Editor’s note: Article updated for clarity.
On January 3, Monero officially overtook Litecoin and Ripple, solidifying its position as one of the leading cryptocurrencies in the market. There exists several major factors that pushed the market cap of Monero this past weekend including the Alphabay userbase, active development and integration.
Over the past 12 months, Monero and its development team received positive and optimistic recognition from leading cryptocurrency experts and cryptographers, due to its legitimate cryptography and technology.
It is one of the very few cryptocurrencies in the market that has an actual consumer base and commercial application. Monero is used by large-scale darknet or online marketplace called Alphabay, which settles over 2% of their sales using the digital currency.
In mid-2015, Peter Todd called out Monero and ZCash competitor Dash, describing the latter as snake oil and praising Monero for its genuine cryptography.
Without a doubt I’d choose Monero over Dash – the latter is snake oil, The former genuine cryptocurrency.
Monero is also developed on top of Bitcoin Core developer Greg Maxwell’s confidential transactions scheme, which allows the cryptocurrency’s ring signatures to hide amounts in Monero transactions.
“Monero’s invention of RingCT, which allows for Greg Maxwell’s Confidential Transactions scheme to work with Monero’s ring signatures, effectively hiding all amounts in Monero transactions,” said Monero developer Riccardo Spagni.
The applicability of a cryptocurrency is crucial for long-term development, survival and market adoption, primarily because it needs an actual user base.
At the moment, the majority of cryptocurrencies and assets in the market have little or no commercial application. Assets like Ripple, Augur and MaidSafeCoin that are worth tens of millions of dollars in market cap have had significant hype to supplement their increasing value but overtime, their lack of applicability is affecting long-term stability of these assets.
As time passed, more investors and traders began to realize the actual user base of Monero, which accounts for nearly 2% of global darknet users.
Another important factor that is driving the price of Monero is the integration of the currency by digital asset exchanges. This week, Kraken, a leading bitcoin exchange, announced the integration of Monero to allow users to trade bitcoin, cash and ether for the anonymous cryptocurrency.
In a statement, the Kraken development team stated:
Monero is one of the leading cryptocurrencies that has seen huge 40x market cap growth in 2016 and trades with high volume and liquidity.
If Monero continues to demonstrate high liquidity, increasing user base and trading activity, it is highly likely that the privacy-focused cryptocurrency may replace existing assets like Ethereum to become the second largest cryptocurrency behind bitcoin.
Image from Shutterstock.
Last modified: May 21, 2020 10:09 AM UTC