Internet celebrity project Grin, half heaven and half hell

With the help of various bigwigs, mining pool miners, and large and small exchanges, Grin, which had been silent for more than two years, became a new Internet celebrity in the cryptocurrency circle in 2019. Before its main network was officially launched, the online search index and news exposure rate soared; and after the first block was mined in the early morning of January 16th, Beijing time, the price of Grin on some exchanges was once driven up to more than US$200.

Screenshot from: Coinmarketcap

Screenshot from: grin.blockscan.com

However, after the carnival, things will eventually calm down. After a round of skyrocketing and speculation, the price of Grin has gradually fallen back to around $5, and the growth momentum of the network's computing power has also gradually slowed down. Although the heat has subsided, the seemingly strange practices of not issuing ICOs, not pre-mining, and not marketing, as well as the mysterious behavior of most core development members being anonymous, have always made it difficult for people to look away from their curiosity and exploration. Some even believe that Grin, which emphasizes decentralization in governance, has rekindled the ambitions of crypto geeks and can be regarded as Bitcoin 2.0.

Regardless of whether there is excessive hype or inflated evaluation, in the blockchain industry where faith has been shattered and the market has been depressed for a year, Grin, which is both topical and innovative, has indeed aroused a lot of enthusiasm in the industry. Whether this wave of enthusiasm can continue depends on how strong Grin's core is.

There is a reason why Grin, which carries a mysterious curse, is so popular

Advanced concepts, geek spirit, Bitcoin fundamentalism, etc. are all evaluations of Grin by the media and some big Vs in the currency circle; but in essence, Grin is just one of many payment and settlement cryptocurrencies.

Screenshot from: https://grin-tech.org/

According to the description on the official website, Grin is a modern electronic currency designed for the next few decades, without third-party restrictions and available to all people. The main features of the project are as follows:

• Team maintenance: 100% community-driven, only accepts donations, no ICO, no pre-mining and founder rewards;

• Monetary policy: There is no upper limit on the total issuance, the issuance speed will not change (60 coins/min), and inflation will gradually approach zero;

• Issuance method: Two PoW algorithms are used, namely the ASIC-friendly primary algorithm Cuckatoo31+ and the ASIC-resistant secondary algorithm Cuckaroo29;

• Focus on privacy protection: There are no accounts and addresses, and transactions can be simply aggregated. In order to hide the source of new transactions, each new transaction will be privately propagated among peer nodes before being announced;

• Higher scalability: Cryptography technology is used to greatly compress past transaction data, thereby ensuring that Grin will not crash in the future due to carrying too much data.

Similar to Bitcoin, Grin is only produced in the form of mining, maintained by the community, and can be used as a peer-to-peer payment tool; but different from Bitcoin, Grin pays more attention to the privacy of transactions and tries to solve the scalability problem that is common in blockchain systems in a new way. This new solution is the MimbleWimble protocol, which has the same name as the tongue-tying curse in Harry Potter.

This blockchain format and protocol was also proposed by an anonymous person, and initially appeared in the development forum as a Bitcoin expansion plan; its main innovation is to modify Bitcoin's UTXO model and use an elliptic curve-based encryption algorithm to create multiple signatures for all inputs and outputs, thereby achieving confidential transactions without revealing addresses and transaction amounts. In simple terms, the two parties to the transaction only need to share a blinding factor composed of the private key and public key of the transaction party to verify the validity of the transaction through the relevant equation. And because of the different verification mechanisms, the block does not need to store the complete transaction history, and only retains key information to maintain normal operation; this greatly reduces the node storage burden while also improving the scalability of the network.

In 2019, when the industry is eagerly looking forward to new progress in capacity expansion, it is not unreasonable that Grin, which can theoretically achieve high compression and opacity, has suddenly attracted much attention. Coupled with the bear market, Ethereum production cuts, and the general anxiety in the GPU mining circle, it is normal for mining pools and miners to place their hopes on Grin, which is ASIC-resistant in the early stage and has a low entry threshold for mining.

But does the current blockchain field really need such a project?

From the current perspective, not necessarily.

You should know that the background faced by projects in each period is different, and the currency that best meets the current needs will become a dark horse of the generation. Ten years ago, when the global economy was in recession, Bitcoin pioneered the use of encrypted digital currency; then the emergence of Ethereum broke the limitation that blockchain can only be applied to digital currency; as for the popularity of EOS, it reflects the market's urgent need to solve the problem of decentralization and efficiency. On the other hand, Grin is trying to solve the bottleneck of the current blockchain industry; but now the market demand is more inclined to killer applications that can be implemented in a certain market, rather than more efficient and privacy-focused encrypted payment tools.

But it is undeniable that Grin is a potential stock in the field of anonymous digital currency, and it has certain innovations in technology. It integrates MimbleWimble protocol, Bulletproofs technology, Schnorr-based MugSig signature scheme and other technologies, allowing Grin to ensure strong anonymity while also solving the problem of insufficient performance of "full anonymous transactions" such as Zcash. Therefore, if the market demand for highly anonymous digital currencies increases in the future, Grin is likely to become one of the main forces in the anonymous currency market.

Even if there is a future, there may not be money.

However, before that, Grin still has many internal and external problems to be solved. Less than a month after the launch of the mainnet, Grin has been launched on multiple exchanges; however, due to internal and external factors such as limited market transactions, insufficient circulation, the need for both parties to be online at the same time during the transaction process, and the lack of supporting infrastructure, the current price of Grin has not yet been truly formed, and there are significant price differences between exchanges. Under these major premises and the background that the top players have already seized the market, the time required for Grin, which only relies on mining to produce coins, to popularize and circulate on a large scale will also be greatly slowed down; it may still have a long way to go before it can become a universal payment currency, or even catch up with its predecessors such as Monero, Zcash, and Dash.

Grin's trading status on some exchanges (Image from: Coinmarketcap)

Even so, it does not prevent some people from speculating on Grin. At a time when the actual application value of the project has not yet been truly realized, the main force supporting the market's demand for tens of millions of dollars in daily trading volume is obviously speculators who do not want to miss out on early dividends. But is Grin really suitable for large-scale investment? I don't think so.

Let’s not talk about Grin’s current internal and external problems. Even if it really develops in the future, Grin may not be a good choice for long-term investors who hope to get multiple returns. From the perspective of its currency model with continuous inflation, Grin’s developers are more inclined to develop it into a digital currency suitable for value exchange, rather than a digital gold that is developing in the direction of value storage like Bitcoin. In fact, to put it bluntly, they just don’t want you to hoard it; and the premise for everyone to be generally willing to use it is that the price of Grin can remain stable to a certain extent. Of course, any currency in the currency circle has the possibility of doubling, but at least not now; after all, the bear market is long, and it will not be possible to usher in a real warm spring in a short time.

Unlike investors, miners who were hurt by the price plunge and shutdown price last year have fewer factors to consider. As the most practical and profit-seeking group in the blockchain world, miners, especially GPU miners, may follow the market price or new currencies at any time. As mentioned above, with the reduction of Ethereum production and the decline of miners' unit income, Grin, which is ASIC-resistant and GPU-friendly, will undoubtedly become one of the choices for miners to switch computing power in the short term.

Data date: February 14, 2019

According to the account manager of Spark Mining Pool at the beginning of this month, as a currency that supports GPU mining, Grin's current mining income is higher than Ethereum, and Beam, which also implements the MimbleWimble protocol, is close to the income level of Ethereum. With the gradual slowdown in the growth trend of Grin's computing power and the reduction in price fluctuations, mining Grin can indeed bring certain income to GPU miners in the short term. However, this wave of enthusiasm can only bring a little comfort to the old miners who are trapped in the cold winter; in the future, with the improvement of the computing power of the entire network and the release of ASIC mining machines (Innosilicon said that it will release the first ASIC mining machine for GRIN in late summer 2019), the market share left for small miners will become smaller and smaller, and the mining market will still be the home of large miners.

New miners who take advantage of the situation are likely to put themselves in a dilemma; unless the price of Grin can reach more than $20 within twelve months, they may have to struggle to make their investment back in the next year (data source: TokenGazer).

After the heat, will Grin be left with peace or tranquility?

Grin, which has been developing steadily for more than two years, was pushed to the forefront in early 2019 due to the spontaneous promotion of people in the cryptocurrency circle. Although the public attention has won them a large number of early network maintainers and users, these enthusiastic and positive reviews are more or less mixed with exaggeration and false elements. Grin, which wants to concentrate on innovation, can never escape the fate of being hyped.

Compared with the core technology and future development, most people are only concerned about Grin's price trend and room for growth. What's more embarrassing is that the popularity of the project has not won more salary opportunities for developers. Earlier, Grin's founder Ignotus Peverell expressed his disappointment with the early development of the ecosystem on the forum. Looking ahead, Grin has difficulty raising salaries when it is in the spotlight; when the heat fades and market attention decreases in the future, how long can their passion and idealism support them? Even if they can persist, if they are dragged down by the interests of speculators, Grin's goal of becoming a universal payment currency will be difficult to achieve.

As Yongtan said, when it is completely black, it still has bones, and when it is completely red, it turns into gray. Grin carries the hopes of many crypto geeks, so don’t let it be killed by premature enthusiasm.