The cryptocurrency market flooded with a wave of new coins after the great success of Bitcoin.
But only a few of them managed to achieve recognition of traders and break out into the world TOP. Monero was among them.
It is an unusual cryptocurrency, the success of which is explained by the increased anonymity of transactions.
Whether Monero is entirely anonymous cryptocurrency? What functionality did its creators put into the coin? How does the market value of Monero change and, the most important, does it make sense to invest in it right now? About all this and much more, we’ll explain in our article.
What is Monero Cryptocurrency?
The official birthday of Monero (token XMR) is April 18, 2014. The coin appeared as a result of the fork of the ByteCoin network (not to be confused with BitCoin).
Bytecoin was a very popular cryptocurrency and gained fame as almost the primary means of payment for the darknet. But the confidence in the cryptocurrency shattered when it became known that 80% of the coins had already been issued and even distributed among the particular users.
So seven people from among the creators of Bytecoin separated and have conducted a fork, creating a new cryptocurrency, based on the source code of Bytecoin. Its brainchild developers called “Monero” (literally meaning “coin” in Esperanto).
The main feature of Monero is the complete anonymity of all participants in the process. Perhaps, that’s why from 7 developers only two of them are known to the general public.
They are Riccardo Spagni and Francisco Cabanas. The rest hide under pseudonyms and don’t advertise their activities. Although, perhaps, increased anonymity is associated with the ambiguous perception of cryptocurrency, about what we will discuss further.
Whatever it was, the project started quite successfully, and the users having claims to Bytecoin favorably accepted it. However, the network faced a powerful hacker attack just a few months after the launch.
The developers managed to eliminate the vulnerabilities identified during the attack, launch their crypto wallet and bring Monero to cryptocurrency exchanges only by the end of 2014. The anonymous coin immediately attracted attention of the experienced traders, who were previously looked to Bytecoin.
The Difference Between Monero and Other Cryptocurrencies?
First of all, the principal difference is the fact that instead of the usual blockchain, Monero uses a unique Protocol CryptoNote, or rather its variety CryptoNight.
This is the technology of the so-called ring signatures, which was invented long before the creation of Monero.
However, the developers didn’t mindlessly copy someone else’s technology, but improved it and turned into an extension of their goals. Precisely, for one primary purpose, which is to create a network with the maximum anonymity of transactions.
How does it work? In a simple way, the system randomly generates a group of users, each member of which receives its access keys for payments (secret and public).
Providing a transaction, the participant presents his/her public key (it acts as a digital signature of the group) and uses a secret key, which only he/she knows about. None from the entire network knows his/her private key and cannot determine who made the transaction.
The system continually mixes transactions and hides the balance of the users, using randomly generated addresses for more anonymity of transactions.
Conditionally, the system generates a one-time address, at which the transaction takes place when you make a transfer.
At the same time, no one sees your real web address and does not know, what amount and to whom you transferred. The next time the system will generate a new address, and it will not be possible to track your transfers.
The coins are shuffled continuously in the system, and no one can track or correct this process. It is built randomly. You will not achieve this level of anonymity in the Bitcoin network, even if you contact the third-party mixers.
The developers also added Ring CT technology in 2017, which hides the transferred amounts completely. If Bitcoin standard transaction looks like “Bob sent to Pete 1 BTC”, then Monero transaction looks like “User X sent to user Y N-number of XMR.” Soon it is planned to introduce the Kovri algorithm, which also hides the IP-addresses of users.
But this is not all features of Monero. You’ll see the other significant differences of this coin if you compare it with Bitcoin and other cryptocurrencies.
- The total emission of the bulk of coins is limited; therefore, if the cryptocurrency is in high demand, its value will only grow. Until 2022, 18.5 million coins will be issued, after which it is planned that the miners will receive 0.6 XMR per each two-second block. The miners, according to the developers, have to maintain the functioning of the system themselves after the release of the bulk of the coins.
- Monero user accounts are much better protected from hacking. For example, thanks to the introduction of Proof-of-work validation technology, the dual charge in Monero that is so widespread in Bitcoin is merely impossible.
- Transactions take up to 8 times more space than in Bitcoin, due to the use of heavy-weight algorithms in the Monero network.
- Regarding the volume of coins mined, the mining of Monero is less effective than Bitcoin mining. The system uses a “heavy” AES algorithm, which uses much more computer memory.
Where to Store Monero?
Currently, you can store Monero only on the official crypto wallet for XMR.
Two versions of the wallet are available at the moment:
- Online wallet is suitable for short-term storage of money, and it does not require installation on your computer. To create such a purse, go to the official site mymonero.com website and click on “Create a new account.” In the window that appears, enter the private key (it will be listed below) and log in to your account. Here you will store your coins.
- Computer wallet is suitable for long-term storage of cryptocurrency, more reliable and protected from hacking. It is possible to download the program on the GitHub website or another similar resource. Run the installation file on your computer and create a wallet by creating your login and password.
The hardware wallets for storage of Monero should appear soon. The Ledger Company has already announced the work on a new wallets Blue and Nano S with the support of XMR.
The Advantages and Disadvantages of Monero
Monero like any other cryptocurrency has some disadvantages and advantages. Therefore, it would be correct to take a look at both sides of the Monero “medal,” and let’s start with cons.
Disadvantages. The size of its transactions can be can be attributed to cons of Monero, which in comparison to other cryptocurrencies is almost ten times larger. This fact significantly increases the load on cryptocurrency blockchain, so sometimes there may be delays in transfers. The second disadvantage of Monero is its anonymity. It seems to be there, and it is enough to hide user data, but still, it is not absolute, such as with Zcash.
Advantages. This cryptocurrency is much safer than most other cryptocurrencies, and this is what made the demand for it, which subsequently allowed it to be in the TOP 10 for capitalization. But, the appearance of two Bitcoin forks moved Monero to the 11th place.
Thanks to the CryptoNight technology, which we mentioned above, Monero mining is possible only with the help of the Central (CPU) and graphics (GPU) processors.
As a result, mining with Asic Miner is prohibited. At the moment, the most profitable type of Monero mining is the mining, using graphics cards (GPU). Its efficiency increases if you do Monero mining, based on the Linux operating system.
The minimum number of XMR coins that can be withdrawn is 0.01 XMR. Monero Mining will still be relevant even if the maximum number of mined XMR coins will be reached. The reward for solving of one block will be 0.6 coins, with an average block generation time of 2 minutes.
Is it Worth Investing in Monero?
Monero cryptocurrency was released on the electronic currencies market in 2014. Today its capitalization to Bitcoin is 1/100.
This amount is about $60 million (Bitcoin capitalization reaches $9 billion), and it is continually increasing. This indicates a significant potential growth of the Monero cryptocurrency.
The only downside of the currency is the small number of users, which makes it difficult for the transactions to mix. That is, any major trade can pop up and become noticeable for those, who track such transactions.Now the developers are actively working to promote the currency. Given the high anonymity and growth of demand, the success for them is quite assured.
That is why many experts and analysts claim that now is the time to buy Monero to get a good profit in the future. However, such investments will be complicated for those, who prefer Bitcoin. The main problem is technical support.
Summing up, we can say that Monero cryptocurrency is suitable for most users. It is also attractive for users, who invest in crypto for earnings because it has the potential for growth. You need to use this network in order to evaluate all the delights and benefits.