Is Loki Trying to Compete With Monero?

There are a lot of community members who ask if Loki is trying to compete with Monero. At face value, it seems like an obvious assumption to make. However, our intention is to use Monero as a proven and solid basis to build an additional feature set that goes beyond anonymous payment systems. So long as Monero maintains its efforts to be the pinnacle of private transaction networks, it is unlikely that Loki will ever pose a ‘threat’ to the Monero project.

Competition is a funny concept when it comes to open source projects – any notion of a ‘market share’ is completely incidental to the perceived value of the work that open-source communities produce and what real world use cases that work enables. Crypto is an open marketplace of ideas. Loki is simply harnessing the ideas presented in Monero and using them in a way that we believe sits outside the current scope of the Monero project.

I find it comical to suggest that I, or any other person, could conceivably submit a pull request to the Monero GitHub that included a novel implementation of masternodes which used the network they form to send private communications and have it accepted and merged by the Monero community.

We receive a lot of criticism because of our intention to put a ‘masternode’ system on a Monero based blockchain. It seems that many community members simply don’t like masternodes – which is a fair stance when considering their history – but being so dismissive is hardly scientific. We have made significant efforts to redesign the masternode system so that the issues of centralisation seen in Dash and other masternode based coins are addressed. In theory, masternodes do solve a genuine problem. If Monero or any derivative thereof receives a high transaction volume to the degree that Bitcoin has, weak nodes will come under significant stress and struggle to propagate transactions, and will be dealing with an enormous blockchain that in Monero’s case, can not be pruned. Additionally if you have noticed issues connecting to remote nodes when using the Monerujo android wallet that is because the limited number of remote nodes available limits the quality of the user experience. With no concrete incentivisation of these nodes and as demand for them increases, fewer nodes are run, thus actually centralizing the network.

Bitcoin Core approaches this problem by focusing on making the blockchain as lightweight as possible, so that full nodes can be run anywhere (in theory). For good all privacy coins today, the blockchain bloat problem is always going to be worse, as you will always have to include more information in a transaction, so the ‘lightweight’ approach will not be as tenable in our opinion.

Furthermore, the masternode system allows us to convincingly use the full-node software to carry out secondary activities where the participants are incentivised to do so, while malicious actors have a high cost of entry. Without an economical framework, we would expect that any decentralised service could be (and historically have been) subject to resource deprivation and exploited by malicious actors whose participation allows them to perform attacks on the network and/or it’s users. The Tor network is a perfect example of this.

The purpose of Loki is to use this economic layer to enable a decentralised, anonymous networking protocol that can be used primarily for private communications. That economic layer needs a basis in proven technology, and the ideas presented in Monero are the obvious choice for the job.

Simon

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