Monero, Drug Dealer’s Cryptocurrency of Choice

For the cryptocurrency community, 2016 was a very good year. Bitcoin doubled in price. The far-out Bitcoin alternative Ethereum shot up by a factor of 10. But another, once-obscure cryptocurrency called Monero outpaced all of them, multiplying its value around 27-fold. That’s a windfall not just for cryptocurrency speculators, but for financial privacy advocates everywhere—including a few suddenly wealthy dark web drug dealers.
Over the last year, the value of the hyper-anonymous cryptocurrency Monero grew 2,760 percent, making it almost certainly the best-performing cryptocurrency of 2016. Today each Monero is worth around $12, compared with just 50 cents at the beginning of last year, and the collective value of all Monero has grown to close to $165 million. The source of that explosive growth seems to be Monero’s unique privacy properties that go well beyond the decentralization that makes Bitcoin so resistant to control by governments and banks. It’s instead designed to be far more private: fully anonymous, and virtually untraceable.
Those features have made Monero a budding favorite within at least one community that has a pressing need for secrecy: the dark web black market. In August, the darknet market site Alphabay began offering its thousands of vendors the option to accept Monero as an alternative to Bitcoin. A quick browse through the market today shows dealers of everything from stolen credit cards to heroin to handguns accepting the stealthier cryptocoin. That increase in illicit users also illustrates Monero’s privacy potential, says Riccardo Spagni, one of Monero’s core developers.
“That uptick among people who really need to be private is interesting,” says Spagni. “If it’s good enough for a drug dealer, it’s good enough for everyone else.”
Monero’s price in dollars since its creation.World Coin Index

Not Another Bitcoin
It’s tempting to think of cryptocurrencies in terms of Bitcoin—in part because many cryptocurrencies are Bitcoin derivations. Monero’s fully its own entity, though. First outlined in an October 2013 whitepaper by the pseudonymous figure Nicolas van Saberhagen and called Cryptonote, another pseudonymous individual known only as “thankful_for_today” later coded those ideas into a currency called Bitmonero. When open-source coders on the Bitcointalk forum disagreed with thankful_for_today’s directions for the currency, they forked it in 2014 to create Monero, whose name means simply “coin” in Esperanto.
Its structure solves several key privacy vulnerabilities that dog Bitcoin, which despite its reputation for secret transactions has long been stuck in a strange privacy paradox. Unlike commercial services like PayPal, Bitcoin allows anyone to spend money online without providing identifying details. But if someone’s Bitcoin address is linked with their real identity, any transaction from that address is entirely visible on the public blockchain, the accounting ledger that prevents fraud and forgery in the Bitcoin economy. Hiding those transactions requires taking extra steps, like routing bitcoins through “tumblers” that mix up coins with those of strangers—and occasionally steal them—or using techniques like “coinjoin,” built into some bitcoin wallet programs, that mix payments to make them harder to trace. “If I pay my rent in Bitcoin, it wouldn’t be that hard for the landlord to figure out how much money I earned if I don’t take extra precautions,” says encryption and cryptocurrency consultant Peter Todd. “Then they can decide whose rent to increase. You’re giving away information you don’t want to make public.”
Monero not only bakes anonymity features into the cryptocurrency itself, but implements a few features that Bitcoin still can’t offer. It uses a technique called “stealth addresses” to generate addresses for receiving Monero that are essentially encrypted; the recipient can retrieve the funds, but no one can link that stealth address to the owner. It employs a technique called “ring signatures,” which means every Monero spent is grouped with as many as a hundred other transactions, so that the spender’s address is mixed in with a group of strangers, and every subsequent movement of that money makes it exponentially more difficult to trace back to the source. And it uses something called “ring confidential transactions,” which hides the amount of every transaction.
“Even with big data analysis, the ability to farm anything out of the metadata is cryptographically negligible,” says Spagni. In future implementations, he notes that Monero will add the anonymity software I2P to mask not only users’ transactions on the Monero blockchain, but also the internet traffic underlying those transactions.
All of that makes Monero a significant upgrade for a cryptocurrency user’s financial privacy. Todd, for instance, says he keeps a small Monero account, but transfers bitcoins into it when he wants to spend his cryptocurrency more stealthily, using the exchange tool Shapeshift to transform the coins from Monero back to bitcoin before they reach the recipient’s account. “I basically use Monero to pay people with bitcoin anonymously,” Todd says.

The Monero Market
That strict secrecy also helps explain Monero’s darknet popularity. After Alphabay and a smaller dark web black market, known as Oasis, integrated the cryptocurrency last summer, its value immediately increased around six-fold. Alphabay told Bitcoin Magazine last month that the currency now accounts for about two percent of its sales. That’s a small fraction, but still likely amounts to millions of dollars in annual revenue, given Alphabay’s dominant position in the dark web drug market and estimates of that market’s total size and growth.

A screenshot from online black market Alphabay showing heroin offered in exchange for either Bitcoin or Monero.
Spagni says he expects Monero will no doubt be used in other potentially unsavory ways, too, like ransomware, and as currency for the gambling and porn industries. But he argues it will also be used for more innocent forms of financial privacy, like keeping your net worth secret while making routine purchases, or buying contraband like outlawed books in oppressive regimes. He also argues the uses of Monero are out of his and his fellow developers’ control. “I’m in no position to judge what people should or shouldn’t do, and no one else should be either from a code perspective,” he says.
Monero isn’t the first cryptocurrency designed to offer a financial privacy panacea: Dash, formerly known as Darkcoin, integrates the “coinjoin” technique that allows bitcoin users to mix their transactions with a few other spenders in what Todd calls a weaker form of anonymity than Monero offers. More recently, Zcash debuted with the strongest anonymity promises yet—it uses cryptographic tricks designed to make tracing a transaction not only unlikely, but mathematically impossible. Zcash has yet to be integrated into dark web markets, though, and still requires wielding the command line to use.
Despite the currency’s sudden spike in price, Spagni denies that he or any of the other core Monero coders are sitting on a massive pile of wealth. “We’re just working on this to see where it goes,” he says. But the promise and peril of Monero, of course, is that no one can check that claim. The stashes of the Monero developers, like those of its growing base of users, will stay secret by design.

Dark net drug dealers want a currency more anonymous than bitcoin, and Monero is gaining a bit of traction.
Not even bitcoin is anonymous enough for some criminals on the dark net.

For years, the cryptocurrency has been the payment method of choice for people buying and selling drugs and other illegal items on the dark net. But it presents a double bind: bitcoin is pseudonymous, allowing folks to buy meth with a degree of privacy, but it's also set up so that every transaction is traceable on a public ledger called the blockchain—not exactly ideal if you never, ever, ever want anybody finding out about your online habit.
Now, there's an alternative. On Monday, AlphaBay—the largest online market for drugs and other unsavoury items like fraud tools—announced on Reddit that the platform is adding support for an ostensibly super-anonymous cryptocurrency called Monero starting on September 1st, citing its "security features."
Read More: Bitcoin Isn't the Criminal Safe Haven People Think It Is
So, what is Monero? The first thing to know is that unlike most other bitcoin rivals, Monero wasn't built using bitcoin's own code. Instead, it's based on a protocol called CryptoNote that was first described in a 2012 whitepaper written by one "Nicolas van Saberhagen," an assumed pseudonym not unlike the one adopted by bitcoin's Satoshi Nakamoto. While Monero shares similarities with bitcoin, like mining and a blockchain as core mechanics, it has some big differences that help its users maintain their anonymity online, at least according to the currency's advocates.
Bitcoiners will often use a single wallet address, and all transactions connected to it are viewable by anyone. In contrast, Monero creates unique addresses for every transaction with a private "viewkey" that only lets the receiver, and whomever they give the viewkey to, access the full transaction information. In theory, that means no snooping by the feds. Monero also "mixes" coins automatically—basically jumbling one transaction with other similarly-sized ones—adding another layer of confusion for anybody trying to trace a transaction through the blockchain.
That selling point has buoyed consistent and low-level interest in Monero since its inception in 2014. On Monday, the day of the AlphaBay announcement, Monero was trading at a market cap of roughly $40 million USD compared to bitcoin's market cap of more than $9 billion. By early Tuesday morning, Monero's market cap was nearly $60 million.

"It's more secure than bitcoin since the transaction blockchain of bitcoin can be viewed publicly"
"It makes perfect sense for the darknet auction site to welcome Monero," Tyler Moffitt, senior threat researcher for security firm Webroot, wrote me in an email. "It's more secure than bitcoin since the transaction blockchain of bitcoin can be viewed publicly."
According to former Bitcoin Foundation head and security researcher Peter Vessenes, Monero gets "okay marks" on its core technology, but it could be overpromising when it comes to protecting the privacy of criminals.
For example, Vessenes wrote me in an email, the fact that there's still only a relatively small number of Monero users means that any massive transaction will stick out like a sore thumb: there just won't be many others of a similar size to mix with. That would defeat the coin's promise of privacy, especially for drug vendors moving large amounts of product.
"If you think about moving say $2 million in a currency like this, you're going to have a lot of trouble," Vessenes wrote. "Monero works by sort of combining up your transaction volumes with other similarly sized transactions in round amounts—it's going to be pretty hard to find people to do those large-scale moves with you."
"The switching cost from just using bitcoin to using Monero is going to be high"

For the average user sending small amounts of money, however, "My sense is that there is a larger anonymity set that you are a part of in Monero than within a bitcoin mixer," Jonathan Levin, co-founder of bitcoin blockchain analysis firm Chainalysis, wrote me in an email.
If Monero takes off on AlphaBay, it could create the critical mass needed to deliver on its own promises. It's a bit of a self-fulfilling prophecy: widespread use on dark net markets might drive increased investment in and usage of Monero, thereby solving the privacy problem created by a relatively small pool of users. Indeed, AlphaBay's Reddit post announcing its move to Monero stated: "We expect this to cause a spike in the price, so if you are an investor, now is the time to purchase Monero."
This isn't the first time a cryptocurrency promising better privacy than bitcoin has tried to break into the markets, making some users skeptical about the promise of Monero. Dash, a cryptocurrency that formerly went by the name Darkcoin, received substantial media attention when a few mid-sized markets implemented it in 2014. Two years later, Dash hasn't been implemented on any online dark net markets worth noting.
"The switching cost from just using bitcoin to using Monero is going to be high, since not only is there a tech shift, a trust issue, there is also greater volatility," Levin wrote. The $20 million overnight jump in Monero's market cap, while potentially indicating increased usage and thus greater anonymity, also means that the currency's value is highly volatile.
If Monero takes off, it just might be the super-anonymous currency that the web's secretive drug economy has been waiting for.

source:
https://motherboard.vice.com/en_us/article/monero-cryptocurrency-dark-net-drug-dealers-hope-more-anonymous-than-bitcoin-alphabay
https://www.wired.com/2017/01/monero-drug-dealers-cryptocurrency-choice-fire/

my thoughts ?
monero the coin that acts al nice,
but the darknet thinks different monero
is a chance to get money without anyone knowing where it came from
pretty shady right ?

Have a great day,
@BlockChainSupporter