Direct from the desk of Dane Williams.
Ah, here we are back again questioning whether privacy coins are dead in 2022.
The answer of course being that no, privacy coins are not dead and the fact they are being delisted from centralised exchanges mean that they’re doing their job as intended.
This discussion comes on the back of today’s news that two prominent South Korean crypto exchanges have said they will delist Litecoin (LTC) because of new privacy features enabled by the protocol.
Bithumb and Upbit have taken a stand and stated that Litecoin’s newly activated Mimblewimble Extension Blocks (MWEB) network upgrade, conflicts with anti-money laundering (AML) regulations in South Korea.
Yes, Upbit.
The exchange that our Korean friends use to pump and dump HIVE without having the faintest idea of the decentralised project we’re building here.
But that’s one for another day…
Getting back to Litecoin and while these South Korean exchanges may not see the volume pass through them required to really trash the market, it does mean that it’s only a matter of time before the major US exchanges follow suit.
Cue the crypto Twitter meltdowns…
But before the inevitable crypto Twitter meltdown, I’m here to offer a voice of reason around privacy coins.
That’s right, delisting privacy coins from centralised exchanges is a good thing.
Remember, the end goal here is to still build decentralised, permissionless money.
Of which, the fungibility advantages that privacy coins have over their counterparts running on open blockchains, will play a key role in reaching.
The fact that governments and major regulatory agencies are putting pressure on centralised exchanges to delist privacy coins simply shows that the tech has passed them by.
The cat has been let out of the bag so to speak and there’s no stuffing it back in.
So relax, there is no need to have that meltdown after all.
Privacy coins like Monero (XMR) and Litecoin post Mimblewimble are still untraceable in 2022 and will continue to be as the network effect takes hold and more and more transactions are done using coins with these features.
Everyone is looking at privacy coins from the point of view that number go up.
When people talk about price, 99% of the time they’re not talking about a sustainable equilibrium price.
They’re talking about exchange volume driven pump and dump price, built on nothing more than hype.
I know that this is going to hurt your head, but…
In the case of privacy coins, price doesn’t matter.
What matters is that the network is decentralised and secure so your transactions and wallet addresses that you use to transact, stay private.
That is all.
In my opinion, the future of privacy coins is extremely bright.
They are and will continue to play one of the most important roles within the parallel running crypto ecosystems that continue to form.
While the fact that they are essentially going to be excluded from centralised exchanges and thus the Web2 connected, regulated parallel means that their price isn’t going to go parabolic.
This doesn’t affect their base use case of secure, private transactions which will ensure the network will always incentivised to be securely run and thus maintain some value.
No, that equilibrium price may not be a moonshot, but once again, that’s not the point here.
In terms of network security, checking back on the XMR mining pools, it seems Monero has minimised the risk of being 51% attacked.
As long as Monero is safe and secure, it will maintain value and be used.
The tech has passed regulators by and at this point it literally doesn’t matter what they do surrounding privacy coins.
At this point, regulators are just wasting time and taxpayer dollars.
Privacy coins are here to stay and people are free to choose whether to interact with them or not..
With a major part of most country’s financial laws based around the concept of anti money laundering, obvious the fact privacy coins allow you to conceal the identity of wallets and transitions just doesn’t fit.
But ultimately, this renewed push for the regulation of privacy coins will simply force innovation to move faster and ensure their full integration with DEXs where regulators are unable to touch them.
Remember the UniSwap debacle?
UniSwap the decentralised protocol is different to the front-end website that the company UniSwap Labs owns and operates.
Even though the US government doesn’t want their citizens using the UniSwap Labs’ front-end to swap tokens they consider dangerous, the decentralised nature of the protocol itself ensures that the capability remains.
The concept is exactly the same with stablecoins and once THORChain (RUNE) integrates Monero into their platform, it’s essentially game over.
Permissionless, cross chain swaps without the need to use an intermediary such as a wrapped token like you see on most DeFi platforms.
With access to what may as well be unlimited liquidity.
Privacy coins are far from dead.
They are going to not only change crypto, but the entire financial system structure as we know it.
Best of probabilities to you.
