The Token Valuation Canvas should help investors making the right decision when analyzing potential project investments. We have evaluated the Monero project using the BlockchainHub Token Valuation Canvas. Please note that classifications, categories and descriptions used in this canvas only represent a proposal of how a token could be evaluated.

Disclaimer:
This token valuation is based on a personal opinion and for information purposes only. It is not intended to be an investment advice.

Basics

Type of the token

The token which is used on the Monero Blockchain is called XMR. The transaction from one account to another lasts only a few seconds. It is an intrinsic token because, like Bitcoin, it is used to write to the blockchain by paying transaction fees. The transaction fee depends on the number of inputs, outputs and the ring size. Due to the “Ring signature technology” the transaction fees are much lower than compared to Bitcoin. At the moment (12.2017) the fee is at 0.24$ per kB depending on the factors mentioned before and the priority.

Role of the token

Monero (XMR) is a usage or utility token. At the moment you can only use it for transactions.

Supply

Current supply: As of 16.10.2017, 15.23 million XMR are in existence. As an example: the increase of XMR during a month was more than 100k tokens -> Current supply of 15.345.839 XMR on 13.11.2017.

Total Supply: There is no maximum concerning Total Supply. Once the total number of XMR will reach ~18.4 million, the money supply will stop decreasing and stay at a constant rate of 0.3 XMR/minute. This is meant to provide an incentive to secure the blockchain even after 18.4 million coins will be distributed.

Inflation rate: Subsequent annual inflation <1% -> 0.3 XMR/minute with a small reduction per year, but will never reach 0. -> Perpetual tail emission. Click here to have a look at a graphical forecast for the inflation rate per year.

Distribution: Since Monero uses unique one-time addresses for each transaction, no overview concerning coin distribution is possible.

Viability of Project

Legal status

Categorised as a security? There is no information about a categorisation by the SEC (US Securities and Exchange Commission) for Monero.

Where is the company registered? Monero is a distributed, decentralized platform which has developers all over the world. They are not registered anywhere.

GitHub Commits

How many? Monero’s GitHub has 16 repositories but only a few of them are regularly updated.

How often? There are code commits on a regular basis, every few minutes/hours the main repositories get updated.

Are they simulating commits? By checking the code history on GitHub, it is easily visible that the commits are legit and not only typo fixes.

Is it forked from another project? Monero is a fork of Bytecoin. Monero inherited (almost) all of its code. There were a couple of small changes (e.g. different block time and emission schedule) but most of the code was similar to Bytecoin’s code. Over the years, Monero has largely deviated from the Bytecoin (and CryptoNote) code. The progression can be read in detail in the 2014 and 2015 years in review.

Is the code open source? Yes, the code is open source.

Devs/Team

Background: Monero was created by “thankful_for_today” – an unknown person on the internet. He/she played the role of a dictator and the community rejected this, therefore another team “forked away”. -> Riccardo “fluffypony” Spagni & Francisco “ArticMine” Cabañas. The main active person in the community seems to be Riccardo Spagni. He has 15.5k Follower on Twitter and has also made more than 15k tweets. The Monero Project had well over 200 contributors over time. Here are a few of them: moneromooo, Thomas Winget, Howard Chu, mikezackles, oranjuice, warptangent, rfree, jakoblind, tomerkon, and anonimal (Kovri). Most of them are anonymous or just known due to their username.

Track record: The Core Team members are Riccardo Spagni and Francisco Cabañas. Riccardo “fluffypony” Spagni has been involved with cryptocurrency-related projects since 2012. Francisco “ArticMine” has actively researched and invested in cryptocurrencies since 2011 and focuses on the economic, social, regulatory and long-term viability aspects of cryptocurrencies.

Welcomed by the community? Due to the fact that Monero can be seen as some kind of rival for Bitcoin, as it offers a similiar form of transaction-system, it was probably not so welcomed by the BTC-community. However, the demand obviously rises, as Monero’s price skyrocketed more than two years after launch.

Long term commitment? Riccardo Spagni is contributing to other ICOs and is also coding for other Cryptos like for example Electroneum, so he doesn’t seem only committed to Monero but he recently held a presentation at the North American Bitcoin Conference in 2017 and gave an Interview in Las Vegas concerning Monero.

How big is the team? Like already mentioned before, Monero had over 200 contributors over time but only 7 of them were core developers. Therefore, only around 3-4% of the whole team are developers.

Do they have a big professional network? They mostly have online communities. They have their own forum which is actively used by the community with over 2800 replies and over 1000 different threads. Monero’s online community is quite big, they have a long Bitcointalk-thread with over 1800 Pages. Furthermore, the Monero-Community Reddit has more than 850 Readers.

Since when are they active in the community?

Riccardo “fluffypony” Spagni has been involved with cryptocurrency-related projects since 2012.
Francisco “ArticMine” has actively researched and invested in cryptocurrencies since 2011 and focuses on the economic, social, regulatory and long-term viability aspects of cryptocurrencies.
“Smooth” is a software developer, entrepreneur, and investor. “Smooth” has been involved in several cryptocurrency projects since 2011, including development of the first multicurrency exchange (initially supporting Bitcoin and Namecoin). By virtue of his long-standing involvement in the cryptocurrency community, he is well known and trusted by many.
“othe” is based in Germany, he has been interested in cryptocurrency since early 2011. Currently he works as an independent consultant for various cryptocurrency-related businesses. He is known for his previous work as a core Vertcoin developer.
“luigi1111” is hailing from the Midwest, USA and is a sysadmin. He has been actively involved in several cryptocurrency projects since 2013 and loves cryptography, probability, and english grammar.
“tacotime” is a bioinformatics enthusiast and software developer from Toronto. He has been involved in cryptocurrency since 2011. He is well known for his work on MC2, a hybrid PoS/PoW cryptocurrency and his contributions to various conformal projects such as btcd.
“NoodleDoodle” is a former Silicon Valley engineer. NoodleDoodle is a seasoned hardware and software developer. He started his involvement with cryptocurrencies in 2012 and currently spends his time working on “cool aerospace stuff” for some university.

Network Effects

Traffic

How many transactions? ~1.116 million transactions were made in the last year, over ~124k last month and ~32k the last week. These stats show us that the blockchain is being used quite a lot.

Does transaction volume increase? The monthly blockchain growth is increasing sharply by comparing the launching month (15.25MB) and today, growing over 2000MB per month.

Stable running? It doesn’t look like there are any news that the blockchain is experiencing some problems and therefore everything seems to be running pretty smooth.

Potential uptrend regarding network usage? Looking at the blockchain growth, the trend goes definitely up, with a peak in August (2017) with a monthly blockchain growth of nearly 4000MB.

Source code

What about source code? Monero is for most parts written in C++ and C. C++ is a general-purpose object-oriented programming (OOP) language, developed by Bjarne Stroustrup, and is an extension of the C language. It is, therefore, possible to code C++ in a “C style” or “object-oriented style.” In certain scenarios, it can be coded in either way and is thus an effective example of a hybrid language. C++ is considered to be an intermediate-level language, as it encapsulates both high- and low-level language features. Initially, the language was called “C with classes” as it had all the properties of the C language with an additional concept of “classes.” However, it was renamed C++ in 1983.

Community

How big? Monero has actually (12.2017):

More than 95,000 Followers on Twitter
~ 10,000 Likes on Facebook
~ 30,000 Subscribers on Reddit

How engaging? Users are quite active, especially on Reddit & Twitter.

Are the founders active? The creator is not known by his real name, he has vanished after setting up Monero. His identity is thankful_for_today.

Any AMAs (Ask Me Anything)? There are MAAMs (Monero Ask me Anything Monday) happening on a frequent basis. The last one on the 13th of November was not really huge due to it’s regularity, but most of the time there are about 30 comments per week.

PR Style? Their PR-Style is definitely not sales oriented but rather information oriented, which is great. Let’s take a look at their channels: On Reddit: Their best post gives information about Monero called “/r/Monero – Newcomers Please Read. Everything You Need To Know.” and has over 500 upvotes. Furthermore, everything else is about the latest news relating to Monero. On Facebook: They are posting mainly topics about new meetups.

Trading

Trading Volume: On Bitfinex the trading volume is around 45k XMR/USD (14.11.2017, 12:54). Monero is listed on more than 10 exchanges including the most popular ones, like for example Bitfinex, Bittrex or Poloniex.

Market uptrend: Such a forecast is always difficult. From a personal point of view, Monero seems to be a great Cryptocurrency, especially long term. The “Ring signatures technology” makes this currency unique and gives the user a great level of security and anonymity.

Whitepaper

Is it too generic? The Whitepaper explains in a very generic manner the advantages of Bitcoin and not explicitly what is great about Monero. However, it goes deeper into the CryptoNote technology and the “Ring signatures”, which is fundamental for Monero.

How is it structured? It has 20 Pages with a short introduction of half a page. It lists the advantages and the disadvantages of Bitcoin with solutions to it. The Whitepaper – CryptoNote v 2.0 – was written by Nicolas van Saberhagen member of the CryptoNote team and was published on October 17, 2013. The Monero Research Lab also released an annotated version of the CryptoNote whitepaper.

Does it explain the need for a token? It gives an explanation why the technologies behind XMR tokens are so important concerning anonymity and also how they work. -> CryptoNote Technology and how payments are untraceable through “ring signatures”.

Created for marketing reasons only? It doesn’t seem that the whitepaper was written for marketing reasons only because it is not really pretty. Except for text, there a few graphics and some math calculations. Its sole purpose is to give a general overview of the Monero blockchain project.

Security

Running alpha? Monero supports some great level of security due to the “Ring signatures technology”. Transactions are confidential and untraceable. Every Monero transaction, by default, obfuscates sending and receiving addresses as well as transacted amounts. These privacy features mean that every Monero user’s activity enhances the privacy of all other users, unlike selectively transparent cryptocurrencies (e.g. Z-Cash). The Kovri Project, currently in development, will route and encrypt transactions via I2P Invisible Internet Project nodes. This will obfuscate a transactor’s IP address and provide further protection against network monitoring. There is no public Monero testnet, but you can setup a private one.

External Audits? Monero hired academic cryptographers to review and improve security and started an external audit as well.

What other established devs say? Vitalik Buterin: ‘Just to flesh out the argument that is being made here, essentially the case is that privacy is partially a public good: the more people engage in privacy-preserving activities, the larger the “anonymity set” of each person participating in such a system is, and so the less information it reveals. If only five people in the world use privacy-preserving technologies, then the fact that you use such technologies itself makes you highly suspicious, whereas if everyone uses them then that doesn’t happen. Hence, there is an economic rationale for making privacy compulsory (note: there are of course also arguments that privacy is a public bad, but I won’t go into that whole debate here). Ethereum makes privacy voluntary, as you have to use mixers to get privacy, whereas Monero makes privacy compulsory, which is better.’

Roadmap

On schedule? Until now, it seems that they have reached their goals every year. In 2017, they scheduled 16 points to achieve and by now they have marked 10 tasks as completed, 5 as ongoing and one as upcoming.

Market Analysis

Competition: Monero can be seen as a competitor beside Bitcoin, although Monero offers great privacy features compared to Bitcoin.

Value proposition: Monero offers a product, which guarantees safety through transaction anonymity.

Revenue streams for future development? On Monero”s forum there are crowdfundings for different project developments.

Other

There is a new technology upcoming which is called Kovri. The Kovri I2P Router Project aims to integrate I2P technology into Monero to ensure that every transaction and communication meets the highest standards of anonymity possible. Kovri aims to implement I2P entirely in C++ and, in addition to providing extensive & easy-to-understand documentation, implementing user-friendly interfaces.

Author

This token valuation was provided by Oswin Ziegelbecker in December, 2017.

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References:

Token Valuation – Monero