Cryptocurrency Monero’s analysis indicates a bullish trend

Summary

• Monero was launched in 2014 by a team of developers led by Ricardo Spagni and is currently the 26^th largest cryptocurrency.
• In Monero’s original white paper, its creators argued that Bitcoin’s main flaw was its traceability, further adding that the most important aspects of electronic cash are its privacy and anonymity.
• Monero’s “ring feature” ensures the sources of funds remain untraceable to any parties involved in the transaction.
• Ironically, hackers have demanded they be paid in Monero instead of Bitcoin due to its use of encrypted technology.
• Cryptocurrency exchanges have shied away from privacy-focussed coins like Monero on their sites due to the increasing regulation and legislation.

Altcoin, Monero (XMR), has generated a solid return for investors in the past and analysis indicates a bullish uptrend in the near future. This is despite hackers from all over the world recently demanding their ransom to be paid in Monero.

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As Monero’s popularity has grown significantly amongst individuals who value their privacy, the very privacy that Monero offers is being exploited by ransomware hackers who have increasingly demanded Monero as payment.

What Is Monero?

Monero was launched in 2014 by a team of developers led by Ricardo Spagni. It is ranked as the 26^th largest cryptocurrency and has a market capitalisation of around US$4.082 billion.

The main distinguishing feature of Monero is its privacy-focused development, which allows users to trade the coin anonymously.

Monero achieves this privacy by including something known as the “ring feature”. This feature means that the sources of the funds remain untraceable to any parties involved in the transaction.

The method it uses is to split up the total amount used in the transaction into smaller amounts giving each part a unique one-time address. This, in turn, makes it very difficult to pinpoint exactly which mix of 200 XMR belongs to the recipient.

Moreover, the algorithm needed to mine the coin is updated every six months to provide strong security guarantees. As such, it has become the go-to option for those purchasing on the darknet due to its robust security features, which even outweigh the security of Bitcoin. This is despite the fact that, like Bitcoin, Monero is a peer-to-peer decentralised cryptocurrency.

Monero -  a victim of its own security

In Monero’s original white paper, its creators argued that Bitcoin’s main flaw was its traceability, further adding that the most important aspects of electronic cash are its privacy and anonymity. The creation of Monero was designed to fix this flaw.

Despite its security, Monero has recently been the target of ransomware attacks by a Russian hacking group called REvil.

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Ironically, hackers have demanded they be paid in Monero instead of Bitcoin due to its use of encrypted technology.

Two other pirate hacking groups – DarkSide and Babuk – allow payments in either Bitcoin or Monero. However, they charge a 10%-20% surcharge for those paying in Bitcoin.

As a result, it is estimated that Monero is now used for 10%-20% of ransoms. Furthermore, it’s predicted that figure may reach as high as 50% by the end of this year.

Monero’s dark reputation

Monero’s strong emphasis on privacy has also garnered it a reputation for only being used by those wishing to purchase illicit substances and services from the dark web Indeed, many sites on the dark web dealing in everything from guns to illicit drugs and pharmaceuticals have shifted to only accepting Monero as payment.

While Monero’s emphasis on privacy and anonymity has led some to believe that pirate hacking groups will soon only accept Monero as payment, there is an argument that a complete switch to Monero seems unlikely due to its sourcing difficulties. This essentially means that the very fact that Monero remains obscure when compared to the likes of Bitcoin, hackers will refrain from exclusively demanding it as they want as little resistance as possible when it comes to negotiating payment.

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Legislation Concerns

As cryptocurrency becomes increasingly mainstream, regulation from government bodies and law enforcement is inevitable. Cryptocurrency exchanges are very aware of this and have shied away from including privacy-focused coins on their sites.

Ransomware negotiators are more than aware of the restrictions this poses and are therefore less likely to demand Monero if sourcing it exclusively is difficult.

Monero was trading at US$226.91 at the time of writing.

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