Recently, Reuters published a report on Monero [XMR], a leading fungible coin. The news organization stated that this was part of its series that “examines the features and characteristics of some of the alternatives to Bitcoin that have grabbed the attention of developers, investors and regulators,” with Monero being the first altcoin.
However, the community did not seem to be very pleased with the content presented in the article, with Monero Outreach, a work group of the decentralized Monero community, responding with another blog post.
About Monero, Reuters stated that the cryptocurrency enabled users to “conceal” almost all the details of a transaction. It further distinguished the coin from Bitcoin, stating that Monero’s transactions obscures the from and to addresses, as well as the amount involved in the transaction.
On the reason why the cryptocurrency was gaining attention, the Reuters report highlighted the Norwegian kidnapping case, where the fungible coin was demanded in ransom. The report went on to state,
“The unusual request underlined a growing trend for criminals to seek alternatives to bitcoin, which through its first decade has become the cryptocurrency of choice for illicit activities from buying contraband to laundering money, cybersecurity experts and law enforcement agencies say.”
Further, it pointed out the use of the cryptocurrency in the darknet marketplace, stating that three out of the five biggest marketplaces accepted the fungible coin as a mode of payment. Nevertheless, the report did mention that Bitcoin continued to be a “widely used” digital asset for darknet payments. Following this, the report also highlighted the coin’s involvement in crypto jacking, remarking that 4 percent out of the total 17 million coins in circulation were mined using malware.
On who uses the cryptocurrency for a legitimate purpose, the article said,
“Data on who uses Monero and why is scarce. That’s a challenge for understanding the usage of any cryptocurrency, even more so for one designed to obscure its tracks”
This report was soon met with a response from one of the teams dedicated towards the development of the Monero ecosystem, Monero Outreach. A blog post titled ‘A Response to Reuters’ that was published on 20th May, stated,
“[…] the story that ‘examines the features and characteristics of some of the alternatives to bitcoin […]’ it arguably over emphasized the criminal use of Monero and under presented the features and characteristics that make Monero great and popular.”
Further, the blog post listed down the reasons why the coin had gained attention. This included the underlying code improvements that made it “more efficient, faster, and more user friendly,” the coin gaining the position of a leader among fungible coins, and its contributions to academic research. The team further stated,
“Lastly, the article mentions ‘cryptojacking’, while neglecting to discuss the issue of botnets in general and how they are a problem with computer operating systems. Monero cannot control the security of operating systems, which would be primarily responsible for eliminating botnets.”
This was followed by the Monero team emphasizing that the leading cryptocurrency was a “fungible coin,” and not a “privacy coin.” It also pointed out the “view keys” feature of Monero, where the key “is associated with an address” that enables users holding it the “ability to audit the address without being able to spend the funds.”
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Fall in Bitcoin’s market dominance may be correlated to the fortunes of the altcoin market
The trends set by virtual assets have always highlighted the cryptocurrency market’s inherent volatility and spontaneity. Prices lack symmetry and rarely exhibit consistent growth as different factors come into play to dictate an asset’s valuation.
At press time, the world’s largest crypto, Bitcoin, had stormed past the $11,000 mark and was consolidating to push for a surge over $12,000. The rest of the altcoin market however, apart from one or two minor hikes here and there, has been relatively quiet after collectively surging in the early part of the year.
At the beginning of 2019, a significant number of crypto-assets performed significantly well in a group, wherein most assets demonstrated a prominent hike in their values with little to minor price corrections.
A majority of tokens doubled their valuation until Bitcoin breached the $6,600 resistance. Subsequently, altcoins failed to keep pace as Bitcoin continued to test more resistance limits in the market.
At present time, Bitcoin enjoyed an unprecedented 62 percent dominance in the cryptocurrency market. As its dominance primes itself to climb over the 63 percent mark, many in the community speculate this could be red flags for the altcoin market.
Major cryptocurrency enthusiasts and analysts have stated that altcoins could significantly capitulate if it so happens. However, past events offer a sliver of hope for the altcoin market.
According to CoinMarketCap, the altcoin market has been significantly affected whenever BTC’s dominance has fallen. During the bull run of 2017, Bitcoin enjoyed a dominance of 65 percent and the global market cap hit a value of $402 billion. However, in January 2018, when BTC dominance plummeted, the global market cap peaked at around $710 billion. The dominance was down by half, whereas the global market cap had almost doubled.
A major reason for the same was money funneling into other altcoins after witnessing a shift in momentum from Bitcoin to the rest of the crypto-market. The present market situation may take a similar path once BTC’s dominance falls, opening the door for other virtual assets to take advantage of the scenario.
However, the present rise of BTC is backed by much more certainty than the bull run of 2017. Hence, a repeat of the January 2018 period may be unlikely, and will happen if and only the market sentiment shifts gears drastically towards altcoins.
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