How Monero Took Over Bitcoin's Unique User Base
As Bitcoin attempts to go mainstream, Monero, its privacy-focused progeny, is rising to the top of the cryptocurrency rankings by chasing Bitcoin’s old user base.
The early days of Bitcoin gained the first great cryptocurrency a reputation as dirty money. The Silk Road remains one of the first salient examples of a thriving Bitcoin economy, and even now the currency still has yet to completely shake off that reputation. However, as Bitcoin tries to move mainstream, Monero, a very privacy-focused digital currency, has rocketed to the top of the cryptocurrency rankings by going after exactly what took its predecessor to glory.
Bitcoin is better than fiat, but not by enough for regular people to care
The hard fact of Bitcoin that even hardcore fans must admit is that it’s not incredible enough to make everyone want to jump on board right away. Yes, digital distributed ledger technology is world-changing, and Bitcoin’s decentralized and efficient workings are far superior to what the old financial system can offer, but right now that doesn’t affect the average person’s life.
Banking services are highly entrenched and developed, while the Bitcoin economy is still relatively fledgling and niche, meaning that the contrast in the inherent virtues of each is not immediately apparent.
In the First World, the average middle-class person can swipe a card and pay instantly at thousands of merchants, shift money from accounts, make online purchases, and send funds around the world.
Sure, much of this would be cheaper and faster if done with Bitcoin (especially for international transfers between individuals), but not significantly enough where the average person would care to change their ways. The amount of time required to learn how to use Bitcoin just isn’t worth it to most people, especially if they aren’t properly educated as to all the ways in which they can save money and operate more efficiently.
Dark and illegal markets are the only ones who both need and can use cryptocurrency
While Bitcoin has certain advantages over the banking system, its benefits really shine for the unbanked. However, how many of the unbanked are lining up to jump on the crypto train? Many of them are lower class laborers or denizens of impoverished countries, meaning they are most likely to have low educational levels, have little disposable income, and spend the vast majority of their earnings locally.
For some of the world’s poor, learning about Bitcoin won’t improve their day-to-day, earn-cash-spend-cash lives. For others, the same technological and infrastructural barriers preventing them from using banks also keeps them away from cryptocurrency. And all need significant help and education to get started with profiting from Bitcoin use in the first place.
So, who has both the technical education and can derive financial utility from the use of cryptocurrency? Dark market buyers. These are customers who very well may have access to banking services and the education to take full advantage thereof, but nonetheless have a need for an alternative. Because the illegal services they peruse are either denied banking or purposely eschew it for privacy reasons, they need another avenue.
Cryptocurrency is a perfectly viable alternative, and because of this Bitcoin gained early traction with services such as the Silk Road.
Monero singularly pursued Bitcoin’s captive market
Now, Bitcoin’s claim over the dark markets falls to Monero. The privacy-centric cryptocurrency touted as being impossible to trace, contrary to its competitors seeking more mainstream adoption, deliberately sought out dark market integration. With the Alphabay and Sigaint integrations causing the value to rise over tenfold over the last couple of months Monero’s rise could even lead to illicit Bitcoin users changing stolen coins to cover their tracks.
Bitcoin, while struggling to make early gains in the mainstream markets, gained much of its initial popularity in the underground economy.
Now that the number one cryptocurrency has moved on to more above-ground uses, Monero, rather than follow these footsteps and seek public acceptance, has gone straight after the source of its predecessor’s former glory. So far, this strategy seems to be paying off, big time.