If you ask Riccardo Spagni–aka FluffyPony on Crypto Twitter–about who should invest in Monero, get ready for a pushback. “Monero’s probably not an investment. It’s designed to be a currency, and in particular it’s designed to be a privacy-preserving currency.” says Spagni. Spagni is a builder who pushes norms in crypto, a community still defining what normal even looks like. I talked with Spagni about Monero and what makes it so different from other privacy coins.
Spagni had been working as a developer in a corporate office, and worked on breaking the Bitcoin codebase in his spare time. When the first trustless, default privacy protocol, CryptoNote, came out, Spagni’s interest piqued. He got into Monero for its unique codebase which launched while most of what was coming out were copies of the Bitcoin blockchain. He started mining Monero at its launch, participating actively in its community before becoming its lead maintainer and a vocal advocate for the internet’s most popular privacy coin.
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For Spagni, Monero is not only a cryptocurrency with its own unique codebase; its setup reflects his beliefs.
“I’m a big advocate for personal privacy. I think that it should be a basic human right. The way all our data has just sort of been splurged online through hacks and compromises and malware and sometimes our own stupidity, we’re in a situation where privacy-preserving projects are a necessity. ” Spagni says.
How It Works
Monero uses sophisticated cryptography to hide where transactions came from, their amounts, and their destinations. one-time-use stealth addresses, allowing someone to receive funds at the same wallet address multiple times, while always displaying a unique and untraceable interaction on the Monero blockchain.
While many cryptocurrencies including Ethereum are taking an interest in adding zk-snarks, the zero-knowledge proofs used by Zcash aren’t a part of Monero. As a decentralized, open source project, Monero’s developers have used a variety of methods to keep transactions private including one time stealth addresses, ring signatures, and ring confidential transactions.
Auditing Privacy
Privacy can be a double-edged sword, providing the benefit of hidden transactions but also raising the chances of nefarious activities such as illegal drug and weapon sales. While Monero obfuscates wallet addresses, essentially hiding who is transacting, it’s a misconception that it can’t be audited, but the decision to turn over this information is in the hands of the wallet owner.
“Monero is auditable. You can take the view key and you can give it to a third-party auditor or the IRS. Since the view key feature is cryptographically linked to your wallet, there’s a guarantee no one can manipulate or hide certain transactions associated with the wallet address,” says Spagni.
A view key allows someone other than the address owner to view all incoming and outgoing transactions without being able to spend funds.
“In terms of regulation in general, the community doesn’t have control over anything like that and can’t really influence it,” Spagni adds, “We largely take a hands-off approach; we work on an open-source project for the benefit of everyone around the world that can use it and that should use it and how regulators treat that is largely out of our control.”
On Tari And ICOs
Lately, Spagni’s been spending most of his time working as the CTO of Tari. Tari, launched in July 2018, is a blockchain protocol for event ticketing, with the goal of removing middleman services so artists receive the majority of ticket sales. Spagni plans to build Tari on top of Monero.
I asked Spagni about reconciling the need to fundraise with his disdain for ICOs. In Tari’s Reddit announcement, in response to a question about doing an ICO, Spagni wrote, “I’ll slay you where you stand.,” indicative of his strong stance against ICOs as a fundraising tool.
Spagni says, “My problem with ICOs is not the act of selling targets, it’s that it’s being done in an environment where there is a lot of murkiness both from a regulatory and an ethical perspective. Right now, we have no regulatory clarity on whether ICOs are legal or not. ”
Many people view ICOs as a chance for retail investors to get in early on cryptocurrencies before they go to market, as private fundraising cuts out opportunity for everyday people. The reality, however, is that many crowdsales sell out before the public gets a chance to invest regardless. “ICOs get snapped up in like 12 seconds by a bunch of engineers who are able to pay more gas than the little guy in the street,” says Spagni.
While Spagni builds Tari, the Monero community continues to grow, with more than 500 developers having contributed to it since its creation. When more defined regulation intersects with Monero and other privacy coins, it will be interesting to see their ability to adapt.
–Correction 2/7/19 Privacy setting CryptoNight was changed to privacy protocol CryptoNote.
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