Monero Valuation – Update And Refocus

Monero Valuation – Update and Refocus

It only took about 2 days after I shared some thoughts on Monero valuation that I regretted doing so. Various other responsibilities have kept me getting around to sharing my updated thoughts, but I’m glad to finally be doing so now, with this note.
My regret hasn’t been so much around making an embarrassing technical omission (which I pointed out in it). Even with that, the directional and order-of-magnitude conclusions were still largely intact, it was an interesting idea to explore for me, and I’ve had some fun follow up email exchanges concerning modifications and refinements.
My regret was publicly focusing at all on an association between Monero and DarkNet/Criminal activities.
At the same time as I’m first and foremost interested in the truth, I believe that there are responsible ways to share it as well as reckless and ill-conceived ways to do so. I don’t think my article did a very good job on this front.
Unfortunately, because of the unique threat that Monero poses to corrupt fiat-money regimes, it (like Bitcoin, though more Bitcoin of yesteryear…. way way back, like, in 2016…) is increasingly being targeted and attacked to try and prevent public adoption. I expect this will increase as its profile rises.
One of the main ways this occurs is to try and convince people that it is associated with ‘bad stuff’ and people should therefore stay away. Whether it’s a CNBC (does anybody even really watch that anymore?) attractive but mindless reader of other people’s words on the teleprompter anchor-person asking leading questions trying to denigrate it, or stories of association with the Boogey-men of the day (“Evil North Koreans like Monero! Boo!! Hiss!! It’s Bad!! Stay Away!!), there is undoubtedly an active campaign to create negative associations in the public mind so that prospective adopters don’t look more closely and realize its true merit.[1]

By writing an article discussing Monero’s valuation potential as a ‘Dark’ coin, I unwittingly fed that association, and it’s for that reason that I regret it.
So let me here try and set the record straight. 
Monero’s real promise is not its ability to be successfully used in support of illicit or illegal activity. That is a valid trait, but is a relatively minor point.
Monero’s real promise is not that it’s a coin for people who value privacy, and hate the fact that we are all routinely, continually (and illegally for the most part) spied upon by governments, their cronies and puppet-masters.  That is again, a valid trait, and one that is deeply connected with the bigger story – but is still not quite ‘it’.
The big story of Monero is that it is uniquely positioned (and far more so than any other cryptocurrency – and therefore as a true successor to Bitcoin) to displace corrupt fiat money and bring back sound money.
Sound Money is a tough concept to express to the average person. Most people don’t even realize that there is anything wrong with the current fiat money system, much less that many societal problems are intimately connected to Fiat money being unsound. To name just a few of the connected issues (and without explaining them in great detail, as I do so here) they are:
         Inflation: Despite technological advances that (according the ‘futurists’ of years ago) should have us all living in a world of 3-day workweeks (or less) and material abundance for everyone… more and more people (even intelligent, hard-working people!) struggle to keep up with rising prices for homes, food, fuel, healthcare, and all manner of basic living expenses.
         Increased wealth inequality: Those closest to the ‘spigot’ of new-money creation (starting with the banks) benefit the most from fiat monetary policies. Everyone else foots the bill – contributing to our current situation where the vast majority of wealth is concentrated in a small fraction of the population… with the rate of that transfer increasing and concentrating.

         Social & Political Engineering and Interference: With an unlimited ability to create and control money, whatever projects and plans those who control the money supply desire can be attempted and/or implemented: even if they are horrible and morally reprehensible things like war, repression, and propaganda.
Monero, as sound money, has the potential to significantly contribute to the healing of much of the damage caused by Fiat systems – and it can do this by working to correct these persoalan closer to their root causal level. By bringing the system back to equilibrium at a very mendasar basis, social and economic systems will begin to organically reflect core adjustments.
But what is sound money? Much has been said (by me, and others) about the requirements for money to be sound… but that can be confusing for a lot of people. So let’s take a different tack and talk for just a moment about what sound money is NOT.[2]

Sound money cannot be created out of thin-air by an un-elected, un-accountable, and often sociopathic ruling class.
Sound money cannot be used as a means to track, trace, spy-on, or control the people who use it.
Sound money cannot be used to institute a stealth theft of wealth on its user-base through inflation.
Sound money is not the result of people and efforts aiming to ‘get rich’ by launching a new coin.[3]

Are you starting to grok me on the bigger picture? It’s not about picking what the next most-pumped ICO is so you can maybe afford that car/house/thing you currently *can’t* afford. It’s about working to correct the mechanisms of a broken system which on the one hand tells us that we live in a world where our species has conquered the elements, harnessed subtle and powerful forms of energy, and approaches creating new forms of life (organic and inorganic) … and on the other hand tells us that it’s perfectly acceptable that the vast majority of our species struggles to ’work hard enough’ to provide enough for themselves and their families without having to either go into debt or rely on handouts… both of which are so conveniently provided by the very same institutions which corrupted the system in the first place!
The story of Monero is the story of money – sound money. In case you didn’t know, Monero actually means money in Esperanto… a language created by a man over a century ago who dreamed of people coming together in a more evolved degree of consciousness and level of connectedness.
There are currently conversations going in within the Monero community to figure out how to best communicate this message – ideally with a short tagline that is digestible for even the average layperson. There are a lot of suggestions floating around, and I have my own opinions (everyone does, right?) If you’ll humor me on this little soapbox, I’d like to make a pitch to you of my personal favorite, along with my reasons. (note: there’s no particular reason why you should listen to or like my idea better than anyone else’s… but this is my blog, right? you can at least hear/read me out :)) 
Monero: Sound Money.
The first thing this does is identify Monero as ‘money’ – which is different from most other coins, and hopefully gets people’s ears to perk up – after all, most people like money, right?
As far as the word ‘sound’ – well, I recognize this may take a little more exposition, and the process of informing people on what it means will probably be slow. But it is true and powerful in its implications – encapsulating all the other features of Monero – especially the privacy aspect which is necessary for fungibility (focusing solely on the privacy aspect though, while massively powerful for the libertarian elements of society, may unwittingly paint Monero in the public’s mind as something only useful for when you want or ‘need’ privacy… never mind illicit associations that confuse the issue).
While ‘sound’ may not translate well into other languages (a better translation might at times be ‘true’) I think that’s OK. The soundness of money is such a big and important concept, that sticking to it and forcing people to do a little learning to grasp its meaning could actually be a useful way of ensuring that people ‘get’ it: as opposed to something that is immediately obvious and digested – but perhaps with a shorter shelf-life.
Finally, there is an aspect of ‘Sound Money’ that some people might consider a little tame, or boring. But ultimately, money is not meant to be super-exciting, snappy, or witty. It’s a tool meant to facilitate human value exchanges, for the real bigger purpose – allowing us all to live and enjoy our day to day lives. Keeping the tagline relatively subdued and without lots of glitz and flash is to me taking the high road – ennobling rather than sensationalizing its profound importance. Getting people to ‘buy Monero’ but without an understanding of how it’s truly different from other cryptos might pump the price for a bit, but won’t do anything to engender what’s really needed for broad adoption and success – raised awareness.

Since this is a piece (nominally) on valuation, I’ll give a little tidbit for the dreamers (and ‘creative visualization enthusiasts’ alike).
Considering Monero as a serious and viable successor to not only Bitcoin but Fiat money, the formula for valuation is really quite simple (and I’ve shared it before):
= {[Global Money Supply Penetration] x [Global Money Supply]} / [Number of Coins]
While long-term success is still a big question-mark, this is what we’re “playing for”… and so the numbers for believers are ‘roughly’: 
$80 trillion  x [5% to 50% ] / [let’s say for simplicity 20 million coins]
 This would put the price sasaran in the wide-wide range of between $200,000/coin to $2,000,000/coin… or 500x – 5,000x current values.
All that said though, I will finish by sharing what I consider to be the single best slide ever produced on Monero’s valuation (courtesy of Fluffypony) – and which I think speaks the loudest about it’s true prospects for success.
P.S. the most appreciated form of support is an earnest email or message (on twitter, or even criticism is great so long as it’s constructive! but as a few people have asked me to include it, a monero address that may receive donations/support if you feel so inclined is :

[1] That Monero is grouped along with other ‘privacy coins’ is another unfortunate obstacle that needs to be overcome. That DASH –  a ‘privacy coin’ which I liken to the Club in its inability to deliver privacy – has a bigger capitalization than Monero will I think be looked back upon as nothing short of an absurdist testament to the power, albeit temporary, of deceptive and manipulative marketing.

[2] Note: some of these traits are direct results of adhering to the 4 positive traits of sound money: Store of Value, Unit of Account, Medium of Exchange, and Fungibility. Others are ancillary or indirect traits.

[3] Especially those that steal the codebase of another coin, and despite not having a meaningful developer community, relentlessly pump the rip-off. Yes, I’m looking at you Electroneum.

Seriously Though – Delete The Facebook App From Your Phone.

(This may not seem directly crypto-related… but it’s actualy quite closely connected. If you don’t see the linkage, I invite you to do some research on Monero which appreciates the need for privacy.)
I’m not telling you to not use Facebook.  If you want to keep using it, by all means keep doing so on your desktops/laptops. If it doesn’t bother you that they mine you for data, track all your activity on the internet (and physical locations), filter your news-feeds so you only see the censored content they deem appropriate – then by all means go ahead (but if you want more reasons to ditch it altogether, check this out. Never mind that you might actually find more time to do other neat things… like engaging with the real world and stop exposing yourself to ridiculous, unrealistic and unhealthy depictions of reality).
But seriously, delete the App from your phone.
Why now? Well, if after this week’s Snowden revelations don’t convince you, I’m not sure what else to say.  So let’s recap what we know about Facebook and their App.
1)   Facebook, like other big internet companies, has deep connections to the U.S. spy and surveillance community.  In what’s now old news, it’s clear to anyone who stops to think with a clear head that  (at the very least) if Facebook has the data, so too do the spy agencies.
2)   This week, the Intercept released information that the NSA had basically perfected not only voice transcription, but also voice recognition algorithms… ABOUT 10 YEARS AGO. In other words, they can not only listen to a conversation, but write it down word-for-word with the identities of all the speakers. You can only guess how much more advanced it’s gotten by now.
3)   Facebook has been surreptitiously recording user conversations on their smartphones (through the phone app) since at least around 2014. (when you agree to the Terms & Conditions, you give them the right to do it whenever they want). Even when you have the app turned off. It doesn’t matter. They are listening. Yes, that’s why you ‘suddenly’ noticed advertisements for snorkelling gear when all you did was have a chat with a friend about snorkelling. They are listening, and using that information.
But now let’s put it all together, and see what you as a Facebook (phone) user can expect to be happening:
When you have your phone anywhere within earshot (in your pocket will do), it’s reasonable to expect that full transcription of ALL your conversations are being recorded, along with the statements and identities of anyone you’re talking to. The conversations would be scanned, analyzed and stored – not just for ‘marketing purposes’ and residing on Facebook servers, but on NSA servers where true to form of any spy agency, dossiers are no doubt being collected on all people – with flags thrown for any reason they deem fit, and with a fantastic ability to keyword search any/all conversations indefinitely.
When you have Facebook on your phone, not only are you compromising your own privacy, security, and liberty – but you are potentially doing the same for anyone and everyone within earshot around you.
Unfortunately, even writing this article is something of a Catch-22. People realizing that they are more-and-more being spied upon can have a chilling effect on free-speech as people increasingly self-censor themselves… especially as they realize that they may be surrounded by ‘unwitting spy-agency accomplices’. But the downside of not making people aware at all are, I think, worse. Awareness is required if we are to evolve. There’s no free lunch.
Friends don’t help spy agencies spy on Friends.
Thank you.

Monero Is For…

Follow @cryptoizzy

(If you want to skip my intro, just scroll down to sections: Monero is for Porn, Monero is for Pot and Monero is for Guns)

Monero is the Esperanto word for money, and I’ve reached the conclusion that money is precisely what Monero is. In previous articles, I’ve referred to money as being either sound or unsound, but I now believe that was the wrong approach. ‘Sound or unsound’ isn’t the question. The question is – “is it or is it not money?” Right now, there is nothing else on earth I am aware of that is also money[1], with the exception of precious metals (though they have very different medium of exchange profiles, and thus, usefulness). Of course this may change over time, and new forms of money may present themselves (for instance, with zk-starks), but for now, this is it.

Current fiat currency systems, which our world uses now, are not money. True money doesn’t allow a group to create money at whim, and direct it to whom they like. This violates the store of value rule. Fiat currency systems are in reality, just tokens – created and distributed by a select group who decide the rules for use.

Bitcoin and other alt-coins are not money. Because of the way they have been designed, privacy is at best optional (though often non-existent), and consequently, identifiable histories can be linked to transactions[2]. This is problematic for a number of reasons, but simply put, privacy is a technical requirement for fungibility, and fungibility is a binary and necessary trait for something to be money. And so, Bitcoin and other altcoins are not money… tokens, yes – and designed to be a better store of value than Fiat, but still not money.

Using something as money that truly is money has the potential to solve a lot of the problems of today’s world. It can do this by providing an alternative to our current broken monetary system which is currently riddled with such absurdities as engineered inflation, massive wealth inequality and endlessly funded institutionalized violence. This is why I, and so many others are excited by Monero’s potential as the only cryptocurrency that is money. But history has shown repeatedly the best product doesn’t always win. Marketing plays a huge part, and there are other coins (from Bitcoin to Bcash to Dash) which have far more significant marketing programs (whether centralized or decentralized).

But marketing is only ultimately effective if it gets people to buy and use the product being marketed. This tells us that the real driver for competitive success is adoption and use. And here’s where I see a real opportunity for Monero – because Monero, as a private and fungible money, has use cases with which no other altcoin or fiat note can compete. It is adoption and use that will ultimately determine whether Monero will be successful, and in that vein, I offer three real, legitimate use cases which I believe can facilitate its adoption and use as something more than a speculation or investment vehicle.

Hey, I’d love it if the average-joe understood all the societal and macroeconomic implications of using cryptocurrencies in general and Monero in particular. But I’ll happily settle for than same average-joe simply using Monero, and let time and experience further educate him on the bigger issues. In fact, this approach might just be what tips the scales –  transforming Monero’s potential into kinetic reality. And if that man on the street doesn’t want to defend Monero by citing his porn, pot, or firearms habits – well then, he can just tell his friends he doesn’t like being spied on.

Monero is for Porn  ( #pornero!)

From a porn user’s perspective, this is a no-brainer. Anyone who subscribes to a porn-site today and pays for it with anything other than a truly private payment method means their whole porn-history can be tracked and linked to their real-life persona (sorry Verge, but just because Pornhub has for some reason picked you, doesn’t mean you’re any good). For a lot of people, this is not an acceptable prospect, and so they either don’t subscribe at all, or try not to think about what would happen if the porn or credit-card companies sell this isu (to private industry or government) or are hacked (remember the Ashley Madison leak?). But using Monero to pay for porn would break that link, and (assuming a user connects through a trusted VPN), provide the privacy which the vast majority of porn users want.

From a porn company’s perspective, offering Monero as a trusted payment method would be hugely profitable. Right now, only about 4% of porn-viewers actually ‘convert’ to paid users. In other words, 96 out of 100 porn-viewers never pay. But if a truly private way to subscribe were available (i.e., Monero) then each *1* of these 96 people who took advantage of this option and became a paid subscriber would translate into a profit[3] boost of 25%! In other words, if you run a porn-business… what are you waiting for? Set it up for Monero payment and boost your profits – don’t let Mariah Carey have all the fun.)  The same really holds true for all sex-industry businesses, but I’ll leave that for you to ponder those implications.

From a Monero adoption perspective, this would be enormous as well. Best estimates are that 77% of Americans view porn once a month, or 77% x 325 million = 250 million users[4]. If only 1 out of 100 of these viewers became subscribers with Monero, then that would be an increase of the Monero user base[5] of 2.5 million people! If they on average spent $15 a month for subscription, then that would generate annual required Monero purchases of 2.5M x $15 x 12 months = $450 million in the U.S. alone!

Monero is for Pot ( #reefero? #gangero?)
Marijuana is increasingly legal in the U.S. (and other parts of the world), but the stigma associated with it continues to be very real. Never mind that if your insurance company believes you are a user of recreational drugs they’re likely to charge you higher premiums – legal or not. Tack on to this that a lot of credit-card companies won’t even bank pot dispensaries, and it’s no surprise that they so frequently transact in cash.

Using (and dispensaries accepting) Monero for marijuana purchases would be a terrific solution – providing privacy (that credit card acceptance wouldn’t provide, even if it was offered), allowing for remote payments, and saving dispensaries from the logistical difficulties of holding large amounts of physical cash. Of course, just like in the porn example, to the extent that having a new, truly private payment option convinced more people to become customers, well then – it would clearly boost sales.

Finally, it’s worth noting that there have been attempts in the past to create cryptocurrency specifically for marijuana transactions (potcoin). Ultimately though, as these coins are not truly private, they can’t hold a candle to Monero, and are instead more novelty than a scalable business payments solution.

Monero is for Guns
This is probably the most controversial of the three ‘fors’ I list here – even though what I’m speaking about are legal gun purchases as supported by the U.S. Constitution. I have (by and large) no desire to argue either side here, and am simply pointing out a use case that would be extremely valuable to participants in that economy.

Many gun purchasers do so under the auspices of the 2nd amendment, which they will tell you has nothing to do with hunting, and everything to do with protecting citizens from a corrupt and tyrannical government[6]. As such, it would make sense for these purchasers to want to keep their purchases private in the event that a ‘coming for your guns’ scenario plays out.

Well, unfortunately for them, outside of using cash, their options are quite limited. Credit cards intimately link the guns to purchasers, and compilation of this data is actively being developed (though I personally would be shocked if it hasn’t already been done – and these headlines are just warming up the public to the official announcements).

Yet again, Monero offers a solution – truly private transactions – effectively anonymous digital cash. I won’t run through the numbers here on market opportunity for gun shops to accept Monero – but suffice it to say that any offering which makes it easier for their customers to make new purchases will of course boost business and profits.

However, I will quickly run through the Monero adoption scenario. It’s estimated U.S. Gun and Ammunition stores generate annual revenues in the neighborhood of $3.1 billion.  If just 5% of those purchases are made with Monero, that equates to an incremental annual ‘Monero purchase demand’ of $155 million – again, in the U.S. only!

Summing Up

If you are in the Monero community, you might be annoyed at me. You might be saying, “Hey Izzy – thanks for nothing. We’ve worked so hard to fight the wrong and unfair stigma of being a ‘dark coin’… and now you’re associating Monero with pornography, pot, and guns?!”

If this is how you feel, first let me say I understand your position. I would however offer three points for you to consider.

1)    The single most powerful long-term indicator of any alt-coins success is whether people use it. With numbers like those illustrated in this article, Monero would be catapulted into the status of one of the most used cryptocurrency worldwide – if not the most. And as we know, success breeds success – use breeds use. This could be a fantastic springboard into mainstream awareness and adoption.

2)    The more people use Monero, the more people with defend Monero.
We in the Monero community understand that it represents the single biggest threat to the established monetary system since Bitcoin. And since Bitcoin has been beaten, sites have been set on attacking Monero. But if a significant portion of the populace uses Monero, it will have more defenders and supporters. Furthermore, the fact that there are so many non-porn/pot/gun related reasons to be a Monero supporter gives the average user plenty of air-cover to defend it without announcing him or herself as a porn user.

“I support Monero because I believe in privacy, fungibility and sound money. Oh – what’s that you say? People use it for porn? Ah well, cest la vie. I certainly wouldn’t use it for that! But it’s still vital to our civil liberties!”

3)    There’s a delicious irony to harnessing people’s “base” habits and desires to facilitate healthy societal change.

While the ‘Powers that Be’ seek to corral and control the masses with bread and circus, here we are, harnessing those very same base-impulses (at least with regard to porn) and redirecting them toward a mechanism that may actually help free the masses from a corrupt monetary system. What can I say? I like the sound of that.


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[1] Yes, I am dictating my own definitions. But where have the standard economic definitions come from? And do they do what definitions are meant to do – describe the world around us in the best way possible? I believe my change here does a better job of this.

[2] Anonymity sets will simply never consistently be large enough without default privacy through the chain’s direct ecosystem. That this also means Bitcoin can ultimately be used as a surveillance and control mechanism illustrates how important it is that we avoid things that aren’t true money.

[3] Assuming gross margin of incremental subscribers is near 100%.

[4] Let’s assume that these are all online users.

[5] Assuming they weren’t already Monero users.

[6] Have you seen “The Handmaid’s Tale”? Would that dystopia have been possible if citizenry had arms to protect themselves? Just asking.