what Monero is !?
a currency is NOT a store of value
In my previous post, I made a case for bitcoin, today I will be making a case for monero. I have been in the crypto space since it was called cryptography not shitcoins. I have looked into crypto trading and concluded, it is infact a casino, and not an exchange. You can try to win. And you should try… and Win. but the thing is, the House always wins.
The only “crypto” that matters is, bitcoin because, we are fixing money FIRST And everything else can wait, Because fixing the corruption of money will take care of everything else. But,
Today I am not talking about money but cash.
Because like money, cash is a problem with similar importantance, if not more.
Bitcoin is not fungible, what that means is, you can distinguish 1 bitcoin from another, hence authorities can identify where the bitcoin came from & hence block it.
Note, There maybe an increase in fungibility of bitcoin in the coming future but its only a hope right now (see Appendix A),
Monero is not money
Bitcoin is money, because for some asset, to be money, it needs governments and central banks to hold it, even if they don't like, holding it.
And even if its not a “legal” tender, if people use it, its money. And that has been acheived and we shouldn’t remake the wheel.
So BTC is money, Monero is cash, try to remember that.
Even though txn fees and tail emissions (see Appendix B) make us feel that monero can behave as money but as noted by me, above, we should'nt remake the wheel.
Monero is not an Asset
Taleb in his bitcoin “blackpaper” assumed that the interest in bitcoin will not be sustained.
But I have many reasons to beleive that assumption is wrong, it will be sustained because mining gives reward & money is a promise, not an “interest”.
Gold is maintenence free, but you still need to mine it physically and its not digital, hence can't serve the needs of the internet anyhow.
Monero is not Price
Either tail emissions is keeping the monero price against USD stable (even flat) or people don't want to “accumulate” it.
Hence people are mostly using monero as cash.
Speculative price appreciation of Bitcoin in USD terms makes us feel that we can't use btc as money yet, hence we must use monero as cash.
Why we need monero?
Lightning can be cash (I am not sure yet), lightning is mostly (https://lightningprivacy.com/en/introduction) private & fees are very low there (for now, and maybe forever), and settlement times a are quick like Visa, then why do we need monero?
It may take us forever to adopt lightning QR codes and point of Sales. Hence we have to rely on monero first, maybe lightning will never replace monero, but time can only tell.
Does Mining “profitabliy” decreases security of monero?
Mining monero is not “profitable” by design as you can't use fast machines to mine it to prevent centralization of hashrate (see Appendix B)
I may have miscalculated this, but with current highest CPU powers, we can't really make “money” on monero.
And the most interesting thing about monero is, when it was delisted from exchanges, the currency actually strengthened, and also when China banned monero mining.
Monero FUD debunking
The Basics
Monero block rewards will never drop to zero. Block rewards gradually dropped until tail emission commenced at the end of May 2022. At this point, rewards will stay fixed at 0.6 XMR or less* per block.
Due to block size penalties.
Why
Miners need an incentive to mine. Because of the dynamic blocksize, competition between miners will cause fees to decrease. If mining is not profitable due to a high cost and low reward, miners lose their incentive and will stop mining, reducing the security of the network.
Tail emission ensures that a dynamic block size and fee market can develop.
https://www.getmonero.org/resources/moneropedia/tail-emission.html
This tail emission enables two key features in MoneroA lower bound of network security forever (miners will always be able to rely on 0.6XMR per block, no matter the fee market)
A dynamic block size (Monero’s blocks can grow/shrink to adapt to short-term increases in usage, with a penalty to mining rewards during these times).
https://sethforprivacy.com/posts/dispelling-monero-fud/
“Bitcoin is not money yet, so expecting volatility to be low is illogical.”
Price volatility does not reflect the progress of Bitcoin adoption.
How else does a free-market money evolve?
If a new economic unit came into existence, and over time, without the assistance of government or central authority, is destined to overcome all obstacles and dominate the entire world as its preferred money and unit of account – what would that look like at the start? Would its price be volatile?
Absolutely it would be volatile. It certainly can’t be stable, it isn’t money and not everyone values it to be so at the start, and not everyone will accept it as payment.
This hypothetical example describes BITCOIN. The point to debate is not its current volatility, but whether it is destined to be the world’s money in the future. The volatility at the start is not an indication one way or the other if it will succeed, so please, stop mentioning it as a criticism.”
Only a money by decree (fiat) can be non-volatile to begin with, and even then it is because it is pegged by the government (with an IOU) to stable money (gold). New money arising from nowhere with no pegging is GOING to be volatile!
https://armantheparman.com/volatile/
Social Properties
“The number of people using it (Metcalfe’s Law: the value of a communications network is proportional to the square of the number of its users)
Fair (created without a pre-mine – ie the founders did not enrich themselves)
No central control
Sufficiently distributed with a tendency to further distribute (note: even distribution is impossible to begin with)”
https://armantheparman.com/volatile/
Schelling Point
When will bitcoin become money, and when will monero become cash?
The thing is, monero was cash on day 1, You don’t need timeframes for cash.
“Money” needs time to become money, and that time period is acheived as I have some reason to believe that states have private keys to hold bitcoin in their bags, hence the chasm has been crossed, bitcoin has successdully become money.
Tell parman that, he would be happy.
Appendix A: How will bitcoin become fungible?
joinstr.xyz provides fungibility despite soft forks, as it mixes PSBT's via nostr, it can be automated, via mobile-light nodes (https://github.com/lightninglabs/neutrino)
opCTV vs opCAT pools
https://github.com/taproot-wizards/purrfect_vault/issues/1#issuecomment-2513445570
Appendix B: Fungibility via Lightning
A video trying to explain why monero is not a shitcoin.
https://www.getmonero.org/resources/moneropedia/randomx.html
https://github.com/SChernykh/p2pool
I right now think that sender privacy with lightning is possible if you trust the channel (possibly node), the sender is on.
Also silent payments will make reciever privacy a thing.
References
https://www.fooledbyrandomness.com/BTC-QF.pdf
https://www.fooledbyrandomness.com/BTC-QF-appendix.pdf
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