What is Monero (XMR) Crypto Beginner’s Guide
Privacy and anonymity are two major factors that can make or break a cryptocurrency. Bitcoin showed the world that there is a possibility for digital alternatives to the modern banking and financial systems. Ethereum followed behind with its smart contract and massive platform building capabilities.
While these two cryptocurrencies have given the world a taste of anonymity and privacy, they haven’t always been able to maintain that stronghold. When ASICs occurred it opened many cryptocurrency investors’ eyes to the reality of cybersecurity and the need for better protocols. After all, what good is privacy and anonymity when the system is easily hacked and infiltrated?
Bitcoin and Ethereum have managed to develop better security protocols, but it came at a cost – time. In that time other cryptocurrencies came onto the scene with their own protocols and innovations. These cryptocurrencies would soon be dubbed “privacy coins” due to their enhanced privacy and anonymity measures.
While there are over a dozen different privacy coins to choose from, the top and most well-known of those cryptocurrencies are Monero. What makes these privacy coins better than regular cryptocurrencies? Is privacy and anonymity all these altcoins can provide or is there more to them than meets the eye?
Are these types of altcoins really impervious to ASICs and other phishing and hack attacks? What makes Monero the best of the many privacy altcoins currently on the cryptocurrency market? How does Monero intend to be the best privacy and anonymity platform for buying, selling and trading? How does Monero as a platform compare to the other well-known cryptocurrencies such as Bitcoin?
Monero: Enhancing Privacy and Anonymity in the Growing Cryptocurrency Industry
Although it holds many similarities to Bitcoin, Monero offers its own special spin on the market. Monero is built with anonymity and privacy in mind. From the beginning of the transaction to the end of the transaction, all privacy and information are kept under digital lock and key. The only ones to even see what is happening in the transaction is those that are involved with it.
This feature is great for those who find Bitcoin and other cryptocurrencies not as secure or not as reliable in anonymous transaction services. However, it these main features that have also been seen as a drawback by some critics. The criticism of Monero is mainly for the purposes in which the altcoin can and may be used. Bitcoin faced similar criticism in the beginnings when it was found as a major currency for the darknet, criminal money laundering schemes, and other black markets.
Monero is no stranger to these very same criticisms. So despite the critics, what makes Monero worth trading, selling and buying?
You may even be wondering how Monero keeps all of the digital information and transactions secret while also making sure all transactions are verified on the blockchain networks. After all, it is no secret that other major cryptocurrencies only hide the identities of its users while keeping all transaction records public. Unlike its competitors, Monero has quite a few tricks up its sleeve.
How Does Monero Work?
Monero was built as a fork off of Bitcoin. This means it uses similar blockchain technology but with its own built-in features. Its three main features are ring signatures, ring confidential transactions (RingCT) and stealth addresses. It is with these main features that Monero can provide users its private and untraceable transaction services and control over their own data privacy.
How each part functions:
This component of Monero is what brings a group of at least five signers together. It is a digital signature that is used to help the process of making transactions between these five users. Of those users, only the sender has control over the generation and sending of the spend key to the other users.
The recipient of the key will be the only one to access the funds. Due to the security of ring signatures, it is impossible for anyone to be linked in the various transactions thus making Monero a truly anonymous and untraceable cryptocurrency.
These digital addresses allow all users the ability to disconnect from the blockchain. These addresses are one-time use only and a new one is generated for every single transaction. On top of the stealth addresses, users also have a public address that is published on the blockchain.
Most, if not all, transactions on Monero will use the stealth addresses and not the public addresses.
Ring Confidential Transactions (RingCT)
This is the component of Monero that hides all information regarding the amounts of all transactions on the network. The RingCT uses a type of cryptographic proof that is used to show that both the input and output amounts are equal without revealing the transaction amounts specifically.
Monero Vs. Bitcoin: Who is the Most Private and Fairest of Them All?
When it comes to selecting a privacy coin for any transaction, you might assume that Bitcoin, Ethereum and Ripple offer similar privacy measures as Monero. Bitcoin, at best, is only pseudo-anonymous since anyone can easily determine addresses and source funds with very little information.
Ethereum and Ripple may offer similar services as Bitcoin but tend to operate with legal parameters in mind making them more regulator friendly. Monero, however, has always made it a goal to give users the easy transaction platform of Bitcoin but with way more enhanced privacy, anonymity, and security measures in place.
Because of Monero’s untraceable nature, it has unfortunately been used as a trading token on various areas of the Darknet and other digital black market platforms. But don’t let this fact deter you from Monero since it also helps you trade with other newer altcoins and keep everything earned in a secure place.
This means you can keep your hoard of different cryptocurrencies and Monero XMR in complete privacy. On top of this major feature, Monero also runs a safer network that doesn’t have issues with units being either blacklisted or refused by others on the blockchain network.
What are the Benefits of Using Monero?
Because Monero uses a special hashing algorithm in accordance with the CPU, it essentially makes it more ASIC resistant and thus more reliable in comparison to cryptocurrencies that are still vulnerable.
Uses a CPU-friendly algorithm called CryptoNote
CryptoNote is a hashing algorithm used by Monero. While this algorithm requires a good deal of CPU memory to mine Monero cryptocurrency, it is somewhat expensive.
The platform gives users full anonymity
With its combination of ring signatures and stealth addresses, users of Monero will have complete anonymity in all aspects of their transactions. After all, it is this feature that makes tracking down any transaction data next to impossible.
Does not have a limited supply of its XMR cryptocurrency
Monero is a mined cryptocurrency. It doesn’t intend to place any caps on the amount of Monero altcoins on the market. This means over time the supply for this cryptocurrency will increase steadily.
The major reason Monero uses this proof of work scheme without a market cap is to give users incentive to continually use/mine Monero as a form of extra security.
Offers users complete privacy
Users will never have to worry about their transactions being traced or invaded. The platform, algorithm, and other security features ensure that everything in Monero’s platform is built to give its users the necessary privacy that would otherwise go ignored by other privacy coins.
No one will be able to see your balances, transactions, and any other data regarding your activities on Monero. Along with balances, no one will be able to see the origins and destinations of all transactions either.
It is Untraceable
None of the transactions that use the Monero blockchain networks is linked to a particular entity or user. This is what ensures no one can be traced. whether they are sending or receiving a Monero transaction everything is untraceable on Monero’s blockchain networks.
It is Fungible
Monero is not able to be blacklisted thanks to the association it has with other transactions and cryptocurrencies. This means the cryptocurrency won’t suffer a depreciating transaction history regardless of the amount of Monero circulating on the various areas of the world wide web.
Can be used on Linux OS, Microsoft OS, and Mac OS
While it is not currently working as a mobile app, Monero is easily downloadable for those who have computers with one of the major operating systems installed.
Has a well-established community
A real perk with any cryptocurrency lies within the community that surrounds it. Monero has a reliable community that is willing to help all newcomers, assist with any issues and answer questions. The community provides information on updates, further developments and more.
It is completely secure compared to other cryptocurrencies that offer similar services
Monero is one of the few major privacy cryptocurrencies that is decentralized. All digital cash transactions are handled within the blockchain network and connected users. This means you won’t have to deal with any third-party issues and hardware/software malfunctions. Monero is still improving, adding, and maintaining its security.
Final Thoughts on Monero (XMR)
Monero is one of the best privacy coins currently on the cryptocurrency exchanges. Once you have the computer gear ready to handle the CPU usage, you will easily be able to earn and use Monero through the proof of work mining method. It is one of the most private and anonymous cryptocurrencies and is the only one to offer these types of services with success.