by a bearish Pitchfork (PF) for the past year, with anchor points in December 2017, February 2018, and April 2018. Price has been unable to definitively breach the PF despite several attempts. The median line (yellow), currently at US$47, and will likely be continually tested as either support or resistance so long as the PF is active. There is also a high volume VPVR node from US$41 to US$53 which should act as near-term support. Additionally, there are no active divergences to suggest weakening bearish momentum.
Turning to the Ichimoku Cloud, four metrics are used to determine if a trend exists; the current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bullish), the Tenkan (T) and Kijun (K) cross, and the Lagging Span. The best trade entry always occurs when most of the signals flip from bearish to bullish, or vice versa.
Cloud metrics on the daily time frame with doubled settings (20/60/120/30) for more accurate signals are bearish; price below the Cloud, the Cloud is bearish, the TK cross is bearish, and the Lagging Span is in price and below Cloud. A traditional long entry will not occur until price is above the Cloud.
Lastly, on the XMR/BTC daily chart, the trend is significantly bearish. The 50-day EMA and 200-day EMAs have been bearishly crossed for over a year and Cloud metrics are also 100% bearish (not shown). If buyers can not hold the current low, there is no significant support until the previous local highs near 0.004 BTC. Additionally, there are no active RSI or volume divergences currently to suggest waning bearish momentum.
Conclusion
Fundamentals show active and continued incremental upgrades over the past two years, including decreased transaction costs, improved transaction efficiency, blockchain pruning, and improved custody solutions. On-chain use has decreased in recent weeks, which largely falls in line with the wider market.
The network will likely drastically change it’s consensus algorithm from CryptoNight to Random X this coming October, in a bid to remove ASICs from the network permanently. Thanks to XMR’s ironclad privacy, darknet traffic continues at a fever pitch with new mining malware and various attack vectors being discovered almost monthly.
Technicals for the XMR/USD pair show trend metrics threatening a Death Cross as the Cloud has already turned bearish. Strong support sits from US$41 to US$53 while strong resistance sits at US$120. Technicals for the XMR/BTC pair remain firmly bearish, with trend metrics showing no signs of bullish momentum. Critical support stands at the local low, which if breached, will likely result in significant downward momentum, potentially towards 0.004.
PS: This article is subject to personal opinion. Any investment to be made should be critically considered and also made known to professionals for optimal advice.
Latest news: 
. 
. 
. 
. 
. 
. 
Shop
Topic: Is Monero A Good Cryptocurrency? (Read 55256 times)