Incoming links: Privacy coin
The key difficulties of cryptocurrencies are:
- how do transaction fees/guarantees/times compare to centralized systems such as credit cards:Obviously, decentralized currencies cannot be cheaper to maintain than centralized ones, since with decentralization you still have to send network messages at all times, and instead of one party carrying out computations, multiple parties have to carry out computations.
- bitcoin.stackexchange.com/questions/1261/is-it-possible-to-send-bitcoins-without-paying-a-fee "The Blockchain Scalability Problem & the Race for Visa-Like Transaction Speed" (2019)
The battle for a scalable solution is the blockchain's moon race. Bitcoin processes 4.6 transactions per second. Visa does around 1,700 transactions per second on average (based on a calculation derived from the official claim of over 150 million transactions per day).
- towardsdatascience.com/the-blockchain-scalability-problem-the-race-for-visa-like-transaction-speed-5cce48f9d44
Crypto could however be close enough in price to centralized systems that it becomes viable, this can be considered. - how can governments tax cryptocurrency. Notably, because:See also globalization reduces the power of governments.
- taxation has to be progressive, e.g. we have to tax the rich more than the poor, and anonymity in transactions would weaken that
- it would be even easier to move money into fiscal paradises, and then just say, oops, lost my passwords, those coins are actually gone
Until those problems are solved, the only real applications of cryptocurrency will by illegal activities, notably buying drugs, paying for ransomware. But also paying for anti-censorship services from inside dictatorships. Illegal activity can be good when governments are bad, and arguably selling drugs should be legal.
For this reason Ciro Santilli believes that privacy coins like Monero are currently the most useful cryptocurrencies. Also, people concerned with their privacy are likely to more naturally make fewer larger payments to reduce exposure rather than a bunch of small separate ones, and therefore transaction fees matter less, and can be seen as a reasonable privacy tax. Also drugs are expensive, just have a look at any uncensored Onion service search engine, so individual transactions tend to be large.
Hedgint against inflation due to money creation in fiat currencies is a another valid argument for cryptocurrencies. Money printing is a bad form of tax. But why not just instead invest in bonds or stocks, which actually have a specific intrinsic value and should therefore increase your capital and beat inflation? Even if crypto did take over, its value would eventually become constant, and just holding it would lose out to stocks and bonds. And pre-crypto, salaries should adjust relatively quickly to new inflation levels as they come, though there is always some delay. Also, without anonymity, governments will sooner or later find a way to regulate and pervert it. If you want to do things without anonymity, then what you really have to fight for is to change government itself, perhaps with a DAO-like approach, or pushing for a more direct democracy.
If crypto really takes off, 99.99% of people will only ever use it through some cryptocurrency exchange (unless scalability problems are solved, and they replace fiat currencies entirely), so the experience will be very similar to PayPal, and without "true" decentralization.
For those reasons, Ciro Santilli instead believes that governments should issue electronic money, and maintain an open API that all can access instead. The centralized service will always be cheaper for society to maintain than any distributed service, and it will still allow for proper taxation.
Ciro believes that it is easy for people to be seduced by the idealistic promise that "cryptocurrency will make the world more fair and equal by giving everyone equal opportunities, away from the corruption of Governments". Such optimism that new technologies will solve certain key social problems without the need for constant government intervention and management is not new, as shown e.g. at HyperNormalisation by Adam Curtis (2016) when he talks about the cyberspace (when the Internet was just beginning): youtu.be/fh2cDKyFdyU?t=2375. Technologies can make our lives better. But in general, some of them also have to be managed.
In any case, cryptocurrencies are bullshit, the true currency of the future is going to be Magic: The Gathering cards. And Cirocoin.
One closely related thing that Ciro Santilli does think could be interesting exploring right now however, notably when having Monero-like anonymity in mind, would be anonymous electronic voting, which is a pre-requisite to make direct democracy convenient so people can vote more often.
TODO evaluate the possible application of cryptocurrency for international transfers:Of course, the ideal solution would be for governments to just allow for people from other countries to create accounts in their country, and use the centralized API just like citizens. Having an account of some sort is of course fundamental to avoid money laundering/tax evasion, be it on the API, or when you are going to cash out the crypto into fiat. So then the question becomes: suppose that governments are shit and never make such APIs, are international transfers just because traditional banks are inefficient/greedy? Or is it because of the inevitable cost of auditing transfers? E.g. how does TransferWise compare to Bitcoin these days? And if cryptocurrency is more desirable, why wouldn't TransferWise just use it as their backend, and reach very similar fees?
Cryptocurrency with focus on anonymity. Was almost certainly the leading privacy coin since its inception until as of writing in the 2020s.
Ciro Santilli has received and held considerable quantities of Monero, notably 1000 Monero donation. so bias alert.
As mentioned at Section "Are cryptocurrencies useful?", Ciro Santilli believes that anonymity is the most valuable feature that really matters on crypto coins, and therefore if he were to invest in crypto, he would invest in Monero or some other privacy coin.
localmonero.co/knowledge/monero-stealth-addresses?language=en gives an overview of the privacy mechanisms:
- ring signatures, which hide the true output (sender)localmonero.co/knowledge/ring-signatures Gives an overview. Mentions that it is prone to heuristic attacks.Uses a system of decoys, that adds 10 fake possible previous outputs as inputs, in addition to the actual input.So the network only knows/verifies that one of those 11 previous outputs was used, but it does not know which one.It's a bit like having a built-in cryptocurrency tumbler in every transaction.TODO so how do you know which previous outputs were spent or not?
- RingCT which hides the amounts.
- stealth addresses, which hides who you send toThis forces receivers to scan try and unlock every single transaction in the chain to see if it is theirs or not.The sender therefore can know when the money is spent, but once again, not to whom it is being sent.
Based on en.wikipedia.org/wiki/CryptoNote and like Satoshi Nakamoto created by under the pseudonym "Nicolas van Saberhagen" www.reddit.com/r/Monero/comments/7v2obe/offering_a_bounty_for_a_video_of_the_speech_by/
Coinbase has actually stayed away from trading it even as of 2019 when Monero was the third largest market capitalization crypto because of fear of regulatory slashback: decrypt.co/36731/heres-why-coinbase-still-hasnt-listed-monero. Although it must be said, the value of privacy crypto is greatly reduced when everyone is trading it on exchanges, which require a passport upload to work.
In 2024 they started making tumblers illegal:
So why privacy coins weren't fully forbidden then?
On 2024-03-18, Ciro Santilli received an anonymous 1000 Monero donation (worth ~126k USD at the time) to his self-custody wallet, which pushed him over his public plea for 100k USD goal to quit his job for one year.
The transaction ID was
5c6af4df39021f3a4a053ef169c9b397e6d6bf6c7e557d3f08e4e1675d7d3eed to self hist custody wallet with address 47kzoCeRMTohJhADejtsGmGimvQKzNsuST7u2aVhAD1VX5WDbh3v1FPUoJoTK3NTJVUgAM3dWCqC4Tmp9KSQaJi6GGYWgYn. This is a roof generated by his Monero wallet: InProofV2AVFBmFhofH4GoG5NsaDutkdNWRTaEhuFgHpHTkpprRmuZ54B8FdUwFp71gqfp2jJpDUrhB3GCzZ2p8CNbh2TW1Z88ShmYWEwtkZFLccEMw9PhH3vWcMVo9mKaRsH3WgJXqq9.Since this donation is so huge, it deserves some comments and a bit of a retrospective. The path to this donation has been an interactive one, and it is described below.
After starting the OurBigBook Project, Ciro started the sponsor Ciro Santilli's work on OurBigBook.com page on cirosantilli.com and setup some donation methods to help support the project, and possibly try to capitalize a bit on Ciro Santilli's Stack Overflow contributions.
His sponsors are absolutely crazy amazing people, but Ciro simply could attract a large enough amount of small sponsors to reach life changing amounts under those circumstances. This is partly due to Video "And I am not and never have been 'familiar' scene from The Big Short (2015)".
As such, Ciro came to realize more and more that the best approach would be to reach out to a smaller number of rich people, given that the things he works on niche, but may appeal to a particularly wealthy tranche of the population: STEM people. Other experiences and ideas that contribute to this realization are:
- the creation of the OurBigBook Fellowship, which as of writing consisted of a single donation. During this exercise, Ciro Santilli gave about 2k USD to help a promising Brazilian student. In doing so, he understood a lot about what goes on inside a "rich person's" head when considering a donation
- it is hard to decide who to donate to and find those people. In part because as soon as you create a public donation system with an application process, people will game the fuck out of it. Perhaps the Lost Horse LLC approach of "they find you" is the best?
- it is basically impossible to donate more than 1% of your net worth if you have a family. Even 1% you may be discouraged about. Perhaps with reason due to previous bad donations they have made.
- the increasing wealth inequality of this world, perhaps one of the greatest problems we now face
Then, whenever a larger donation would come through and surprise Ciro, he would improve his sponsor page statements. First a private 150 USD by an awesome sponsor. Then the 2023-09 ~810$ Bitcoin one. Finally came the 2023-11-20 100 Monero one. And it was that one that pushed Ciro to start his "100k USD = 1 year campaign".
Finally on 2024-03-13, Ciro received an anonymous 10 Monero donation to self-custody wallet. He had clearly stated that one should make a test donation to that wallet before the big one, so 10 Monero felt like it could be the test one. Ciro communicated the reception at: mastodon.social/@cirosantilli/112112988286298258 and twitter.com/cirosantilli/status/1769464788009066710:
I cashed out 10 XMR on @AgoraDesk for ~1,375 USD, and kept some change in the wallet for fun. This donation confirms that my self-hosted wallet and cash-out work just fine, so feel free to drop those millions whenever you want Mr. Anon :-)
Over the next few days, Ciro checked his wallet more often than his previously self imposed once a weekend max, and as expected, he found the big one on a slightly despaired around midnight sleepless night (partly due to parenthood). He was feeling particularly bored and a bit sad with his work life that night. And there it was. 1000 Monero on the wallet. Needless to say, not much sleep was done on that evening!!!
1000 Monero donation (~126,000 USD) reaction video by Ciro Santilli
. Source. 
Still of the reaction video after finding out about the big donation around about midnight
. Source. 
Screenshot of Ciro Santilli's Monero wallet with 1000 Monero in it just after the donation
. The following days were also tense, with Ciro having a trial by fire on selling large amounts of Monero on the UK, which is not trivial as it had been banned from all major exchanges. But he managed. Further notes on that at: www.reddit.com/r/Monero/comments/17arz9f/converting_xmr_to_gbp_in_the_uk/. Ciro also decided to keep about 200 Monero around just for fun as a crazy moonshot.
Another major factor likely Ciro having published his article: Section "Cool data embedded in the Bitcoin blockchain" in 2019. This is something he wrote entirely for fun during an intense 3 week side-time binge in 2019, though some large updates were made later on. It was this article that likely some crypto-dude attention to Ciro Santilli's profile. As of 2024, there is said to be about 20 crypto billionaires, so perhaps there are about 2000 crypto 10 millionaires[ref], which is the minimum net worth for a donation of 100k USD to be feasible (1% mark). And perhaps a reasonable number of them are just nerds who got rich, and want to improve the world. There are two lessons from this:
- follow your instincts, always. If something seems mega fun and quick, do it!
- making money from a few rich people (or entities like organizations) is easier than working for a bunch of poor people, because you have to convince less people. If you reach many poor people however, things are much more stable as you can lose a few customers and still be fine
Another factor in the donation, Ciro Santilli believes, is that many rich people thing that education is bullshit. Many successful people are neurodiverse and as such, it is only natural that a large number of rich people want to improve our educational system, which tends to be the very epitome of "boring and average normality" which Ciro Santilli so much detests. This can also be seen in people such as:
- Michael J. Saylor and his Saylor Academy
- Peter Thiel and his Thiel Fellowship
Announcements:
- pre-announcement before everything was clearly documented online:
- main announcement
Amazing reactions from the Monero Reddit community: www.reddit.com/r/Monero/comments/1brryao/ciro_santilli_received_a_1000_xmr_donation_to/These people have some serious trust issues!!! Perhaps not surprising from a privacy coin community. Ciro's Twitter post: twitter.com/cirosantilli/status/1775961945193017790
geonic_comments:Reaction video is fake. Very bad acting.
Inaeipathycomments:Well, anyways, I would be very unsurprised if this 1000 XMR was sent to him by himself for... reasons.
-TrustyDwarf-comments:Anyone mind to explain wtf this ugly piece of webpage reminding me of geocities from the 90s is about? I'd read it myself but I can't because it already gave me eye cancer.
rbrunner7comments:It's all quite strange. Never mind the 90s design, people built good websites already back then with the tools at hand, but even their "About" isn't very clear. If you need 5 minutes to be reasonably sure what it is all about they are still doing it wrong.
