Privacy and anonymity are the two main aspects of cryptocurrency, Monero XMR coin was the first cryptocurrency to address these features to the core. According to the creators of the Monero coin, digital currency should offer complete privacy which includes untraceable transactions.
Any user who’s transacting Monero should remain completely anonymous. The focus on anonymity has attracted a lot of love and hate around the world and for that reason, we’re going to explore this coin and compare it with Bitcoin, along with presenting Monero price prediction for the coming year.
Let’s dive in and explore this amazing yet controversial coin –
What is Monero XMR Cryptocurrency?
Monero is an open-source, peer-to-peer, decentralized cryptocurrency. It was launched after the hype of Bitcoin (BTC) with focus on privacy and anonymity. Though both the currencies are treated as digital cash, Monero differs when it comes to user protection by safeguarding their identity and obfuscating the transaction details by using ring signature protocol which will be discussed later in the post.
History of Monero Coin:
The idea of creating Monero was inspired by the whitepaper CryptoNote published by Nicolas van Saberhagen in 2013. He addressed and aimed to solve the potential problems identified in Bitcoin which includes irregular emission, transaction traceability, and bulky scripts.
Moved by the idea, a Bitcointalk forum member with id “thankful_for_today” coded and created a new coin named BitMonero. However, other community members didn’t agree to the direction of “thankful_for_today” and hard forked it to create Monero Coin which went live in 2014.
Unlike Bitcoin, Monero doesn’t have a public ledger that can display the transaction that has taken place between the sender and receiver, making it private in the first place. Also, the ledger doesn’t record the actual address of both parties.
Coins sent to the receiving party is routed through a temporary stealth address which is randomly created specifically for the transaction.
There is no maximum supply limit on Monero
How does Monero Work?
Monero values user privacy. Therefore it works on unique protocols that are not used by any other cryptocurrency in circulation. The core features are as follow –
Ring Signature:
Ring signatures are used to obfuscate the transaction taking place on the blockchain. It was first introduced at ASIACRYPT in 2001 by International Association for Cryptologic Research, a non-profit organization that supports research in cryptology.
Ring signatures are digital signatures that are virtually signed by the members taking part in blockchain transactions. It helps in hiding the transaction and the amount being sent by the sender to the receiver.
In layman’s terms, the protocol mixes multiple transactions and makes it impossible to identify the actual source of any transaction that has taken place on the network. When a sender initiates a transaction on the network, the protocol randomly mixes the funds of a different transaction. Hence, hides the actual amount being sent to the receiver. Over time, it becomes a tough task to crack as the transaction volume goes up in number.
View Key:
How does the receiver make sure that the transaction has taken place on the network when it is already been obfuscated by the ring signature protocol. The answer is view key.
In order to check the transaction on the blockchain, the receiver is provided with a unique view key that is only known to him. No one apart from the receiver will have access to the view key. Using the key, the receiver can check and confirm if there’s an actual transaction taken place on the network or not.
Apart from the view key, there is a public address and a private key that has specific roles on the blockchain. Private key is used to send payments and public address is used to receive payments.
Monero has the third largest developer’s community after BTC and ETH
Monero Mining:
Compared to Bitcoin, Monero mining is more generous. The creators of XMR wanted to provide equal opportunity to anyone who wish to mine Monero at any point in time. It uses a proof of work consensus mechanism (RandomX algorithm) to confirm and validate a transaction.
The algorithm disallows ASIC (Application Specific Integrated Circuit) based mining which uses expensive and highly configured devices used only by mining farms to mine cryptocurrencies like Bitcoin.
On the other hand, Monero can be mined on basic computer-grade hardware devices like ARM, GPUs etc that are energy efficient and consumes less power. This is intentionally done to keep XMR a decentralized cryptocurrency compared to Bitcoin since Bitcoin can only be mined by big mining farms that can afford ASIC. Hence, have the power to control the majority of BTC in circulation, making it more centralized with time.
Monero runs on leading OS like MacOS, Windows, Linux, Android and FreeBSD
Monero vs Bitcoin:
There’s a never-ending debate between Monero and Bitcoin. Which is better? Both the projects have their upside and downside. It’s better to compare the two side by side and draw a conclusion based on the parameters shared below –
| Parameters | Monero XMR | Bitcoin BTC |
|---|---|---|
| Privacy | Very High | High |
| Mining | Easy | Difficult |
| Block Size | Dynamic | Fixed |
| Ledger Type | Private | Public |
| Supply | Unlimited | 21 Million |
Highlighting some key differentiating factors –
ASIC Based Mining:
As explained earlier, ASIC or Application Specific Integrated Circuit chips are used when it comes to mining Bitcoin. These are expensive, high-grade hardware used by big mining farms. Since such configuration can only be afforded by large corporations, it somehow makes Bitcoin centralized by letting big players mine and control the supply.
Monero team was aware of such an outcome, so to keep XMR completely decentralized, they disallowed ASIC based mining, instead made it possible for everyone to mine Monero using the standard configuration.
Block Size:
Every block on Bitcoin is of similar size irrespective of the transaction volume. Monero uses dynamic block size which adjusts itself according to the transaction volume on the network. Hence, preventing network congestion during peak trading hours.
A block is generated every 2 minutes on the network
Stealth Address:
Monero uses stealth address every time a transaction takes place on the network. It masks the actual address of the receiver and makes him literally invisible by discouraging traceability. No one will ever know your identity and the amount you hold in your wallet. This feature is missing in Bitcoin.
Fungibility:
Any asset that’s transferable and holds equal value is fungible. For example, fiat currencies like USD, INR, YEN are all fungible assets i.e $100 bill is transferable and accepted by any party irrespective of the fact that the same $100 bill is used in illegal activities in the past.
Bitcoin is not completely fungible. The receiving party can refuse to be paid in BTC if the same token is used in illegal transactions in the past like gambling etc. Monero, on the other hand, is 100% fungible since it’s untraceable, no one can decipher it’s origin and past records.
Monero Wallet:
Monero can be stored in numerous wallets that include hardware wallets like Ledger Nano S and Trezor. It can also be stored on atomic wallets on your desktop or mobile devices. There’s one free wallet that is quite famous in the community, which goes by the name MyMonero.
MyMonero was developed by the core project developers and was launched as a browser wallet before coming up with desktop and mobile versions. MyMonero PC wallet is the most simple and preferred wallet used to store coins.
Ledger Nano S is our suggested device to store Monero XMR coin
Monero Benefits:
Privacy by Default:
Monero means privacy. If you wish to take charge of your money and keep it safe from external agents, Monero is your answer. A completely anonymous, untraceable blockchain is here to obfuscate your identity and your wallet.
Mineable Asset:
The core developers understand the value of decentralization. Hence, allowed everyone to mine XMR using standard hardware thus encouraging supply and circulation.
Secure Wallet:
With Monero, your wallet is completely secure. Using stealth addresses during transactions removes the chance of exposure of the actual address anywhere on the ledger. No one will ever know your wallet address and how much money you’re holding. Making it totally secure and safe from cyber theft.
Minimal Network Congestion:
Block’s ability to automatically change size with respect to the transaction volume on the network, helps the network remain congestion free. This helps faster confirmation and smoother transactions.
Monero Drawbacks:
Monero Ban:
The trading of Monero XMR is completely banned in Australia and South Korea amid regulatory pressure. The features of the coin disallow adherence to the protocols of these nations.
Illicit Use:
The very feature of the coin has turned into a major setback after being reported its usage in encouraging illegal activities like gambling, drug dealing, creating ransomware and harmful mining malware.
Limited Use Case:
Monero has a limited use case. It cannot be used to create DAPPS or perform smart contract computations which is the latest trend in the blockchain industry. Projects like COSMOS Crypto (ATOM), ICP Coin are far ahead in technology when compared to Monero.
Monero Price:
Please check the latest XMR Monero price, shared below –
Monero Price Prediction:
Monero was launched to address the shortcomings of Bitcoin and subsequently provide a better, safe and secure digital currency which is very hard to crack and impossible to trace by utilizing the core principles of cryptography.
There’s no other cryptocurrency project anywhere near Monero that can match the privacy and anonymity it provides to the users. Monero means Money, your money in your hands. By all means, it’s a better currency than Bitcoin with its ability to remain decentralized by encouraging easy mining with a standard hardware configuration.
Unfortunately, the project has drawn a lot of criticism from the regulators and crypto critics on its features that encourage illegal activities like money laundering and other thefts. The currency has already been banned by leading nations like South Korea and Australia. The cloud of being banned by other nations always looms on Monero XMR.
Despite the criticism, it was able to survive the downturn and still counted as the top digital currency project powered by a community of 30 core developers. Monero is a digital currency and mimics the price action of the king of cryptocurrency i.e Bitcoin. Therefore, it’s an interesting project to watch and invest in during the major bull cycle.
If everything remains stable and there’s no ban imposed by any nation in the coming future, it is easy to expect XMR to rise to the price level of $1000 in the next bull cycle. On the downside, if there’s an increase in regulatory pressure from the governing authority then the fall is imminent which can pull down the price to below $100 anytime. One bad news and the price will crash.
Where to Buy Monero XMR Coin?
Monero is available to trade on the leading exchange including Binance and Coinbase. You can buy, sell or trade Monero and transfer it to your preferred wallet.
Indian users can purchase Monero XMR on WazirX exchange by depositing INR and converting it to USDT. Make sure to complete your KYC before purchasing coins on any of the shared platforms.
Is Monero a Good Investment?
Monero is a digital currency which is created to facilitate online trading. Just like Bitcoin, it can be used to purchase items online or make a trade with the parties accepting it. Unfortunately, it has become a currency for criminal activities largely used on the dark web as a mode of payment.
This has led to the backlash by concerning authorities but it didn’t stop Monero from growing. It still holds ground and the team is continuously working on improving its features and protocols. Though it may not make it to the mainstream anytime soon, it is still considered a store of value by investors. With the boom in the crypto market and rise in digital currency adoption. Monero has a big room for growth.
It is a currency that can be invested in, keeping in mind the threats involved. The primary one is from the legislation itself. The currency is a threat to the government and a treat to the individuals. It’s a seesaw game since Bitcoin is still fighting for adoption and Monero is already under regulatory pressure.
Though the outlook is positive the risk is high. Therefore, be careful before investing in Monero (XMR). I suggest only invest the amount that you’re willing to hold for a long period of time.
This completes my review of Monero XMR Coin with possible price prediction. In the next post, I will cover Shiba Inu Coin (SHIB) and Terra LUNA coin. If you like the post, please share it on your social handles and educate everyone around you. Do remember to subscribe to my YouTube channel for more informative content, released every week.
DISCLAIMER:
Cryptocurrency is a highly volatile market. All the information shared in the post is for knowledge purpose only. By no means, it’s financial or investment advice. Readers are responsible for their own investment decisions and should only invest in cryptocurrency after proper research.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.