MONERO [XMR] REPORT - Scaling New Heights in Blockchain Performance: 2025 Portfolio / Part Two

Part Two / Page 10

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• Features: Dash focused on payments and user experience (InstantSend feature, masternode governance, treasury funding development). It’s often not grouped with Monero and Zcash in analysis because its privacy is limited. Exchanges like Kraken explicitly state they don’t consider Dash a true anonymity-enhanced coin.
  
  
• Market/Adoption: Dash had significant adoption in some countries (e.g., Venezuela) as a payments coin, but that has waned. It’s more comparable to Litecoin than to Monero now. Dash’s market cap is around $300M. Privacy-concerned users overwhelmingly prefer Monero over Dash. The fact that Dash was not banned by some regulators while Monero was, underscores that Dash’s privacy is deemed insufficient to cause concern. For an investor, Dash’s value proposition is now more about its network/brand in certain regions and its treasury-funded dev (which Monero lacks), but it has lost ground overall.
  
  
• Monero doesn’t consider Dash a direct competitor in privacy, as Dash’s future roadmap doesn’t emphasize privacy improvements (they focus on things like platform for dApps now). So, from a privacy coin landscape perspective, Dash is a legacy player not leading in privacy tech.
  
  

Firo (FIRO, formerly Zcoin): Firo is a smaller project but notable for its innovative privacy protocol:

• It introduced Lelantus and now Lelantus Spark, privacy protocols that allow users to burn coins and later redeem them to new addresses with no link (breaking transaction history). It’s somewhat similar to Zcash in using a pool, but without trusted setup and using different cryptography. Lelantus Spark (upgraded in 2023) improves on that with triptych-like capabilities (improving efficiency and anonymity set).
  
  
• Firo’s anonymity set can be large when coins are burned into the pool. But Firo has a much smaller user base and network. Its market cap is under $50M. It also has a founder (Poramin Insom) and more centralized governance.
  
  
• Comparison: Firo often looked up to Monero; in fact, Firo integrated some of Monero’s tech (they considered switching to RandomX for mining, etc.). While academically interesting, Firo hasn’t seen broad adoption. It’s more of a testbed for privacy tech that could inspire Monero improvements (e.g., Lelantus influenced Monero research). From a competition standpoint, Firo doesn’t threaten Monero’s network effect but shows that there are alternative privacy methods out there.
  
  

Other Privacy Coins:

• Bitcoin Mixers & CoinJoins: Not coins, but relevant competition. Services like Wasabi or Samourai wallet’s Whirlpool allow Bitcoin users to CoinJoin for privacy. These have gained some popularity among privacy-conscious BTC users. However, using them is technical and they have downsides (mixed coins often flagged by exchanges). Monero offers a more seamless always-private experience. Still, one could argue that Bitcoin + CoinJoin is a competitor to Monero for some users. Indeed, some darknet markets that dropped Monero reverted to advising customers to use Bitcoin mixers (It's Back to BTC for Darknet Markets After Monero's Binance Delisting: Chainalysis ). But mixers can be shut down (Tornado Cash on Ethereum was sanctioned (Empire Newsletter: Privacy coins sacrificed so crypto could run - Blockworks)) or their operators arrested (e.g., Bestmixer). Monero, being an entire network, is harder to eliminate. So while Bitcoin mixers compete in providing privacy, they introduce trust or complexity that keeps Monero relevant.
  
  
• Grin and Beam: These launched in 2019 implementing Mimblewimble, a privacy protocol that compresses history. Grin had hype but its linear inflation and barebones approach led to price collapse; it’s now tiny ($5M cap). Beam is a more corporate Mimblewimble coin with opt-in privacy; also small ($30M cap). Mimblewimble itself had some drawbacks (susceptible to certain attack that can reveal some info if nodes log all inputs before cut-through). Grin/Beam haven’t dented Monero’s share; their communities are much smaller. Mimblewimble’s privacy also is not as robust in## Competitive Landscape: Privacy Coins and Broader Crypto
  
  

Monero operates in a niche but notable segment of the crypto industry: privacy-focused digital currencies. Its primary competitors are other privacy coins, as well as privacy-enhancing solutions on larger platforms. Here we compare Monero to key rivals and substitutes:

• Zcash (ZEC): Often seen as Monero’s top rival, Zcash uses zk-SNARK cryptography to enable shielded (private) transactions, but privacy is optional. Most Zcash activity remains transparent, with only 20% of transactions fully shielded. Monero, by contrast, is private-by-default for 100% of transactions – a crucial differentiation. While Zcash’s shielded transfers offer strong theoretical anonymity, their usage is limited; Monero’s entire network provides a baseline privacy for all users. Zcash also had a “Founders’ Reward” (a developer tax on block rewards) and is managed by Electric Coin Co. and a Foundation, reflecting more centralized governance. Monero’s community-driven approach has arguably yielded better adoption: Monero handles tens of thousands of daily transactions versus only a few thousand for Zcash. As one analysis notes, “Monero remains the superior choice for absolute privacy, while Zcash appeals to those valuing optional anonymity and regulatory friendliness”. Market sentiment reflects this: Monero’s market cap ($5B) is roughly 8x that of Zcash (~$600M). In short, Zcash has not materially threatened Monero’s dominance – optional privacy and heavier compliance orientation have limited ZEC’s network effect.
  
  
• Dash (DASH): Originally “Darkcoin,” Dash pivoted away from its privacy branding. It offers an optional CoinJoin mixing (PrivateSend) facilitated by masternodes, but this provides much weaker privacy than Monero. Amounts and addresses remain linkable; only the source is somewhat obscured. Dash’s leadership even asserts it’s “not an anonymity coin” to avoid regulatory heat. Consequently, Dash is rarely considered a true competitor for privacy-conscious users. Its privacy usage is minimal, and regulators often exclude it from privacy-ban lists (confirming its negligible anonymity). Dash focuses on payments and governance (masternode voting), competing more with coins like Litecoin. Monero far surpasses Dash in privacy and active usage for confidential transactions.
  
  
• Firo (FIRO, formerly Zcoin): A smaller project that innovated with Lelantus and Lelantus Spark privacy protocols (burn-and-redeem models to break links). While technically interesting – in some ways offering bigger anonymity sets per transaction – Firo has a tiny user base and market cap (<$50M). It does not approach Monero’s liquidity or real-world adoption. Firo’s advancements contribute to academic discussion (Monero’s research lab monitors such developments) but Firo doesn’t pose a practical competitive threat. Its value proposition is similar to Zcash’s (opt-in anonymity via a pool) but without Zcash’s funding or recognition.
  
  
• Other Privacy Endeavors:
  
  
  
  • MimbleWimble implementations (Grin, Beam): Launched in 2019 with hype, these privacy coins failed to gain traction. Grin’s unlimited inflation and barebones approach saw its market cap plummet (now $5M). Beam has opt-in privacy and a corporate team but remains niche ($30M cap). MimbleWimble’s privacy is achieved through transaction cut-through and blinding factors, but it has known limitations (e.g., certain attacks can detect transaction links if full node data is retained). Neither Grin nor Beam achieved Monero’s network effect or trust.
    
    
  • Litecoin (LTC) and others: Interestingly, Litecoin activated MimbleWimble Extension Blocks (MWEB) in 2022, allowing users to send LTC confidentially. Adoption of LTC’s privacy feature has been tepid (a tiny fraction of LTC transactions use MWEB). Major exchanges even disabled LTC deposits/withdrawals with MWEB for compliance. This shows that bolting on privacy in an established coin faces hurdles. Monero’s always-on privacy offers a more seamless, reliable experience. Bitcoin Cash has CashFusion (a mixing protocol) and other coins like PIVX, Verge attempted privacy angles, but none achieved Monero’s robustness or usage.
    
    

Overall, Monero stands clearly as the privacy coin leader. It pioneered or adopted the best available techniques (and is poised to integrate next-gen protocols like Seraphis), resulting in a loyal user base. Other privacy coins have either compromised on default privacy (Zcash, Dash) or remain too small to matter (Firo, Grin). Notably, privacy coin sector dominance has consolidated: Monero is the only privacy coin in the top 100 market cap as of 2025 (Empire Newsletter: Privacy coins sacrificed so crypto could run - Blockworks). Privacy coins as a group shrank from ~5% of crypto market in 2017 to <0.5% now (Empire Newsletter: Privacy coins sacrificed so crypto could run - Blockworks) – and Monero comprises the bulk of that remainder.

Broader Crypto Comparison

Monero also indirectly “competes” with larger cryptocurrencies and technologies that address overlapping use-cases:

• Bitcoin (BTC): Often called digital gold, Bitcoin prioritizes security and decentralization but not privacy. All Bitcoin transactions are public, and companies like Chainalysis extensively track BTC flows. For users requiring financial privacy, Monero offers a clear advantage. Some use Bitcoin with mixers (e.g., CoinJoin via Wasabi or Samourai Whirlpool) to approximate privacy, but this is an added process with friction and legal risk. For instance, CoinJoin transactions are sometimes flagged or refused by exchanges due to their identifiable structure. Monero provides native privacy without extra steps. That said, Bitcoin is far more liquid and widely accepted. Monero is complementary to Bitcoin: many users hold both – BTC as a store of value or for mainstream use, and XMR for privacy needs. In darknet markets, Bitcoin still plays a role (especially post-delistings) due to its liquidity, but privacy-sensitive users often convert BTC to XMR as soon as possible. Notably, Monero can be seen as “Bitcoin-like” in monetary philosophy (capped-ish supply, PoW) but with fungibility. A Wall Street Journal piece quipped that Monero is what Bitcoin would be if Satoshi had prioritized privacy from the start. There is speculative “hedge” behavior where if Bitcoin faces potential coin-tracking or censorship (like blacklisting of tainted coins), Monero could see increased demand as a hedge against Bitcoin’s transparency. Conversely, if Bitcoin were ever to adopt significant privacy improvements (which is unlikely short-term given regulatory climate and technical challenges), that could encroach on Monero’s niche.
  
  
• Ethereum (ETH) and Smart Contract Platforms: Ethereum and its ilk (BSC, Solana, etc.) are general-purpose platforms, not focused on privacy of simple payments. By default, Ethereum is transparent. Users seeking privacy on Ethereum turned to Tornado Cash, a smart-contract mixer for ETH and ERC-20s. Tornado did enable strong privacy for those who used it, but it was an opt-in tool – and in 2022, Tornado Cash was sanctioned by the U.S. Treasury, with its developer even arrested, illustrating how targeted privacy tools can come under fire. There are Ethereum improvement proposals for stealth addresses (to hide receiver addresses) and various layer-2 projects exploring privacy (e.g., Aztec Network, or zkSync with private transactions). However, none have mass adoption yet, and regulatory pressure will persist (any widely-used mixer contract could face Tornado’s fate). No smart contract platform currently offers privacy as robust and baked-in as Monero’s. Monero thus doesn’t directly compete with ETH – it serves a different purpose (payments vs. programmable finance). In fact, Monero is used alongside Ethereum by some: e.g., an ICO investor might use ETH for participation but Monero to privately cash out proceeds. If Ethereum successfully implements easy-to-use privacy features without drawing regulatory ire (a tough balance), it could marginally reduce demand for Monero in certain contexts. But Ethereum’s identity ecosystem (ens domains, etc.) is trending toward more identity, not less, which likely leaves space for Monero.
  
  
• Stablecoins (USDT, USDC, etc.): Surprisingly, stablecoins have become competitors in illicit usage. Chainalysis notes a “rise in stablecoins as an illicit payment mechanism” in 2024 – criminals sometimes prefer stable value that’s widely accepted. However, stablecoins are centralized and surveilled (issuers like Tether routinely freeze addresses linked to crime). They offer no privacy (blockchains like Ethereum record all stablecoin transfers openly). So for anonymity, stablecoins are not suitable – rather, they’re used when privacy is less a concern than avoiding volatility. Monero, conversely, is volatile but private. One could see a workflow where illicit actors convert stablecoins to Monero to “clean” them, then maybe back – but issuers and regulators watch for those patterns. For law-abiding users, stablecoins and Monero serve different goals: one preserves USD value, the other preserves privacy. They are more complementary than true competitors, and indeed, a common pair is XMR/USDT on exchanges, bridging privacy and stability needs.
  
  
• Other Payment Coins: Cryptocurrencies like Litecoin, Bitcoin Cash, and XRP position themselves as fast, low-fee payment assets. They generally lack privacy features (Litecoin’s MWEB aside). If a merchant or user values speed and fees over privacy, they might choose Litecoin or others. But increasingly, Bitcoin’s Lightning Network provides fast, low-fee payments with broader support, potentially marginalizing those altcoins. Monero’s competitive edge is not speed (its throughput 5-10 tx/s and 2-min blocks are modest) but privacy. That appeals to a distinct user segment. In practice, Monero’s transaction fees are also low ($0.02 average) and confirmations reasonably quick (~2 minutes), so it can handle small payments fine – just not thousands per second. In realms where privacy isn’t needed, Monero won’t be first choice; where it is, those others are not acceptable substitutes. For example, in jurisdictions with strict capital controls, some users might prefer Monero’s privacy to simply using a faster coin.
  
  
• Centrally Managed Privacy Tools: This includes mixers, privacy-centric wallets, or custodial tumblers. These aren’t cryptocurrencies but provide services. They come with trust and legal risks (e.g., centralized mixing services have been seized by law enforcement). The OFAC sanctioning of Blender.io and Tornado Cash highlights how centralized or even decentralized-but-hosted privacy services can be targeted. Monero, as a decentralized network, is more resilient. This resilience is a competitive advantage. Someone needing to launder large sums might attempt to use a mixer on Bitcoin due to liquidity, but they run a higher risk of detection or asset freeze. Monero offers a self-custodial, permissionless way to achieve similar ends – which, for better or worse, is attractive to those users. On the legitimate side, privacy-conscious individuals may not trust a third-party mixer’s operational security or honesty; Monero’s trustless design is superior for them too.
  
  

In summary, Monero’s competitive moat lies in being a fully decentralized, default-private cryptocurrency – something none of the major platforms or other coins truly replicate. Zcash, the closest peer, has not matched Monero’s community or adoption; other privacy attempts have either faltered or remain optional. Broader crypto trends like DeFi, NFTs, or yield farming largely bypass Monero (it’s not designed for those), which means Monero doesn’t compete on those fronts – but it also means Monero didn’t benefit from those hype cycles. Instead, Monero has carved out a strong, if niche, position as the de facto cryptocurrency for privacy.

The broader competitive consideration is whether “privacy coin” remains a viable category in the face of regulatory suppression and whether any mainstream crypto will implement Monero-level privacy. Given current trajectories:

• It is unlikely that Bitcoin or Ethereum will integrate default anonymity at base layer; the political and technical trade-offs are too high. They may rely on second-layer solutions for those who need it.
  
  
• Privacy coins themselves have dwindled to essentially Monero (and to a much lesser extent Zcash). If Monero were somehow eliminated, there’s no clear successor in place – which suggests Monero’s entrenched position barring a black swan.
  
  

New technologies (like advanced zero-knowledge proofs) could enable a future competitor, but Monero’s team is vigilant and could adopt similar tech (Seraphis and Arcturus proposals, for example, show Monero is ready to evolve with new cryptographic methods).

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