The privacy coin of choice for the darknet has seen a surge in price in the last 24 hours, although the jury is still out as to the cause.
Monero has seen an 11% rally, compared to bitcoin’s 4% drop and Ethereum’s 5% drop in the same period. This surge comes in the wake of significant announcements regarding the upcoming hard fork set to take place in July.
The hard fork would see improved network security and changes to transaction fees. The hard fork will take place after block 2668888. Monero is one of a few prominent privacy coins, such as DASH and Zcash, that obscure the participants in a transaction and the amount transacted using advanced cryptographic techniques.
The new hard fork is an entirely new blockchain version incompatible with earlier versions. The last hard fork occurred in October 2020, before this V15 upgrade, where fixes will be made to its multiple signature mechanism and ring size.
According to developer documents, multi-sig transactions require numerous signatures before being transmitted to the blockchain and carried out.
A ring signature is one where multiple parties contribute to a single unique signature to approve a transaction, making it impossible to trace the original sender. The ring size will increase from 11 to 16.
Community experiment could be driving rally
The price could also be driven by the community, which hypothesizes that many exchanges don’t hold the Monero they claim to, hiding behind Monero’s obfuscated ledger.
A Reddit forum user’s post alludes to this. “Monero’s obfuscated ledger has enabled a number of exchanges to misrepresent their reserves and sell XMR that they don’t actually have, knowing that all too many of us will never withdraw, and no one can see on-chain the evidence of their misdeeds.”
Now the community is busy with mass withdrawals, which may force exchanges to buy their own Monero to satisfy the withdrawals, driving up the price.
Should the Monero being withdrawn not exist, then this would confirm the hypothesis that the exchange never owned Monero, selling users fake or useless coins.
According to Vice, some Reddit users have claimed successful withdrawals from Kraken, while those drawing from Binance have experienced congestion issues.
Binance responded to a request for comment by saying, “Binance has a strict internal policy of not allowing any use of token holdings from users. We have an internal monitoring system to handle the reconciliation to ensure that the blockchain balance is the same as the system balance.”
Monero can be mined from a home computer to create more coins and does not require specialized mining equipment as Bitcoin and Ethereum do.
Monero’s history as a privacy coin
The Monero blockchain came into being in 2014 as a fork of another private coin’s blockchain, ByteCoin. Initially, it was used as a vehicle for illicit fund flows on the Dark Net.
More eerily, Russian ransomware group Revil demanded Monero as payment after hacking meatpacking company JBS, reported CNBC in Feb 2021.
And white supremacist Robert Warren Ray used Monero while on the run following a right-wing rally in Charlottesville that resulted in multiple deaths.
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