This time I had the pleasure to interview the Monero team. Pioneers of the private cryptocurrencies. A open source project aiming to empower the citizens giving them the control and responsibility of their own funds.
How would you describe the main pillars of the project?
Security, privacy and fungibility. Especially fungibility is key for Monero since no coin can be distinguished from any other. There are no coin tainting or blockchain analysis possibilities in order to blacklist specific coins, since every single coin equals any other and has no visible history.
About the team, what are your strengths?
Monero is an open source project without any centralized organization or company behind it. Any developer interested in the project can join and most of them contribute voluntarily, however there is a forum funding system (FFS), which allows anyone to suggest an idea which needs funding and the community is free to support it: https://forum.getmonero.org/#category-2
I will mention just some projects funded this way:
- Kovri, an I2P implementation for Monero, which completely hides the users’ IP addresses similar to TOR
- Two full time mathematicians and researchers for several months ongoing in the Monero Research Lab
- Dedicated Monero open hardware wallet development
- Monero integrations for several online shop systems without middlemen
- Kasisto, a Monero based point of sale solution
Beside that Monero has a very strong core developer team which is providing continuous contributions to the project. Just this year we finally got a GUI wallet, mandatory RingCT transactions and faster node sync.
Every decision is openly discussed with everyone who is willing to contribute and there is no centralized leadership.
Monero Research Lab is independent from the developers and reviewing new code, researching improvements to the protocol and releasing research bulletins on top of the cryptonote whitepaper.
Do you have any concern about the Monero block size in a mass adoption scenario?
Monero transactions are much larger than Bitcoin transactions due to the ring signatures. Real privacy comes with a price but there is ongoing research how to optimize it. However, Monero already has a dynamic block size and dynamic minimum fees. Based on the median block size of the last 100 blocks a miner is allowed to increase the size of his block up to 10% for free or even more but then gets a penalty on the block reward. This mechanism ensures that very low fee transactions will not increase the block size to spam and try to disturb the network.
The Cryptonote codebase on which Monero is based is completely different than Bitcoin’s so it’s much harder to integrate it in existing wallets or other applications, since everything has to be coded from scratch. However, we can see much interest from multi coin wallets like Coinomi or Exodus and also Hardware wallets of which at least Ledger is already making good progress.
There are already thoughts on Layer 2 solutions and sidechains for better scaling, but there is no urgent need yet to implement them yet, since we have a dynamic block size and for now most blocks don’t even hit the minimum block size.
What’s the added value of Monero in comparison with other competitors like ZCash, Dash, PIVX, or Verge?
All Monero transactions require full mandatory privacy unlike the mentioned coins. In all other private crypto currencies so far privacy is optional and hardly used, since it’s complicated and/or isn’t supported by wallets. Zcash has not even 400 fully shielded transactions a month, Dash uses CoinJoin mixing over Masternodes where you have to wait for partners to mix with and it takes hours. PivX does exactly the same like Dash, but it’s even smaller and you have less partners to mix with. When it comes to Verge, there is no difference in privacy compared to Bitcoin over TOR and all transactions and balances are transparent.
Only Monero offers fungibility where each coin is exactly the same like any other, since you cannot “taint” it based on its history. Like with cash you don’t have to care if it previously has been involved in anything you wouldn’t support, a $10 bill is always worth the same and the same is with Monero. You can’t say if it’s freshly mined or has been used anywhere before unlike coins with a transparent blockchain which can be analyzed by anyone and one might get accused for someone others’ actions.
100% of Monero’s currently ~4,000 transactions per day hide the sender, receiver and the amount of the transaction. In other coins with privacy features there is maybe a handful of such transaction and it’s hard to call it private, when you are one of a few others. Monero is the only private coin which has no rich list, since it’s not possible to build one.
Valuation of the current scenario for Monero and the blockchain industry.
Unfortunately there are many useless projects getting funded with crazy amounts of money through ICOs but having no value at all and will probably never deliver. This bubble will burst sooner or later and it might have an impact on the whole crypto market and also valuable projects.
Probably this correction will affect the whole market, but after that first dip, valuable projects should recover well and the fishy projects will be shaken out. Maybe this will help the industry to mature and get more attention in the mainstream.
Are you concerned about the controversy related to malicious usage of anon currencies?
Not at all, since every solid technology will also be used in malicious ways, but that’s not the focus for Monero. The main currency for illegal activities is still cash, gold, money transmit and (offshore) banking services. Privacy is not a crime, but a very essential good in our society.
TOR, I2P, VPN, encrypted communication or encryption in general have mostly legit usage, but also are used by some criminals. If we start to include backdoors, they sooner or later will be found by malicious actors and probably do more harm than positive things.
Thinking about the future, do you have any roadmap with relevant upgrades?
Monero has one of the most active development in crypto currencies and there are a lot of updates coming in the near future. We have regular scheduled protocol upgrades called hard forks and they make big changes possible, but there never has been a real fork resulting in a chain split yet, since we always had consensus.
Just to mention some of the more important upcoming updates:
- Subaddresses which will allow you to hold multiple public addresses in one wallet without the possibility of being linked by any third person are ready and waiting for the next release.
- Multisig which is for example needed for trustless escrow is also finished, now only under review by the Monero Research Lab
- 0MQ is almost ready and will optimize the communication between (light) wallets and the Monero daemon and push notifications of incoming transactions.
- Official GUI is being ported to mobile, both iOS and Android.
- A custom, Monero-only open hardware wallet is being developed.
- Kovri, an I2P integration for Monero is making good progress and will close the gap with the only information is leaked using Monero: IP addresses. However already today, an observer can only see that someone is running a Monero node, but not if any transactions are done.
Additionally there are two full-time researchers being funded by the community for research on scaling possibilities and improving the protocol in general, so probably much more to come.
Thanks Paul Janowitz for your time and valuable insights about Monero
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