Monero, (traded as XMR), had a massively successful year in 2016 in terms of adoption. It grew by 2,760% according to this analysis.
By comparison, Bitcoin’s market value grew by about 120% in 2016, while Ethereum’s market value grew by 760%.
In January we saw a range of forward-looking stories that basically characterize 2017 as a pivotal year for cryptocurrencies and blockchains.
One of the big promises of cryptocurrencies is that they allow users to engage in peer-to-peer transactions, or hold wealth privately.
Bitcoin, in its current form, falls short on this promise because there is enough information available on the blockchain to identify users and transaction histories with some data mining and data analysis techniques.
Monero, at least for now, solves the blockchain privacy problem by using something called “multilayered linkable spontaneous anonymous group signature,” which allows users to truly conduct transactions privately. The multilayered signatures basically shuffle user information in among other transactions on the blockchain, making it (at least for the moment) difficult to determine a transaction’s origins and exact details.
Not surprisingly, this level of anonymity makes Monero a popular cryptocurrency for people looking to conduct all kinds of illegal business. There was a great quote in a Wired article last week about Monero’s top secret capabilities:
“That uptick among people who really need to be private is interesting,” says Spagni. “If it’s good enough for a drug dealer, it’s good enough for everyone else.”
The quote is attributed to Ricardo Spagni, one of two of a handful of core developers that is not operating with a pseudonym.
Monero’s path to stardom
By now, cryptocurrencies are old enough that we can start to see patterns developing, and in many ways, Monero is following an already worn path.
Like Bitcoin in its early days, since its release in 2014 on a message board by a mysterious creator, Monero has been championed in the dark reaches of the internet. The promise of privacy brought attention, which in turn has caught the attention of investors and other crypto enthusiasts looking for the next big wave to ride. Just this month, the exchange Kraken started offering trades of XMR next to Bitcoin and Ethereum, signaling a legitimate future for Monero.