Many good things come with being a pioneer in something, and for the case of Bitcoin; the story is not so different. It happens to be the best-known cryptocurrencies, but many people do not know that there are thousands more, all promising to improve on aspects that the Bitcoin fails to tackle.
One of these is Monero, which has proven popular with users wanting to spend their money privately without the interference of third parties.
What is Monero?
This is a cryptocurrency, meaning it uses cryptography to regulate its supply and management instead of central banks for regulation. The Monero currency in particular focuses on decentralized management and privacy, and a plus is that it runs on several operating systems – FreeBSD, Windows, Android, macOS, and Linux.
The aim of the currency is to enhance existing designs of cryptocurrency transactions through hiding the parties’ identities in each transaction, while also making the process equal for all people. The coin formed in 2013, though the founder is unknown and goes by the name Nicolas van Saberhagen.
Monero initially began from a BitcoinTalk forum participant (only known as thankful_for_today), and this person chose to call the currency BitMonero (compound name of Bitcoin and Monero – meaning coin). A week later, the supporters of the currency agreed that the name changes to Monero.
In 2014, an unknown person chose to exploit a loophole within the currency system. This flaw was the allowance of two sub chains that fail to recognize each other’s validity, but the system fixed this flaw soon afterwards. In 2016, the currency achieved major growth.
What makes Monero different?
The coin lays heavy emphasis on privacy, and this is what distinguishes it from others. It uses several methods to enhance user anonymity, and we have stated some of these below.
Anonymous transactions – you may think that Bitcoin transactions are private. However, this is not the case; because they are on the public ledgers, they are accessible to everyone. Monero is different because it utilizes ring signature (digital signatures from any user of your group/ring) and this allows for mixing of transactions. This implies that when transactions occur, the money exists as random rings of the same amount, though one of these is the real transaction.
Stealth Addresses – another feature that enhances user privacy because it does not permit third parties to view transactions on the blockchain. It works similar to bank account numbers in this regard. Even though you provide someone with your account number, only you can see your transactions and bank balance. These addresses guarantee your security through irreversible cryptography math that prevents listing of the transaction to the public.
Alternative coins to use
Monero is a currency that indeed improves on user security by a large extent. A favourite among many, it has great potential to succeed greatly among cryptocurrencies, even Bitcoin. Other coins on the market not only work better, but also more efficient in handling transactions and here is a list of several of them.
ETH (Ethereum) – A coin formed in 2013, it allows for equitable spread of submissions and processing of contracts without the glare of third party views. It has a fast rate of processing transactions because it uses programming codes of decentralized applications, unlike Bitcoin and Monero that focus on blockchain technology.
XRP (Ripple) – Ripple is among the largest in the market, and it offers you friction-less, prompt international payment. You also do not require mining the coins therefore it reduces computing power. It is also gaining popularity among financial institutions because it allows them to process their customers’ payments immediately.
Verge (XVG) – this currency is also a recent one, improving on the Bitcoin and Monero blockchains. Its main aim is to provide both businesses and individuals with a faster, decentralized and efficient manner of direct transactions while they maintain their privacy. Among its features is an anonymity-centric network including 12P and Tor, and results in transactions becoming untraceable.
Zcash/ZEC – a coin from 2016, it offers users added privacy and voluntary transparency. The blockchain design is unique from Monero because it only shows you that transactions occurred without revealing the identities of the individuals or the cash involved. It is open source in nature – because of this; the Zcash Company has no control over it.
Bitcoin – the most famous out of this list, it is a P2P (peer-to-peer) currency, which is also open source. You can operate it on the internet easily without using intermediaries, and transactions cannot reverse once completed (due to their design).
Technology behind Monero
The difference between Monero and other currencies that are Bitcoin derivatives lies in the architecture. Monero uses CryptoNight PoW algorithm, originating from CryptoNote protocol. It has differences in algorithm structure because of obfuscation of blockchain (meaning they are difficult to understand).
Because of this, other units substitute the currency easily. This is unlike currencies such as Bitcoin where currencies with low activity levels are on the blacklist and other users can refuse them.
The ring signatures are another contrast point – it makes it hard to establish links between transactions. Stealth addresses help protect user information even further, and the RCT (ring confidential transactions) hide the amount.
Trading Monero currency
You cannot mine Monero coins using the usual software because they are resistant to integrated circuit mining (common among other currencies like Bitcoin). Trading is a more efficient way of acquiring them, though you can also mine them using consumer grade hardware such as GPUs and x86.
In light of this, the options you have of storing the currency are not many, except for online wallets.
Similar to other cryptocurrencies, you should store Monero in a digital wallet. The wallet that many use is ‘MyMonero’, and it is an online wallet.
Go to MyMonero.com and create a new account
Note your private key (do not lose this information)
Confirm your account by re-entering the private key.
One thing to avoid is storing your Monero coins (or any other cryptocurrency) on currency exchanges because it runs the risk of hacks.
Buying the currency – steps
Before commencing on trade, it is important to note that all cryptocurrency values are unstable. Trading cryptocurrency comes with a high share of risk, but you can participate in the market as long as you diversify your investment sources.
How to buy Monero
Among the easier ways you can buy the currency is from Changelly because of its cheaper rates and support for USD tethers. You can do this through the following steps:
Set up your wallet. Note that you cannot buy Monero currency directly at the moment, but it is better to buy another currency first and exchange it later.
Select the currency you want to exchange. The process is easy – select BTC for what you have, and Monero for what you want. Once you enter the coin amount you want to exchange, the application will calculate the exchange fees and rates for you immediately.
Select next, and enter your Monero (XRP) address.
Select Next. Read all the details, make sure they are correct, and confirm your transaction.
Monero prices and trading history
The currency is newer than most, so it does not have an extensive history of data in price changes. Though Monero has the potential to grow into a leading currency, it is important to remember that all cryptocurrencies are volatile in nature, and price changes may be very significant.
Monero has had its share of volatile prices, mostly through fluctuations in demand and supply. Since it started trading on CoinMarketCap for instance, its price shot up by 1300% and 70% in one month. The price of the Monero coin ranges from $0.25 (2015 January) to $60 (2017 May). This may prove attractive to investors because of the opportunity to speculate prices and get very good returns.
Is it worth trading in the coin?
This is a complicated question, because some authorities and analysts do not approve of investing in cryptocurrency in general. The reasons they usually give range from the highly volatile nature of these currencies, and the fact that their value is unpredictable. Another problem with Monero is its current low trading volume.
Other voices point out the increasing value of Monero investments – and that if you do not take an opportunity now, you will regret missed opportunities in the future. We have compiled a list of various facts that make this currency so exciting in potential:
It does not have a finite supply, unlike Bitcoin.
The privacy of transactions – the protection of user information is very high and transaction information is untraceable.
The generation of blocks is shorter than other currencies by a significant margin – taking only 120 seconds.
These benefits do not negate the high risks of investing in cryptocurrencies like Monero. However, if the cost of loss is lower than investment cost on your end, put your money in it.
Monero currency usage is identical with the rise of cash payments done through digital means. Because individuals want to enhance privacy of transactions, this makes Monero a top choice for people who want to maintain secrecy. The potential advantages are immense when you put your money wisely.