One of the core principles of blockchain technology is to provide users with unwavering privacy. Bitcoin as the first ever decentralized cryptocurrency relied on this premise to market itself to a wider audience who at the time needed a virtual currency free from government interference.
Unfortunately, along the way, Bitcoin has proven to be riddled with many weaknesses including the lack of scalability and the mutable blockchain. All transactions and addresses are written on the blockchain making it easy for anyone to connect dots and reveal users’ private details based on their existing records. Some government and non-governmental agencies are already using blockchain analytics to read data on the Bitcoin platform.
These shortcomings have led developers to research alternative blockchain technologies with improved security and speed. One such project is Monero, usually represented by XMR tape.
What is Monero?
Monero is a privacy-oriented cryptocurrency project whose main goal is to provide better privacy than other blockchain ecosystems. This technology protects users’ information with anonymous addresses and ring signatures.
A daemon address refers to the creation of a single address for an individual transaction. Two addresses cannot be installed in one transaction. The received coins go to a completely different address which makes the whole process inconspicuous to an outside observer.
On the other hand, circular signature refers to mixing compute keys with public keys thus creating a ‘ring’ of multiple signers. This means that the monitoring agent cannot associate a signature with a specific account. Unlike cryptography (the mathematical method for securing cipher projects), ring signature is not a new kid on the block. Its principles were explored and recorded in a 2001 paper by the Weizmann Institute and MIT.
Crypto has certainly won the hearts of many developers and blockchain enthusiasts, but the truth is that it is still an emerging tool with few uses. Since Monero uses already tested Ring signature technology, it has distinguished itself as a legitimate project worth adopting.
Things to know before you start trading Monero
The Monero market is similar to the market for other cryptocurrencies. If you want to buy it, Kraken, Poloniex and Bitfinex are a few of the exchanges you can visit. It was first adopted by Poloniex, followed by Bitfinex and finally Kraken.
This virtual currency mostly appears pegged to the dollar or against other cryptocurrencies. Some of the pairs available include XMR/USD, XMR/BTC, XMR/EUR, XMR/XBT, and many more. The trading volume and liquidity of this coin record very good stats.
One of the good things about XMR is that anyone can participate in mining either as an individual or by joining a mining pool. Any computer with remarkably good processing power can mine Monero blocks with just a few hiccups. Don’t bother going for ASICS (Application Specific Integrated Circuits) which are currently mandatory for bitcoin mining.
Although it is a massive cryptocurrency network, it is not very special when it comes to volatility. Almost all digital currencies are highly volatile. This should not worry any avid trader because this factor is what makes them profitable in the first place – you buy when prices are low and sell when they are in an uptrend.
In January 2015, XMR was at $0.25, then it made some sprints to $60 in May 2017 and is currently running above the $300 mark. Monero coin ATH (all-time high) hit $475 on January 7th before it started falling along with other cryptocurrencies to $300. At the time of writing, almost all decentralized coins are in a price correction phase with Bitcoin swinging between $10-1K from the impressive ATH of $19,000.
innate and dependence
With its ability to provide reliable privacy, XMR has been adopted by many people which makes its coins easily exchangeable for other currencies. In simple terms, Monero can easily be traded for something else.
All Bitcoins in the Blockchain are registered in Bitcoin, thus, when an incident such as theft occurs, each coin involved will be avoided from functioning making it non-exchangeable. With monero, you cannot distinguish one currency from another. Therefore, no salesman can refuse any of them because it is related to a bad accident.
The Monero blockchain is currently one of the most popular cryptocurrencies with a large following. Like most other blockchain projects, its future looks great even though a government crackdown is on the horizon. As an investor, you need to do your due diligence and research before trading any cryptocurrency. Where possible, seek help from financial experts in order to get you on the right track.