There has been a lot of hype around mimblewimble, the new technology that underpins Grin. Here at Coin Rivet, we have discussed what the technology actually is and the reasons for this buzz. Whilst many new projects often proclaim to have interesting new technology, it appears as though Grin actually does.
Mimblewimble was released by an anonymous person, which only adds to the interest. However, unlike when Bitcoin was announced by Satoshi Nakamoto, cryptocurrencies are now well known. They are even discussed in major news outlets nowadays.
Unfortunately for you and me, this means that those with vast sums of money have a head start when it comes to mining Grin. When Bitcoin was released, it was possible to mine the currency with little computing power. Obviously, this has changed dramatically with the popularity of Bitcoin, and mining difficulty has increased exponentially. There is now even a distinct industry specifically for mining cryptocurrencies.
All this means that the individual has been pushed out of the space as they cannot afford to compete with companies who are able to invest vast sums into mining hardware.
How does this affect Grin?
With the release of the Grin mainnet on Tuesday, people were excited to get their hands on the protocol. Even so-called Bitcoin maximalists were playing around with it. On top of this, there were videos floating around of mining farms being booted up. Theoretically, this could mean that a disproportionate amount of Grin soon ends up in a very select bunch of hands.
For a decentralised currency, this isn’t ideal. Some may argue that Bitcoin was in a similar position, with a few early adopters being able to mine Bitcoin extremely easily before it became popular. At this time, though, Bitcoin was practically worthless, which meant that sharing and donating in Bitcoin in large amounts was extremely common. Whilst whales were still prevalent, this did help somewhat to minimise such instances.
With the amount of price speculation within cryptocurrencies now, it remains to be seen whether the early hodlers of Grin will circulate the currency enough. This is why even with new and exciting technologies such as mimblewimble, Bitcoin won’t lose its top spot anytime soon.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.