One of the basic rules of blockchain technology is to provide users with unwavering privacy. Bitcoin, as the first decentralized cryptocurrency, relied on this premise to offer itself to a wider audience, which then needed a virtual currency free from government intervention.
Unfortunately, along the way, bitcoin proved to be fraught with several weaknesses, including immutability and variable blockchain. All transactions and addresses are recorded in the blockchain, thus making it easier for everyone to connect the points and reveal users’ personal data based on their existing records. Some governmental and non-governmental agencies already use blockchain analytics to read data on the bitcoin platform.
Such shortcomings have led developers to look for alternative blockchain technologies with improved security and speed. One of these projects is Monero, usually represented by an XMR ticker.
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 through hidden addresses and ring signatures.
Stealth address refers to the creation of a single address for a stand-alone transaction. Two addresses cannot be attached to one transaction. The received coins go to a completely different address, which makes the whole process unclear to an outside observer.
A ring signature, on the other hand, refers to mixing account keys with public keys, thus creating a “ring” of multiple signatories. This means that the monitoring agent cannot associate a signature with a specific account. Unlike cryptography (a mathematical method for securing crypto projects), a signature ring is not a new child in the block. Its principles have been studied and recorded in a 2001 paper by The Weizmann Institute and MIT.
Cryptography has certainly won the hearts of many blockchain developers and fans, but the truth is that it is still a nascent tool with several applications. As Monero uses the already proven technology to sign the Ring, it has stood out as a legitimate project that is worth embracing.
Things you need to know before you start trading Monero
Monero’s market is similar to that of other cryptocurrencies. If you want to buy it, then Kraken, Poloniex and Bitfinex are some of the exchanges you should visit. Poloniex was the first to adopt it, followed by Bitfinex and finally Kraken.
This virtual currency mostly seems to be pegged to the dollar or to other cryptocurrencies. Some of the available pairs include XMR / USD, XMR / BTC, XMR / EUR, XMR / XBT and many more. The volume of trade and liquidity of this currency are very good statistics.
One of the good things about XMR is that anyone can participate in its digging either as an individual or by joining a digging pool. Any computer with significantly good computing power can dig Monero blocks with a few hiccups. Don’t worry about choosing ASICS (application-specific integrated circuits), which are currently required for bitcoin mining.
Although it is a great network for cryptocurrencies, it is not so special when it comes to volatility. Virtually all altcoins are extremely unstable. This should not worry every avid trader, as this factor is what makes them profitable in the first place – buy when prices are falling, and sell when they are on an uptrend.
In January 2015, XMR was for $ 0.25, then did a little jogging to $ 60 in May 2017 and is currently moving above the $ 300 mark. The Monero coin recorded its ATH (all-time peak) of $ 475 on January 7, before declining along with other cryptocurrencies to $ 300. At the time of writing, almost all decentralized currencies are in a price adjustment phase, with bitcoin swinging between $ 10-11k from its glorious $ 19,000 ATH.
Interchangeability and acceptance
Thanks to its ability to offer reliable privacy, XMR has been adopted by many people, making its coins easily replaced by other currencies. Simply put, Monero can be easily traded for something else.
All bitcoins in the Bitcoin Blockchain are recorded and therefore, when an incident such as theft occurs, any coin involved will be avoided from work, making them irreplaceable. With monero you can’t tell one coin from another. Therefore, no seller can reject any of them because it is related to a bad accident.
Monero blockchain is currently one of the most current cryptocurrencies with a significant number of followers. Like most other blockchain projects, his future looks great, despite the impending government crackdown. As an investor, you need to do your due diligence and research before trading any cryptocurrency. When possible, seek help from financial experts to get you on the right track.