Among the cryptocurrencies that are traded in the market regularly, Monero offers a sui generis feature that distinguishes it from the rest. To the experienced traders of this currency, it is well known that the feature is to offer an untraceable transaction system with complete anonymity of the user. Since its inception in 2014, the developers of Monero have given their utmost attention to the anonymity of every possible transaction. As in the crypto-world, the word “untraceable” is synonymous with “invulnerable” or “secure”; this coin has become one of the leading Altcoins currently available in the market. While the transactions made by using the most popular cryptocurrency Bitcoin can be tracked quite easily, Monero offers an alternative recourse to the investors.
However, very recently, some issues have been pointed out regarding the anonymity factor. According to some crypto-connoisseurs, these issues can actively take part in jeopardizing the ostensibly “untraceable” nature of Monero transactions, eventually making it vulnerable to hacking and other malicious activities.
Here, some aspects regarding this anonymity issue would be discussed along with some other reasons why traders all around the world should keep a close watch on this currency this year.
The Flaws in Monero:
Crypto-experts have recently found out two flaws in Monero’s design that can turn its untraceable transactions into partially traceable. According to Per Wired, a team consisting of researchers from renowned educational institutions like MIT, Boston University, Princeton, Carnegie Mellon, University of Illinois, etc., Monero is programmed to mix a decoy named “Mixins” in each of its transactions. Although Monero is untraceable, the Mixins can be tracked down eventually making the actual transaction traceable. The two flaws in Monero’s design include:
- In the beginning, this digital currency used to allow the users to opt out a privacy protection system as per their requirement and spend coins with no Mixins. The problem with this system is that, when an already spent coin makes another appearance as the decoy, it can be quite easily identified form the mix and eventually the actual Monero transaction can be identified as well. However, as a preventive measure, you would need at least 4 Mixin decoys now to carry out a single Monero transaction so that the others would remain perplexed about identifying the real coins from the mix of decoys.
- According to the researchers, the timing of the transactions is majorly responsible for the second flaw in Monero’s design. They inferred that in any mix of several faux coins along with one real coin, the real one is most likely to be sent last. As a result, analyzing the timing of these transactions can efficiently track down the real cryptocurrency amongst the bunch of fake ones. An efficiency rate of 90% has been determined for this theory in tracing a Monero transaction.
Recent Updates and Preventive Measures:
After the recent revelations, the development team of this cryptocurrency has performed several development updates to regain the unmitigated anonymity of Monero. To nullify the second flaw, the usual sequence of sending the real coin last has been altered as well. These updates made a forthwith impact on Monero as the figure 90% success rate is reduced to 45% while tracking down a Monero transaction.
The Current State of Monero:
Surprisingly and quite admirably, the recent revelations of Monero are yet to make an impact on its current individual coin price ($190.92 on 28th March 2018) as well as on its overall market capitalization (approximately 3 Billion USD on 28th March 2018). This coin currently holds the eleventh position on Coinmarketcap among nearly 1600 currencies currently listed. The price chart of Monero also exhibits a steady upward trend.
Keeping an Eye on Monero:
Despite the revelation of the flaws that can vitiate the most important feature of this cryptocurrency, Monero is still one of the safest currencies in the market. Its anonymity feature might not seem as impregnable as it previously seemed, but there is still no possible way to identify the user making transactions even if the real coin is tracked down. Also, Monero is one of the most stable currencies that were able to hold on to their prices during the recent market debacles. Therefore, keeping a close eye on this currency can come to fruition by the end of this year for many traders.
We will be updating our subscribers as soon as we know more. For the latest on XMR, sign up below!
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
Image courtesy of Jessica Weimar via Flickr