H2. Monero's trade volumes are artificialFact one — large daily emissionMonero is emitted at the rate of roughly 22,000 XMR/day at the moment. At the time of writing this is roughly 78 BTC or $40,000.
Take a look at the XMR emission chart (depicted as "Bitmonero"). The emission rate is much higher than Bitcoin's or pretty much any other PoW altcoin.
Fact two — botnetsMonero is
largely botnet mined and that has been confirmed on a number of occasions (even by the XMR devs themselves):
1. A 4 MHash/sec botnet confirmed (you may wish to read several pages starting with the post below, as there are some speculations on botnet mining economy):
2. Two other botnet operators have been confirmed. How many botnets do those operators have? What is their hash rate? Nobody knows.
3. What's more, there is an infamous XMR silent miner issue (used as a botnet software that runs on the vulnerable PCs):
XMR silent miner is being actively sold for $104.
Monero Stealth miner affecting PCs already in June 2014 (
mirror)
5. Here's a link to the virus base with this trojan (link from the thread above):
https://www.virustotal.com/en/file/e2e6b6938879142c4e35542b5fe8d3eeec7bf9e682f915213fda009097c3878e/analysis/1401909211/6.
Another report on the issue on Reddit. Check this
comment.
Fact three — whale supportrpietila is currently a Monero whale. Being a bitcoin millionaire he's capable of buying out large stakes of XMR that are dumped on the market. I'm not going to mirror those links, as everyone knows that rpietila is a whale and supports XMR. E.g.:
https://bitcointalksearch.org/topic/xmr-rpietila-monero-economics-thread-702140Fact four — natural trend is decliningDuring the last 4 months that have passed since Monero launch, the price has never broken the peak. It
simply fails to grow in spite of all the PR hype and fake forum activity. Of course, there are periods of growth, but have a look at the historic chart:
Below the chart you may see the trade volumes. When XMR is being traded as usual at 100 BTC volume (standard XMR market behavior), the price gradually declines. The explanation for that is fairly simple (go back to facts #1 and #2). The botnet owners are slowly dumping their coins and drive XMR market down.
Secondly, notice that upward trend coincides with the significant spikes in volume (up to 300 BTC and more). Recheck it with #1 and #3. As the natural demand can in no way match the botnet supply, someone has to step in from time to time to help get it going further. This is most likely the whale buying large XMR sizes out. Alternatively, the XMR trade volume spikes may also be someone on the core team trying to sustain the price.
ImplicationsThat being said, XMR is likely to be mined mostly by the botnets at the rate that is not justified by the demand. Botnet owners dump the coin as it is not showing any stable growth. That's it folks, the 78 BTC of daily trades come simply from the daily emission rate being pushed to the market. No surprise, why the price is generally going down.
Why is that so? CryptoNote has created new ways for the botnet owners to profit. Monero was largely botnet mined from the inception, so
the main stakeholders are basically botnet operators. How do you make sure your profits are secure? You need someone buying out those daily volumes. There are two simple ways to ensure that:
1. Artificial PR/hype through purchased hero accounts.
2. Secure yourself a whale.
This has serious implications and may actually link us back to H1 on fake marketing/PR hype.
Botnet owners are securing their profits by purchasing accounts and hiring shills. However, everything they do is for just one particular purpose:
profit from their botnet mined coin. They make you feel that XMR is largely supported so that you give your money to them.
It's hard to say whether XMR core team is involved. Of course, they would deny any potential connection. However, I wonder why they're not very interested with botnets and fake accounts and pretend that nothing weird is going on.
Another point is that I'm not sure why such a prominent investor and cryptocurrency activist as rpietila supports the coin with such serious issues. I assume that he was somehow tricked into believing that XMR has the future. It might also be the case that core developers are not seeing the whole picture themselces and honestly believe that Monero is actually supported by a large number of people who are willing to buy more and more Monero. However, the reality is that all these people are dead wrong.
Monero is being dominated by botnet owners; everything they do with the black PR techniques is to fuel its scam growth. My last thought might be a bit brave, but could rpietila's money be the actual target of this scam scheme?
Don't worry, XMR will be deep mined in half a year. When the emission declines to 20 BTC per day, the botnet interest will disappear naturally. After they choose another victim, the Monero's black PR hype will disappear and the coin will fall down.
If you're not convinced, you may continue giving your USD to botnet owners in exchange of worthless XMR.
Hypothesis 2 is accepted. Monero's trades are artificial.
