On February 21, Russian President Vladimir Putin signed recognition of the “People’s Republics” of Donetsk and Luhansk through Russia. On February 22, he sent troops, whereupon the Ukrainian President Volodymyr Zelenskyj declared a state of war in his home country. The European and American bodies have been meeting since February 24 and since then have gradually initiated a series of vpn sanctions against Russia. These are increasing in severity day by day.
Due to Russia’s uninterrupted acts of violence, the EU decided on the night of February 27 to 28 to exclude Russia from the SWIFT system. During the same period, the price of the privacy coin Monero (XMR) skyrocketed. Overall, the XMR token is up over 20 percent over the past seven days and is trading at $179.03 at the time of writing. Is this a coincidence?
Monero, the largest privacy coin
This question cannot be answered with certainty, because one (actually the) The core characteristic of Monero is that it is a private coin, and very little can be said about its users and their use. with stealth addresses, Ring Signatures and Ring Confidential Transactions (Ring CT) around 30 developers have made every effort to turn this cryptocurrency into a digital, anonymous cash counterpart.
This has so far found a relatively large following. XMR currently has a market capitalization of just over three billion US dollars, making it the 45th largest cryptocurrency. At the same time, Monero is the largest privacy coin in the entire crypto space, ahead of zCash and Dash. Released in 2014, the currency is based on the CryptoNote protocol and describes itself as “secure, private and untraceable”.
But it is precisely these properties that could currently make the privacy coin attractive for the Russian population and their companies and thus possibly explain the price increase of the last few days. Other, more transparent cryptocurrencies, such as BTC, have also seen higher prices and new wallet owners with large volumes in the past week.
How does Monero anonymity work?
The three properties mentioned make the crypto currency one of the most anonymous in the crypto space. The use of stealth addresses for the receiving person to be veiled. The succeed by generating one unique Public keys per transaction. At the same time, the recipient receives a one-time use private key to “search” and retrieve the sent money in the blockchain.
In addition, it is possible through ring addresses allegedly unable to locate the senders involved. Because there will be one group of cryptographic signatures created. This contains at least one real participant. However, the remaining signature-giving actors are also validated, which means that it is not possible to determine from the outside who from the group actually commissioned the transaction. At the same time, so-called key identities are used to ensure that no transactions can be issued twice.
Ring Confidential Transactions ensure that the transaction amount is disguised. Imagine a wallet with a total of 50 XMR. You want to use this to buy an item worth 4 XMR. To do this, the purse must put the 50 XMR on the table, but will get back 46 XMR while the remaining 4 go to their new owners. For the next item that costs 4 XMR, the wallet will have to pay 46 XMR again and get the remaining 42 back.
One should not conclude from this that the Monero coins are not divisible, because the amounts can actually be broken down to the twelfth decimal place.
The usage
As these anonymous properties suggest, neither government nor regulators have found much joy in the digital currency so far. There have already been several attempts by the American and European authorities to take action. One reason for these efforts, as BTC-ECHO reported in the November magazine issue, is that Monero is a common payment method for drugs, weapons and the like on the dark web.
One can now speculate as to whether the Russian population is to blame for last week’s surge in XMR prices or the Ukrainian ones. The former population group would probably have every reason to protect their money from a possible devaluation and continue to participate in international trade, the latter might be looking for quick opportunities to buy weapons and ammunition. The Monero blockchain will not reveal it.
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