What Is Monero, and What Is It Used For?
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Security has always been an issue in the cryptocurrency world, which is why many projects are trying to improve the level of privacy they provide while introducing more effective and efficient transactional methods.
Bitcoin was among the first to enable users to make payments via peer-to-peer blockchain technology. There is another virtual currency, Monero, that has grown in popularity and acceptability more recently, and much of this success can be linked to its privacy-focused transaction capabilities.
In this article, we will be learning about what Monero is and what benefits and profitable opportunities it offers its users.
What is Monero?
Monero, launched in 2014, is an open-source cryptocurrency that uses the code XMR for its tokens and focuses on anonymity and user privacy.
The modern cryptocurrency blockchains - the basic technology behind digital currencies - are public ledgers of members’ activity that display all network transactions. Monero’s blockchain is purposefully designed to be opaque. It conceals transaction data, such as the identities of senders and receivers and the value of each transaction, by masking the addresses of the users.
Along with secrecy, the Monero mining process is founded on an egalitarian principle, which states that all individuals are equal and deserve equal opportunity. When this blockchain was established, its creators did not hold any stake for themselves, but they relied solely on donations and support from the community to continue the development of this virtual token.
It is worth noting that currently, Monero ranks among the top 30 most popular cryptocurrencies in the digital world today.
Monero vs. Bitcoin
As previously mentioned, Bitcoin is the most widely used cryptocurrency today. It operates on a protocol that uses pseudo name addresses to conceal the identity of the participants, which comprise random letter and number combinations. However, since both the transactions and addresses of Bitcoin are published on the blockchain, they are publicly accessible.
A few transactions carried out by any participant over time may be connected to the same address, enabling others to learn about the transaction patterns, leading back to the owner.
Fungibility is a much-desired benefit of Monero over Bitcoin, which implies that two units of a currency with no difference may be swapped for each other. While two $1 notes have the same face value, they are not fungible since each has a unique serial number.
Conversely, two gold bars of the same quality are fungible since they have the same value and no identifying traits. In this example, the $1 bills represent Bitcoin, while Monero is represented by the gold bars.
The blockchain records each Bitcoin’s transaction history and enables the identification of Bitcoin units that may be connected to specific actions like fraud, gambling, or theft, paving the path for the banning, suspension, or closure of accounts that possess such units.
Consider obtaining a few Bitcoins now that were previously spent for gambling and then having them confiscated in the future, resulting in a loss.
Monero features an untraceable transaction history, providing members with a safer network in which they do not have to fear having their owned units denied or banned by others just because someone along the line obtained them wrongly.
Monero’s Privacy Features
Monero solves privacy problems via the use of stealth addresses and ring signatures. Ring signatures allow a sender to disguise their personal information from other group members. They are anonymous virtual signatures that do not show which user signed the transaction.
The Monero platform generates a ring signature by combining a sender’s account keys with public keys present on the blockchain, making it both distinctive and private. It conceals the sender’s identity since determining which of the group members’ keys was used to generate the complex signature is computationally impossible.
Stealth addresses provide extra secrecy since they are generated at random for crypto-related transactions. The usage of these stealth addresses allows for the concealment of a transaction’s true destination address as well as the personal information of the receiving party.
RingCT, also known as Ring Confidential Transactions, even allows for the concealment of transaction amounts. After successfully concealing the senders’ and recipients’ identities, RingCT was launched in January 2017 and is now required for all transactions on the Monero network.
Problems with Monero
While privacy is the main reason behind Monero’s rising popularity, it also presents significant obstacles which it needs to address in the coming years. For example, the non-traceability and anonymity qualities enable this currency to be used for shady reasons like gambling. This is one of the reasons why marketplaces like AlphaBay and Oasis, which were prominent on the dark web, saw the increasing usage of Monero before they were shut down.
According to CNBC, hackers created malicious software that infected computers in order to mine Monero and deliver money to North Korea, making this cryptocurrency vulnerable to being used for criminal operations. And since all its transactions cannot be traced, government officials always have a hard time stopping them.
How to Mine XMR Tokens
Monero is compatible with all major operating systems, including Windows, Linux, Android, macOS, and FreeBSD. The currency offers a mining mechanism in which people are paid for their participation in combining mining pools or individual mining.
An ASIC, Application-Specific Integrated Circuits, is a high-priced piece of hardware that is widely used to mine crypto tokens such as Bitcoin. However, Monero mining can be done on any computer since it does not need any special hardware.
You can even mine this virtual currency using your own computer’s average CPU or GPU. This digital currency is based on Proof-of-Work mining, an algorithm that offers security to virtual currencies and eliminates the issue of double-spending, a problem that is among the main reasons why there is inaccurate information circulating online about the total supply available for many cryptocurrencies.
Buying Monero is as simple as participating in a normal exchange or seeking a user who wants to sell their stash. You also have the option to buy Monero using a cryptocurrency-enabled automated teller machine (ATM).
Where to Buy XMR Token
Monero can be purchased via a virtual currency exchange, an individual merchant, or an ATM that accepts cryptocurrency to buy the tokens you want to buy. Whichever method you decide to use to buy the tokens, at the end of the day, just make sure that it is safe and reliable.
How Long It Takes to Mine Monero
Mining one Monero coin can take roughly two minutes. Considering it takes about 10 minutes to mine one Bitcoin, this speed is pretty good. Keep in mind that there is no max block size for this cryptocurrency yet.
The Final Verdict
Many individuals are interested in investing in cryptocurrencies, but the current prices of some of the big crypto names are certainly a put-off. Thankfully, there are other crypto tokens, like Monero, which are more affordable, easy to invest in, and provide a simple buying and trading experience.
The privacy-rich features Monero offers have helped it become a well-known cryptocurrency in a short amount of time. And thanks to its reputation, owners of Monero coins can trade on major cryptocurrency exchanges such as Kraken, Poloniex, and Bitfinex.
However, it is crucial to understand that the same qualities that make Monero so popular, like its anonymity features, also lead to some big issues, such as its usage in criminal operations. If you are a person who cares about doing everything by the book, then this cryptocurrency might not be for you. On the flip side, if you value privacy and anonymity above everything else, then buying XMR tokens is a perfect choice.
The editorial content of OriginStamp AG does not constitute a recommendation for investment or purchase advice. In principle, an investment can also lead to a total loss. Therefore, please seek advice before making an investment decision.
