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Monero Analysis – December 2017

Monero

Monero has flown under the radar for most of 2017 but it has recently climbed back up to the #11 ranked coin on coinmarketcap, just below bitcoin gold (what the fuck). With a current price at $384 per coin, Monero holds a marketcap of $6 billion USD, joining around 12 coins that have a marketcap of $5 billion USD or more. While it’s currently at [EDIT: Monero held a higher ranking earlier in the year] #11,  I believe it to be heavily undervalued and is in prime position for a takeover. One can immediately notice this at a high level:

  • 2 of the coins in the top 10 have zero network value: Cardano and Iota
  • 1 coin in the top 10 is centralized: Ripple
  • 2 competitors in the top 10 are not 100% fungible and truly private: Dash and Zcash.
  • 2 coins in the top 10 are BTC forks. Bcash (which may be cemented thanks to Coinbase) and Bitcoin gold.

Upon further research, one will find that Monero fills all the check boxes: Intellectual community, solid leadership, sound technology and innovation. Below is a quick breakdown of the recent Monero updates.

Technology

Bulletproofs. The Monero developers have announced that bulletproofs will be implemented into the test net. If successful, single-output bulletproofs will be implemented on the main net during the scheduled (every 6 months) March hard fork. According to the test results, this will reduce the transaction fees by up to 80%. Multiple-output bulletproofs, not yet being tested, will reduce the fees even lower. Monero’s current fees are high because of it’s 100% privacy feature,  something DASH and Zcash do not have. The chart below shows that the Monero average transaction fees are significantly higher than those of DASH and ZCash:

 

 

 

 

But this does not tell the complete story. Below is a per kB fees comparison between Bitcoin, Monero, and some other large cap coins.

 

Let’s start by comparing Monero’s per kB fees to the per kB fees of other (hybrid) proof-of-work coins. Fees per kB for a typical transaction (2 inputs + 2 outputs):

  • Bitcoin: ~$26.90
  • Ethereum: ~$2.91
  • Bitcoin Cash: ~$0.07
  • Litecoin: ~$0.10
  • Dash: ~$0.07
  • Monero: ~$0.24

As you can see, the per kB fee of Monero is fairly low. However, due to the high transaction size, the absolute default fee (in $ terms) is quite high.

 

With bulletproofs, the transaction sizes are drastically reduced, which will also reduce the fees by a drastic number (see above). It’s easy to understand the excitement behind the announcement:

To avoid any problems, we’re deploying bulletproofs in two stages. You’ll first see only the single-output proofs. A two-output transaction will initially use two separate proofs, which still offers massive savings from what we have now. You’ll see lower fees and faster verification times. We’ll continue discussions about fee structure while we test multiple-output proofs, and later deploy them as a second stage. We want to encourage miners to use multiple-output proofs while being safe about fee scaling.

Overall, bulletproofs represent a huge advancement in Monero transactions. We get massive space savings, better verification times, and lower fees. If you’re a fan of testnet, keep an eye out for bulletproofs!

 

Multisig. Full Multisig support will be available in the next release. In addition to this feature, the Multisig addresses will not be distinguishable from the regular addresses, unlike in Bitcoin where the addresses begin with either a 1 or a 3. Below is an explanation of the difference:

 

No. The 1 at the beginning of an address is typical for pay to pubkey hash (P2SH) addresses. In order to spend these you need to provide a public key and a signature created with the corresponding private key. Thus, yes there is a single private key involved.

The 3 at the beginning of an address is typical for pay to script hash (P2SH) addresses. These can be spend by a multitude of different scripts, including 2 of 3 signature scripts or 3 or 7, etc.

The number is no reference to the number of private keys involved. In fact a P2SH input can be spend without any private key, there are essentially no limits regarding the script, as long as its using the script language provided by bitcoin core. If you can meet the requirements and the hash fits you can spend the input.

 

With over 300 developers that have worked on Monero, the current advancements and the unofficial road map are exciting. Mimblewimble on side chains and lighting network support are currently being discussed:

 

 From our perspective, as developers and technical leads in the Monero project, we want to give users access to as many systems as possible. That means that we absolutely will implement a Lightning router, we absolutely will support any other sound scaling systems that are invented, and we absolutely will not do anything to prevent people from using Monero main chain. I can’t promise insanely low fees on main chain, but we are doing everything in our power to at least make them reasonable. – Fluffypony

 

As for wallets, the X wallet iOS app is in the works and the Ledger hard wallet will add support to Monero around Q1 2018.

In conclusion, new developments are coming in fast and hot. It’s clear the marketing for Monero has taken a back seat to R&D, which in my eyes, is a rarity in this space. 2018 is ramping up to be a ridiculously good year for Monero and it’s community.

Community

Look elsewhere if you want to see a crowd of stupid plebs talking price action and regurgitating ICO white paper diarrhea. The Monero community tends to be intellectual, and not just by the low standards set by the crypto community.

 

Below are some recent notes/numbers from the Monero community:

 

Leadership

Follow Riccardo on Twitter, Reddit, or view his recent Offchain interview to get a sense of the leadership behind Monero. Then look at this guy:

 

Speaking of Zooko:

 

Jokes (not really) aside, here are some recent noteable tweets from Riccardo AKA Fluffypony AKA one of the most savage on Crypto twitter:

 

Shitting on the Vezt team ($1.3m USD ICO) celebrating on a yacht at Art Basel:

 

More on ICO’s:

 

On DASH’s dumb fucking music video:

 

On Silicon Valley’s miss:

 

Replying to Snowden’s shills on twitter:

 

Last one, nice guy Fluffypony takes some time to help educate a kid on crypto basics. Little Charlie probably told his parents some random person on the internet gave him crypto advice, not realizing that it was actually the man behind a $6 bill USD marketcap cryptocurrency.

 

Metrics:

Price: $390 (0.02371 BTC)

Market cap: $6,049,140,198 USD

24 hr trade volume: $359,120,000 USD

XMRUSD Chart:

 

 

Price against BTC:

 

Exchanges listed by volume: majority of the volume is on Bitfinex, Poloneix, and Bittrex.

 

The on-chain transactions averages per day range from 7562 to 3182 (today so far) with a high of 8498. To put this in perspective, ZEC is at 13,200 and Dash at 16,391. This is most likely due to the high fees on the Monero blockchain. Hello bulletproofs.

 

And lastly, the average on-chain transaction volume per day for Monero, DASH, and Zcash:

 

 

 

Oh right, you can’t track Monero volume because its actually private.

 

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