So, fellow travelers... What exactly do we think is happening? If you don't like long posts... well sorry bout that. But Monero is at an interesting crossroads, and I want to examine it a little.
Some points I keep noticing:
-After some DNM closures WHM is now the largest market, and is (sort of) Monero only.
-Monero transaction count is rising organically and firmly for well over a year.
-Hashrate is up >20% in the recent short term.
-Twitter chatter among the more Bitcoin Centric chartists seems to be up quite a bit in the last few weeks
-The privacy/fungibility topic in the BTC Maxi space is at an ATH.
-The Samuria/Wasabi war is indicative of the above
-The IRS. Damn if that does not legitimize XMR?
As to the DNMs... It seems that "industry" may be finally coming to terms with the issue that using the coin with first mover advantage gets people put in jail, and funds seized over and over. I think the fact that BTC has remained the dominant money for DNMs is a strong testament to the gigantic power of network effect. The fact that people have made that mistake over and over is very interesting. But it seems to me that we are *possibly* seeing a shift here now. The use of Monero on DNMs has steadily (but slowly) increased, and as of today the dominant market is "Monero only" at least in their marketing. Last time I looked at it, they also allowed BTC which I still find astonishing. I can only assume the reason for this is there are large vendors who are still asking for that payment method. But the OpSec risk is becoming clearer and clearer. As a side note, this use case for Monero is such a multifaceted thing. I mean this is actually Bitcoin's first use case as well! And it is the ultimate test of a decentralized currency. But it also has a huge negative PR side. Bitcoin still suffers from the "Money used by drug dealers" narrative. And as it shrugs off that early title Monero seems to be taking the crown pretty solidly. This is proof that Monero may just be the king of the "shitcoins". And is cementing it's place as Bitcoin's dark little brother.
The transaction counts are supporting the above. It looks to me like Monero is one of the few projects from the last cycle that is not currently flat or dropping in use. Something crazy is going on with LTC, and ETH
transaction volume is just ending a gigantic increase, but also has effectively proven it's broken model over the last year via DeFi. But most of the other coins (ETC, BCH, DOGE, DASH etc) are either flat or dropping in use. Even the project that prides itself on transaction volume and block size has remained fairly flat as they pack their blockchain with weather data and Daniel Kravitz's cartoons.
Hashrate is another interesting topic. Not only because it is rising, but that it seems to suggest RandomX has not yet be "cracked" by ASIC makers. We have seen the expected Cloud/Botnet spikes, but otherwise Monero seems to have captured a hashing hardware sector, which is FAR MORE IMPORTANT than I feel is recognized. Monero is not competing with other projects for hashrate hardware. It fairly well owns the CPU hashrate base. In my opinion this makes it's security better than the popular comparisons you see in those "how long till a transaction is safe from double spend" charts. Coins that share hash algs risk being undone by an attack from farms of Asics. But Monero is running on commoditized hardware. This advantage seems to be missed by just about everyone aside from Howard Chu (Well, and the rest of us). This is another one of those weird Monero secret sauce things (like the blocksize strategy, and possibly the tail emission) that is either just missed by the masses or is even looked down on erroneously (think tail emission).
This is anecdotal, and personal, but I have seen a LOT of Twiiter crypto OG types talking about Monero recently. Including the more maxi-ish ones. This combined with the sudden focus on privacy, and alarms being sounded by the Bitcoin "influencers" around the ideas of attacks from nation states, rumors of laws against self custody etc combined with the almost ridiculous Samurai/Wasabi spat could not be more perfectly cuing up the question: "What about Monero?" I really enjoy listening to Matt O'dell as he champions a level of self custody responsibility that he has not figured out is virtually impossible. His standard practices are hard for anyone, and the masses are not going to be able to even begin to keep up. Calling someone a "cuck" for not keeping abreast on the latest coinjoin practices is not going to improve their privacy. The DNM situation just proves this. The answer is not in some pseudo religious level of best practices for Bitcoin privacy. This is fun to theorize about as you run (larp around with, really) Graphene and Tails when the answer to the question has really practically just been "SHUM" all along. I always get a kick out of the fact he often mentions Monero among his privacy rituals... I find it strange that it has not dawned on him yet that this is really the only one he needs. Let Bitcoin be the transparent chain it is. You want privacy? Well... It's much easier than you want it to be because you cannot admit there is at least one other legitimate crypto project in the world.
Finally a bit on the IRS. First of all this is a huge hat tip. Monero has their attention to the tune of throwing over a million dollars into a bug bounty for it. And this is also where the most risk is. I think the three letter agency's successes with breaking TOR and BTC chainanalysis has them thinking they might be able to do the same thing with Monero. And they might? We will see. But if they can't, well then what comes next? I think we have to be prepared for some fairly tough possibilities here. Monero might be the target of fairly draconian moves by governments. We have always known that could be in the cards... but from my perspective we are not many moves away from that eventuality if it is to come. My prediction is the chain analysis folks will eventually announce that they have successfully de-anonymized Monero (cue trumpet fanfare and outdated whitepapers!). Then we will have to determine if that is really true or more marketing or claims based on a previous version etc. And the IRS et al will do the same. If they are not satisfied then we might face the biggest boss fight so far. That will be worth it's own long post someday.
Happy Sunday heretics.
