Spectrecoin (XSPEC) attracted some attention early this year when it became one of the fastest-growing cryptocurrencies. Spectrecoin achieved a Coin Price of 37¢ on 13 April 2018 that fell to 23.94¢ by 16 September 2018.
So what is Spectrecoin and was all the hype about it justified? Spectrecoin is apparently a basic privacy cryptocurrency, and no the hype about it was not justified.
Interestingly, the interest in Spectrecoin might be rooted in the last James Bond movie Spectre. Spectre; as all James Bond fans know is the secret network of supervillains 007 sometimes fights. Its head Dr. Blofeld is Bond’s archenemy.
There is nothing Unique about Spectrecoin (XSPEC)
Spectrecoin is an ordinary privacy cryptocurrency that appears no different the zillion other privacy altcoins out there. It is based on Bitcore and functions a great deal like Dash (DASH), Blackcoin (BLK), or Zero (ZER).
Like Dash, Spectrecoin is an effort to create an untraceable alternative payments network. To that end, Spectrecoin can be sent through TOR (the Onion Router) an anonymity network that operates through the internet.
TOR is supposed to provide an additional layer of anonymity by letting users send information without IP addresses. The idea is that data sent transmitted without an IP address will be harder to trace.
Can the US Government Trace Spectrecoin (XSPEC)?
An inherent advantage to TOR-enabled networks like Spectrecoin is that there are no nodes to trace. However, there is a “hidden service” address which presumably can be traced.
It is important to realize where TOR comes from before relying on it for anonymity. The basic idea behind TOR was initially funded by the US Naval Research Laboratory, a United States federal agency. TOR later received funding from the Defense Advanced Research Projects Agency (DARPA) the U.S. military’s funding mechanism for research projects.
Therefore, TOR is not all it is cracked up to be. It would be safe to assume that the US government has some means of tracking TOR communications and Spectrecoin transactions.
How Spectrecoin (XSPEC) offers Anonymity
Like most privacy cryptocurrencies, Spectrecoin employs a number of tricks to thwart trackers.
These tricks include a dual-coin system, which adds an anonymous subsystem to Spectrecoin. Therefore, Spectrecoin theoretically contains two coins in one. The second coin is supposed to add an extra layer of security. Like Zerocoin, Spectrecoin is supposed to destroy certain coins to make it harder to track.
The Impossible Claims of Spectrecoin (XSPEC)
Spectrecoin’s team is trying to develop a proof-of-stealth algorithm. The problem with that is you would only be able to demonstrate proof-of-stealth by tracking transactions.
Therefore, the transactions would not be anonymous or stealth. Absurdly, Spectrecoin’s creators promise to create “stealth addresses,” there is no way an address can be stealth. If an address exists it can be traced.
Worst of all, Spectrecoin’s developers make an impossible claim for the product. The developers claim Spectrecoin will deploy a fully anonymous system at some point.
The only way for a system to be fully anonymous is for nobody to use it. If nobody is using Spectrecoin it would have no value.
To it differently, you cannot trust Spectrecoin because its creators are making impossible and questionable claims. For instance, Spectrecoin claims to be stealth but has a list of addresses that can be stolen and traced.
I have to wonder if some intelligence agency or law enforcement agency created Spectrecoin with the possibility that bad guys will use it. I cannot see any other reason for the creation of anonymity currency that offers no anonymity.
Stay Away from Spectrecoin (XSPEC)
Speculators should stay far away from Spectrecoin because of the spurious claims and dubious purpose.
Spectrecoin (XSPEC) had some value in the form of a $4.977 million Market Capitalization and a 24-Hour Market Volume of $2,049 on 16 September 2018. There was a circulating supply of 20.785 million XSPEC on 16 September 2018.
The result of those numbers was a 23.95¢ Spectre Coin Price on 16 September 2018. Therefore, privacy has some value.
There is apparently no Total Supply or limit to the number of Spectrecoins. Consequently, Spectrecoin is very vulnerable to inflation, because it might be possible to make unlimited numbers of them. To make matters worse, it is reputedly possible to create anonymous Spectrecoins.
Therefore, it will be easy to flood the market with XSPEC to drive down prices. Spectrecoin’s creators appear to have deliberately built one of the worst flaws of paper money into their altcoin.
The greatest danger with paper money is that anybody with a printing press can counterfeit unlimited amounts of funny money. The worst case scenario is Hyperinflation in which all paper money becomes completely worthless.
Speculators are advised to avoid Spectrecoin. If you want to speculate in a privacy cryptocurrency try Dash (DASH). Dash (DASH) has some real-world uses including merchants in Venezuela, Spectrecoin does not.
Moreover, DASH was the 12th largest cryptocurrency. Dash had a Market Capitalization of $1.554 billion; a Coin Price of $186.68, and 24-Hour Market Volume of $202,775.158 on 16 September 2018.
The moral of the Spectrecoin story is that a cool name does make a good speculative altcoin. Spectrecoin is apparently a lousy cryptocurrency with a cool name. If you want to speculate in a cryptocurrency with a cool name try DASH.
This story first appeared at Market Mad House your ringside seat for cryptocurrency insanity.