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Unlike BTC and BCH, privacy coins like Monero don’t pretend to try to follow Satoshi’s vision of a global peer-to-peer cash system. In 2019, the Monero Outreach team released a statement saying, “Bitcoin and similar clear coins represent a huge step back from what the open society has offered us, and Monero was created in response.”
Instead, these altcoins function primarily to meet the growing needs of darknet markets to facilitate the trade in illegal goods and services. How? Providing a medium of exchange for libertarian users who want near-total anonymity, allowing anyone to instantly send digital money without leaving many clues. Since its launch in 2014, Monero has become the 14th largest cryptocurrency by market capitalization, with a market cap of approximately $ 1.4 billion.
Each Monero transaction obscures the digital addresses of senders and recipients, as well as the value of the transaction. It is designed to confuse transactions so that anyone examining the Monero blockchain cannot link payments to its source. The non-tracking and privacy feature carved into its design along with Tor’s IP address masking allows the token to be used for untrustworthy purposes and for illegal activities, including those involving drugs and gambling.
Monero is growing as a first choice for dark web markets, such as AlphaBay and Oasis. Europol has already flagged Monero and Zcash, along with other tokens, for use in internet-based crime. Not only has Monero become a sign of choice for evading law enforcement during illegal trade, but reports from cybersecurity experts show that it is also the primary sign for cybercriminals creating malicious software.
Cryptojacking is an attack in which hackers infect vulnerable systems with malware to steal their processing power to mine new coins. While Bitcoin mining now requires powerful ASIC hardware machines, XMR mining can still be done using a conventional laptop or desktop PC. Monero works on all major OS platforms such as Windows, macOS, Linux, Android and FreeBSD. And just a year ago, crypto-malware was estimated to have extracted nearly 5% of all Monero.
Because they can be difficult to track down, these privacy coins could potentially also be used in terrorist financing and are used by sanctioned governments. As previous reports from CoinGeek show, it has become the cryptocurrency of choice for rogue government nations seeking to evade sanctions. Network traffic for XMR mining from North Korea’s IP ranges has increased significantly since May 2019, making it the most popular digital currency to mine and outperforming the regime’s mining for BTC.
Are there any legitimate uses for privacy coins? Monero’s developers say the token’s characteristics make it a useful tool for companies looking to keep trade secrets. Users in repressive countries looking to avoid censorship or surveillance can also safely move money in the form of Monero, they say.
These same characteristics have led some cryptocurrency trading platforms to discontinue XMR support in recent years, citing the Financial Action Task Force (FATF) guidelines outlined last June. The absence of regulatory oversight ensures that Monero will always be a breeding ground for anarchists and criminals. While governments and finance ministries around the world are working to curb these tokens, businesses and legitimate businesses will continue to stay away so they don’t get caught on the wrong side of government investigations.
New to Bitcoin? Check out CoinGeek Bitcoin for beginners section, the ultimate resource guide to learn more about Bitcoin, as originally intended by Satoshi Nakamoto, and blockchain.
