Grin is the closest thing to Bitcoin 2.0 in the crypto-currency universe. It may be the next great store-of-value & safehaven monetary coin during global economic turmoil, resets and increased government capital controls. The key advantage of Grin is that it improves the privacy and scalability of Bitcoin technology while keeping the rest of the features that make Bitcoin ‘digital gold’. Grin uses a similar Proof-of-Work (POW) consensus mechanism to Bitcoin, but initially uses a more-ASIC resistant algorithm that enables more people an opportunity to mine. POW is a very important feature for monetary coins because people will eventually be able to associate the number of coins with a unit of energy and a recognizable unit-of-account. Hence Grin like Bitcoin satisfies all of the three key properties of money as a store-of-value, medium of exchange and unit-of-account.. Grin uses cutting-edge blockchain technology called Mimble Wimble yet the implementation is one of the simplest compared to other networks that use the same technology.
Bitcoin will likely remain the top store-of-value coin for decades to come. It is the most fundamentally sound and elegantly designed of all crypto-currencies and could become the de facto reserve currency of the world. There is very little to improve on Bitcoin. It does one thing and thing well which is transferring & storing value. It is money. Many features that people want to add to Bitcoin such as governance makes Bitcoin worse, not better. The less human governance, the better. The immutability of Bitcoin and the inability of people to significantly change it is a feature, not a bug. There is no need for a Federal Reserve Board to conduct monetary policy with Bitcoin. People trust in software and math. Hence the following are the very few areas that could improve Bitcoin:
- 1privacy to provide better fungibility.
- 2fairer coin distribution.
- 3more predictable economic security model.
- 4better scalability.
Grin improves these four areas while keeping the rest the same as Bitcoin.
In Aug. 2016, someone with the pseudonym Tom Elvis Jedusor, named after a character from the Harry Potter series, released a whitepaper titled MimbleWimble in a bitcoin research channel. In Oct 2016, Andrew Poelstra, a Bitcoin developer from Blockstream, wrote a formal whitepaper with improvements. Later a pseudonymous developer Igor Peverell started to build Grin in early 2017 until it was launched on Jan. 15th, 2019.
Daniel Lehnberg has done project management and core contributors include: Yeastplume, Antioch Pverell and John Tromp. Igor Peverell was the core developer until June 2019. You can follow progress here.
Grin technology involves elliptic curve cryptography (like Bitcoin), homomorphic Pederson commitments and an innovative process of using addition in elliptic curve cryptography to not only keep transactions opaque and verifiable, but also entire blocks of transactions. Hence Grin improves privacy & scalability at the same time. Grin is built using the Rust language and uses the Cuckoo Cycle for its mining algorithm. Grin developers have kept the design and architecture simple and did not add any scripting features. A researcher has criticized Grin privacy because he was able to maintain a transaction graph of the network with very limited means, but Grin developers have been aware of this limitation and having a transaction graph without knowing what addresses these transactions are linked to is not useful in breaking privacy .
Although ‘fair’ is a loaded term for crypto and there are many perspectives on what is ‘fair’ there seems to be a general consensus about what constitutes ‘fair’ in POW crypto-currencies. Grin was launched without a pre-mine/post-mine/ninja-mine/dev tax or preferential advantage to any one person or group. Its launch was publicized and scheduled well in advance. All users & miners had equal opportunity to obtain coins. Hence Grin can be considered to be one of the most ‘fair’ coins that exist today. Grin was fully funded by donations and developers were building for nearly 2 years before its official launch. Everyone had ample opportunity to participate in mining from the very beginning and continue to do so. An early Bitcoiner who mined a block as early as 2010 donated 100 BTC to the Grin project.
The second factor that contributes to Grin’s ‘fairness’ is its linear emission rate of new coins. There is one Grin created per second or 2,628,000 per month and 31,536,000 per year. Hence the high inflation in the early years creates a natural sell pressure from miners that suppresses prices and allows more people to invest in the early years and gives early adopters less of an advantage. Many might believe that Grin’s emission rate is too inflationary and other implementations like MimbleWimbleCoin have made the emission similar to Bitcoin. However, those who support different emission rates may have missed why a linear inflation rate is so important to create ‘fairness’ and allows for the wider distribution of a monetary coin. Grin’s linear emission rate also solves a potential problem that Bitcoin may encounter in the future when the bitcoin rewards become negligible and its network will have to depend on fees. Grin eliminates that uncertainty and continues rewarding miners to secure the network forever.
Thirdly, Grin is fairly ASIC-resistant because of the special mining algorithm it uses early on so smaller independent miners have opportunities to mine themselves without competing with those who have industrial hardware.
One area of weakness is that there is a lack of awareness of Grin. Like Bitcoin, most of the attention is on L1 smart contract platforms that open up the crypto universe to a multitude of applications. Bitcoin & POW coins are relatively boring. There are two other implementations in Beam & MimbleWimblecoin that dilute some of the attention from Grin. Early on most technologists are more interested in maintaining high quality code, but marketing and awareness is very important to be able to stand out among so many other projects and attract more users and ultimately have a viable network effect. Grin also requires an interactive two-step process for sending & receiving Grin so it is not as easy to use as other blockchain networks. The interactive process does prevent users from sending Grin to the wrong address or having to send test transactions so there are also benefits of requiring one extra step.
The other challenge for Grin is that it is unlikely to be listed on major exchanges. Governments in most countries put pressure on exchanges to delist privacy coins because of money laundering and tax evasion issues. Hence exchanges that usually provide a source of liquidity and awareness will be limited for Grin. A more likely long term solution for Grin will be to have atomic swap exchange platforms that will enable users to trade Bitcoin for Grin directly or have more peer-to-peer exchanges such as Bisq or 100x Trade.
Grin is also extremely undervalued right now. Its market capitalization is below $7.5 million*. If successful, Grin can be the top privacy coin out of those including Monero (~$2.7 billion*) & Zcash ($1.3 billion*) or Dash (~$0.5 billion*). Grin has the fundamentals to surpass Monero, giving Grin 100x potential.
*Market capitalizations as of 7/22/22
Note: This is a highly speculative investment and any crypto-currency's price can go down to zero.
Why is Grin so cheap?
Some of the reasons Grin is cheap is that the high inflation in the early years causes continually mining sell pressure, especially when Grin has limited awareness and so many other coin projects have more widespread appeal and can capture retail attention with pipe dreams. Most miners will sell coins to pay for operational expenses when there is no sustained upward price trend. Furthermore Grin may find exchange listings difficult so liquidity will also be an issue as governments start to restrict people’s ability to use private crypto-currencies. Hence without awareness and liquidity, the Grin community will need some breakthroughs to overcome its inherent inflationary sell pressure. In the near future, privacy coins may start to come into favor when governments start restricting Bitcoin and crypto-currencies and people look for greater protections to maintain their sovereignty. Grin is more resilient to government restrictions and useful as an underground currency than other coins. For those who are able to take on a high amount of risk who are looking for significant upside, Grin should be one of the top coins on your list.