The Fortunes of Monero - Bitfinex blog
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The Fortunes of Monero

While the crypto community’s gaze was fixed on Bitcoin reaching a new all time high in price this week, a significant yet underreported development unfolded with privacy coin, Monero. It saw a delisting from Binance last month, which resulted in a sharp drop in its price, only for it to not only quietly and resiliently bounce back, but also set a new record in daily transactions. It has now almost fully recovered to its pre-delisting price point, leading many to humorously refer to it as a stablecoin and privacy project that cannot be stopped.

The King of Privacy is Dead, Long Live the King

Binance, the world’s largest cryptocurrency exchange, recently announced the delisting of Monero (and several other privacy coins), a decision that led to a sharp downturn in the market value of XMR – the token of the Monero project – to a 20-month low. Many in the crypto community feared the worst and predicted doom and gloom for the world’s largest and most popular privacy coin by market cap. Surprisingly however, XMR has rebounded in a way which many never saw coming.

XMR is regarded as the king of privacy coins, particularly due to its ability to ensure anonymity and transaction security. Monero offers some core functionalities like stealth addresses, ring signatures, bulletproofs+, dandelion++, and confidential transactions, which allow private transactions to take place. Monero’s architecture offers a level of privacy and security that aligns with the demands of users prioritising discretion, leading to its large scale acceptance and use in the more privacy-conscious corners of the internet.

The delisting, which also includes other tokens like Aragon (ANT), Multichain (MULTI), and Vai (VAI), led to the XMR price dropping from $166.74 to $100.27. The event also created a flurry of Fear, Uncertainty, and Doubt (FUD) within the cryptocurrency community, contributing to the negative price trajectory observed in the short term. Furthermore, this situation sparked a broader discussion within the crypto space about the future of privacy coins, the role of exchanges in shaping market dynamics, and the ongoing negotiation between privacy, regulatory compliance, and market liquidity.

In the aftermath, the crypto community has been left to speculate on the long-term implications of such delistings for privacy-focused cryptocurrencies. The incident also serves as a reminder of the challenges that lie at the intersection of innovation, privacy, and regulatory acceptance.

A Phoenix Rises From the Ashes

Monero has demonstrated remarkable resilience in the face of adversity. In a dramatic turn of events, XMR staged an impressive price recovery to $150 USD per coin, merely weeks following its delisting. This rebound not only underscored Monero’s enduring appeal, and the importance crypto users place on privacy, but also solidified its reputation as a coin of exceptional fortitude. The community’s reaction, humorously dubbing Monero a “stablecoin” due to its relatively stable price amidst the crypto market’s volatility, reflects a blend of admiration and jest for the cryptocurrency’s consistent performance.

This remarkable recovery and surge in transactions underscore Monero’s robustness and growing utility, challenging previous scepticism about its durability in the face of regulatory hurdles. Monero’s transactional milestone against Bitcoin’s price surge also highlights a broader narrative in the crypto space, emphasising the importance of privacy, scalability, and practical use cases alongside market valuation.

This resilience is further exemplified by Monero’s record-setting achievement in daily transactions, which hit an ATH of over 100k transactions this week, which is almost double the previous ATH. At this point it’s not clear if this explosive growth in transactions is organic, or some sort of flooding or spam attack or stress test being conducted by unknown parties. On March 5th, 2024, Monero reached its highest number of daily transactions so far, processing an unprecedented 96,495 transactions on its network. This milestone is not just a numerical triumph; it signifies the growing adoption and utilisation of Monero for its intended purpose as private P2P digital cash. The increased transaction volume demonstrates the coin’s scalability and the effectiveness of its dynamic block size, which adjusts in real time to meet demand, ensuring low fees and efficient processing.

Monero’s recent surge in daily transactions marked a significant event, putting its dynamic block size mechanism to the test for the first time under such high network demand. Dynamic block size adjusts the size of blocks in real time based on transaction volume, and was instrumental in ensuring the blockchain could scale efficiently on-chain while maintaining low transaction fees. In contrast to Bitcoin’s fixed 1MB block size, which can lead to a competitive and sometimes costly environment for securing transaction space during peak times, Monero’s algorithmic approach to block size adjustments demonstrated a practical, on-the-fly scalability solution. 

This ability to adapt to transaction volume ensures that Monero not only supports user demand but does so while keeping costs minimal, thereby proving the effectiveness and viability of its on-chain scaling strategy in a real-world scenario. This stark difference highlights the innovative design choices behind Monero, aimed at optimising network capacity and user fees in ways that other blockchains have yet to implement.

Monero has showcased not only the technical merits of its privacy and scalability features but also a deeply committed community that values the principles of privacy and financial autonomy. This situation highlights Monero’s unique position within the cryptocurrency space as a project driven by ideology and utility rather than speculative interests alone.

Monero’s incredible recovery and continued growth in a challenging environment sends a powerful message about the value of privacy and the strength of decentralised, community-supported projects. In an era of increasing regulation, Monero stands as a bastion of privacy, proving that a dedicated user base and a focus on fundamental values can sustain a cryptocurrency through turbulent times. As Monero continues to chart its course, its resilience sets a precedent for privacy-focused cryptocurrencies.

Monero Price 

In the shadow of the delisting, an interesting phenomenon has emerged within the Monero community. Rather than viewing this event with disdain, the community has embraced it as an opportunity to emphasise and celebrate Monero’s true purpose: facilitating private peer-to-peer transactions. Monero proponents claim that Monero successfully delisted Binance, not the other way around. This reaction underscores a profound commitment to uncompromising privacy, resilience, and antifragility, qualities that are deeply embedded in the ethos of Monero’s supporters. The delisting event has, paradoxically, served to reinforce the community’s dedication to privacy and financial sovereignty, principles that Monero stands for.

The Monero community’s reaction to the delisting by Binance is not just a testament to the determination of the community itself, but also a bold statement against centralisation and opaque practices. By celebrating this moment rather than lamenting it, Monero enthusiasts are signalling a shift towards true decentralisation. This incident has illuminated the path forward for Monero: a renewed focus on its core mission of providing a secure, private means of transaction that stands apart from potential market manipulation and reaffirms its place as the leading privacy coin.