Monero [XMR], one of the leading privacy coins in the space, was in the headlines earlier this month because of its hard fork. The coin has now made a comeback due to the same reason. Binance Research posted a research article titled, ‘Examining the Implications Behind Monero’s Latest Fork’ that focuses on the effects of the updates introduced on Monero during the recent hard fork.
The hard fork that occurred on 9 March, 2019 was a non-contentious fork, which did not result in the creation of a sidechain. Notably, this fork carried out four main upgrades, dynamic block size algorithm update, change in Proof-of-Work [PoW] algorithm, addition of dummy encrypted payment ID, and “shrinking the size of amount encodings and using deterministic masks,” to simplify amount commits.
Interestingly, this hard fork was supposed to take place in the next few months, but was advanced because of the dominance of ASIC miners on the Monero network. The fork successfully decreased its dominance by over 80 percent, according to data by 2miners.
The report by Binance Research stated that one of the upgrades, the addition of dummy encrypted payment ID, “made it harder” to discover the origins and destination of a transaction.
The report stated the implication to be,
“As several countries (e.g., France) and individual US states (e.g., Texas) are discussing whether or not privacy coins should be banned, this additional privacy feature may lead to higher pressure on countries to create legislature to directly address the status of privacy coins.”
It further stated,
“Regarding the improvement in the countermeasure to prevent a “big bang attack”, the initial issue was that the size of the block could increase exponentially.”
Additionally, the report stated that the long-term blocksize will be able to increase by “up to 1.4x after 50,000 blocks.” It added that the second addition was pertaining to the change in miner fees “as it is now calculated based on a long-term median block weight versus the previous 100-block median weight.”
The report said,
“As fees are now set based on the long-term median block weight, fees would not decrease when the amount of transactions keep increasing at a lower pace.”
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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.