TL;DR
Grin (GRIN), a new cryptocurrency which employes the Mimblewimble protocol, has just crashed in matter of hours. The coin managed to launch its MainNet only days ago, and while its initial value exceeded $260 per coin after its first block was mined, it lost over 98% of its value in less than a day.
Grin is an innovative, new privacy coin which provides users with a certain level of privacy and anonymity during their monetary exchanges. Grin has governance which can be compared to the cyberpunk ideology; it encourages a community-driven decentralization. The developers are volunteers, and there is no ICO.
Grin is utilizing the Mimblewimble protocol which combines two concepts. The first concept is a Confidential Transaction. A confidential transaction encrypts the value of the transaction, so it is not visible to anyone outside the participants of this specific transaction. The other concept is the Cut-Thorough. In Cut-Through the transactions are merged inside a block, so all intermediate transactions are removed. This concept significantly reduces the size of the blockchain which makes its storage much more scalable.
Why did the Grin value drop?
Grin is a coin that received a lot of attention and hype during its development, and the excitement about the coin only increased as the launch date approached. As a result, as soon as the first block was mined and Grin coins appeared in circulation, the huge demand launched its value to extreme heights. However, as the mining continued and new coins were generated, the supply expanded and the coin started rapidly losing its value.
The current price drop does not mean that the quality of the coin is bad. Instead, the massive demand by those who studied it and followed its development in recent months indicates that the crypto community very much appreciates the coin.
Grin team wanted to position Grin as a real currency and less as a store of value. In contrast with Bitcoin were there is a finite amount. Grin will have an infinite amount of coins with a linear supply schedule. This means that inflation as a percentage of existing supply is very high in the early days but continually lowers over time. In theory, converging to zero percent, but it will never get there.
As mentioned, the initial hype brought the coin’s value to as much as $261.65 when the coin first emerged. At the time of writing the sharp drop which followed has reduced the value of Grin to $7.5.
Grin price change pattern was had already been witnessed
Ever since the hype about Grin was noticed, it was logical that its price would likely skyrocket as soon as it hits exchanges, only to drop down after more coins are generated, which is precisely what investors have witnessed in the previous 24 hours.
However, Grin still received a lot of attention thanks to its privacy features and improvements that allow it to operate more efficiently than some of the older cryptocurrencies. Despite the price drop, a lot of investors remain optimistic about the coin.
Other coins such as Monero, Zcash, and Ravencoin had a very similar pattern to Grin. The inflation rate was very high in the early days of the coins. Therefore, the price dropped until the inflation ratio decreased. From that moment, the fundamental analysis of the coin takes control and moves the price up.
