The new Grin cryptocurrency, which utilizes the MimbleWimble protocol, has a fanciful name but isn’t off to a storybook beginning, with criticism and accusations immediately plaguing the effort. Many have begun criticizing its technical foundations, and noting that its lack of funding transparency suggests it isn’t the open-source passion project it advertizes.
Grin is a privacy coin which distinguishes itself by completely obscuring transactions. Any transaction is done by wallets which directly connect with each other, at which point the transaction is made anonymous before being written to the blockchain.
The first Grin block was mined last week, launching the privacy coin which according to Grin’s official website (https://grin-tech.org/) offers a cryptocurrency without censorship or restrictions. It didn’t take long for many to point out their concerns.
Notably, developer Dovey Wan pointed to the fact that exchanges had already listed Grin even before any coins had been mined, which is not only problematic for the exchange and Grin, but it suggests a serious issue with centralized exchanges.
The incentive can be strong - simple print more *BTC*on other hand short BTC, and get the real BTC from trx fee at no cost 😳😳— Dovey Wan 🦖 (@DoveyWan) January 18, 2019
we need more scrutiny into the shadow banking equivalent of crypto otherwise will fail for the same old greed
The issue is that there is no transparency between the volume that exchanges publish, and their actual internal books. This means that an exchange easily has the capability to alter the economics of any cryptocurrency to benefit themselves economically.
While this criticism is levied specifically at exchanges, as Grin picked up steam it itself encountered some technical problems as well. These include high mining difficulty, and a suddenly depreciating price, as pointed out by Crypto Briefing. Still, these problems may resolve themselves, and plague many early cryptotokens as they adjust their protocol upon release.
A more serious and fundamental critique of the entire Grin project was taken on by Bits Online today, who pointed out that while Grin may represent itself as an altruistic and volunteer created project, there are reasons to believe this isn’t the case. Most notably they pointed out that Grin itself lists a number of huge for-profit organizations as part of their ‘community funding model’ (https://grin-tech.org/friends), including Cypher Capital and Block Cypher. Grin maintains that it does not take capital in exchange for ‘undue influence,’ but this claim is always hard to evaluate.
Grin may still find success with its anonymized, lightweight coin algorithm. Furthermore it’s entirely possible that it is completely uninfluenced by its donors and is truly dedicated to making a completely decentralized and anonymous privacy coin. Either way, it has found a lot of criticism very early in its release, and will likely need some luck if it is to become a significant competitor in a saturated crypto market.