Bitsonline has an exclusive interview with PZ, the head of Monero Classic (XMC), a fork of Monero (XMR) that retains the proof-of-work algorithm that the privacy coin had before its April hard fork. They discuss their new project, their involvement with helping to get SegWit adopted on Litecoin and Bitcoin, and the state of cryptocurrencies in China.
Monero Classic, an ASIC-Friendly Fork of Monero
On February 11th, 2018 the Monero Core Team announced on their blog that they would change the coin’s proof-of-work algorithm, named Cryptonite, to one that is more ASIC-resistant. The Core Team also announced that they would continue tweaking Monero’s PoW algorithm at each hard fork, which occurs every six months. This came during a period when many new Cryptonite ASICs were coming onto the market, such as the Baikal Giant N.
In giving the reasons for the change, the Monero Core Team stated their belief that ASICs would induce centralization of mining on Monero and disadvantage miners unable to buy ASICs. While CryptoNite is already an ASIC-resistant algorithm, the Core Team felt that it needed to be even more ASIC-resistant in order to protect the security and independence of the Monero project.
When the change to the algorithm was done via an “emergency” hard fork on April 6th 2018, the hash rate dropped dramatically from 1 GH/s to as low as 157 MH/s before recovering. This revealed what most people knew: many miners had already been using ASICs on Monero.
There ended up being four different forks of Monero after April 6th, most of them ASIC friendly. While their reasoning differed, most argued that higher hash rate generating ASICs make a given blockchain more secure. It shouldn’t be overlooked, however, that economic interests also likely play a role, as those who owned or manufactured Cryptonite ASICs found them defunct after XMR changed their PoW.
Here is our exclusive interview with PZ of Monero Classic, an anonymous figure who has been involved with the cryptocurrency community in China for many years. It was edited slightly for clarity.
Interview With PZ of Monero Classic
Ian Edwards: Hello PZ, thanks for agreeing to speak with Bitsonline. Before we get to Monero Classic (XMC), I like to ask you a bit about your involvement in the cryptocurrency community more generally the last few years. You helped organize both the Litecoin and Bitcoin International Round Table Forums, which resulted eventually in SegWit adoption for those coins. How did you first start getting involved with Litecoin and Bitcoin?
PZ: I got to know Bitcoin in 2010 or 2011. Since then, I have been involved in the Bitcoin community. As China’s, and even the world’s, first group of people paying close attention to the development of Bitcoin, I have established good relationships with many early participants in Bitcoin community.
In China, I convey the basic knowledge of Bitcoin and blockchain to Chinese people, helping ordinary people to understand the importance of Bitcoin and blockchain to human society. In China, many people have learned about Bitcoin, Litecoin and other blockchain systems through my introduction.
IE: What was the experience of running the roundtables like? Did you learn anything from those experiences that you are applying to your current projects?
PZ: Organizing Litecoin/Bitcoin Roundtable Forum was very difficult work. As we all know, since 2013 or even earlier, the Bitcoin community had been discussing expanding the Bitcoin network. Bitcoin community has proposed many different solutions. For example, block size expanded to 2MB, Lightning Network, Raden Network and some other technical solutions. There was a time when Bitcoin community (including Core development, mining pools, and exchanges) reached a Bitcoin network expansion agreement in Hong Kong.
But unfortunately, in the end, the agreement was not respected or implemented. The failure of this expansion plan resulted in a deadlock for the expansion of the Bitcoin network. In 2017, I believed that if the Bitcoin network upgrade is still not pushed forward, it will be marginalized and even abandoned by the community because it cannot meet the needs of the entire community. At the same time, the Litecoin team also used SegWit to upgrade the network, but due to misunderstandings between miners and the development team, the Litecoin network agreement also came to a deadlock. Above are the background when I organized the Litecoin/Bitcoin Roundtable Forums.
In order to promote the smooth upgrade of Litecoin Network and Bitcoin Network, I got in touch with miners and exchanges which were located throughout the country and even the world, and tried to make these important ecological participants pay more attention to and cooperate with the Litecoin/Bitcoin network upgrade.
After many discussions and negotiations with representatives of mining machine manufacturers, mining pools, exchange, and miners, we finally got their understanding and support for the upgrade of the blockchain network. Everyone finally agreed to upgrade Segwit on Litecoin.
The first Litecoin Roundtable Forum meeting was held in Wuhan, China. The last meeting was held on the Internet through WeChat. The discussion at each meeting was very intense. The final meeting lasted for seven hours. The final agreement was reached and I issued the announcement that the Litecoin International Roundtable Forum had agreed to upgrade the network.
IE: Are you still involved with Litecoin? You told news.8btc.com in an interview that you had set up a foundation in the Cayman Islands to facilitate Litecoin development. What is the status of that project?
PZ: Because of China’s legal policy, I cannot talk about Cayman Foundation’s situation, I hope you understand.
IE: OK, so let’s move onto XMC. Had you been involved with the Monero project before the fork?
PZ: No, we didn’t contact any of the Monero team before this hard fork. We didn’t pay much attention to the Monero project before. The reason why we decided to maintain the original Monero algorithm is because after the Monero team decided to change the algorithm, many Monero users who wanted to mine with mining machines came to us, hoping that we could take over the original Monero chain. We believe that it is also common view in Monero community. Different voices should be heard and respected.
IE: There’s been some confusion around Monero Classic due to reports that there are two teams working on XMC. It appears that the other Monero Classic team has been inactive lately. Were you were cooperating with that team in any fashion? Have you communicated with that team, or do you know anything about their status?
PZ: We didn’t work with this team (the other Monero Classic), but we kept an eye on their status. In fact, after they made the announcement, there was no further action (from them), and their related website and groups were left unattended. By now, this team has disappeared and should not have any impact on the community now.
IE: Recently, XMC announced it was listed on BitAsiaEx. Do you have any further plans for new exchange listings coming up?
PZ: We have plan for coin listings on other exchanges, and we are also communicating with exchanges about some related things. At the same time, we are also recruiting more development and marketing personnel to improve XMC network features, so that more people can understand that XMC is a blockchain network system based on community consensus.
IE: How has user and miner adoption gone with XMC? How many mining nodes does XMC have? Are you satisfied with the amount of users and miners?
PZ: Seeing from the development of our community, XMC has been recognized by miners and users. Number of users participating in XMC network are growing rapidly. We do not have statistics of the number of mining nodes for XMC. This can be known after contacting mining pools.
IE: The last few months have seen a string of 51 percent attacks against PoW coins, including Electroneum, which also uses Cryptonite. What do you think about that attack, do you think it puts XMC at risk?
PZ: Since XMC network is maintained by professional mining machines (ASICs), it is difficult to be attacked by botnets or be 51 percent attacked by other low-computing-power machines. This is also the advantage brought by professional mining machines, it greatly improves the level of network security.
The new Monero chain (XMR) which is still using GPU mining after changing algorithm, is under risk.
IE: Could the fact that XMC is inheriting the blockchain of XMR cause any privacy risks to users of either XMR or XMC?
PZ: There is no privacy risk. XMC is the original Monero chain before this hard fork. It is still one of the best blockchain systems in the world.
IE: Have their been any problems around replay attacks with XMC that you know of?
PZ: Until now, there is no replay attack incident happened to XMC.
IE: The manufacture of ASICs is currently very centralized and dominated by Bitmain. What do you say to critics who argue that allowing ASICs gives too much power to a few manufacturers and could reduce the decentralization, and thus also the privacy, of coins like XMC?
PZ: ASICs are currently a free competitive market. Mining machine manufacturers of the XMC algorithm, as far as I know, there are at least four companies. It does not harm decentralization of XMC. As for the harm to privacy you mentioned, I’m not quite sure what you’re referring to.
IE: What is your final goal with XMC? Are you working on any deals with partners to use XMC, like those in the financial industry or another industry?
PZ: I hope XMC can become a widely accepted, electronic cash system. It can ensure that everyone’s asset privacy is not violated. We are also actively communicating with all walks of life. We hope that more people and organizations will adopt XMC — the safe and stable blockchain system with privacy protection.
The ultimate goal of XMC is to establish a decentralized, user privacy protected, free and equal payment network. This is also the goal of the XMR. However, we know that XMR had performed a hard fork to upgrade. Therefore, we hope to offer another option for the Monero project besides being only anti-ASIC. XMC and XMR both are products of Monero. The success of any of them is the success of the Monero.
IE: There are strict rules around cryptocurrencies in China. How widespread is the use cryptocurrency there? And how do you think the government there views privacy coins such as XMC, which can be used by criminals to hide their transactions?
PZ: In China, cryptocurrency is not widely used. The criminal’s favorite trading equivalent is still cash. Because cash is still the simplest, most reliable and direct financial equivalent. There is still a high threshold for understanding and using cryptocurrency (in China). So criminals may not like to use cryptocurrencies now.
IE: Is there anything you’d like to say that we didn’t already discuss?
PZ: We believe that supervision is very necessary for the cryptocurrency market. The emergence of some disruptive technologies may lead to social changes. This is a gradual process, such as the emergence of Internet technology in the 1990s. And new technologies may also be used in illegal areas. Therefore, we need appropriate regulatory measures to prevent new technologies from being used in criminal areas. Currently, China bans ICOs and centralized cryptocurrency exchanges, but it does not prohibit Chinese citizens from personally holding and trading virtual currencies. Therefore, it is still legal for individuals to hold and trade cryptocurrencies in China.
We believe that anonymity is an important technical means for ensuring the dignity of individual human beings.
IE: Great, thank you, PZ. I appreciate your time.
You can learn more about Monero Classic at its website, monero-classic.org. PZ is on Twitter at @pzpz_jack.
What’s your take? Can Monero Classic succeed as a secure and widely-used cryptocurrency? Let us now in the comments.
Images via Monero.org, Pixabay, BitcoinMining.com, Bitsonline
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