One of the basic rules of blockchain technology is to provide users with unwavering privacy. Bitcoin as the first decentralized cryptocurrency in history relied on this premise to sell itself to a wider audience, which then needed a virtual currency free from government intervention.
Unfortunately, along the way bitcoin has proven to be fraught with several shortcomings, including non-scalability and a changeable blockchain. All transactions and addresses are recorded in a blockchain, making it easy for anyone to connect points and disclose users ’personal information based on their existing records. Some government and non-government agencies are already using blockchain analytics to read data on the Bitcoin platform.
Such shortcomings have forced developers to look for alternative blockchain technologies with improved security and speed. One such project is Monero, usually represented by an XMR ticker.
What is Monero?
Monero is a privacy-focused cryptocurrency project whose main goal is to ensure better privacy than other blockchain ecosystems. This technology protects user information through hidden addresses and ring signatures.
A hidden address refers to creating a single address for a single transaction. Two addresses cannot be assigned to one transaction. The resulting coins go to a completely different address, which makes the whole process incomprehensible to an outside observer.
A numeric signature, on the other hand, refers to mixing account keys with public keys, thus creating a “ring” of multiple subscribers. This means that the monitoring agent cannot associate a signature with a specific account. Unlike cryptography (a mathematical method of securing crypto projects), a ring signature is not a new beginning of a block. Its principles were researched and recorded in a 2001 paper by the Weizmann Institute and the Massachusetts Institute of Technology.
Cryptography has certainly won the hearts of many blockchain developers and fans, but the truth is that it is a tool that is still in its infancy, with several uses. Because Monero uses Ring’s already tested signature technology, it has singled itself out as a legitimate project that should be adopted.
What you need to know before you start trading Monero
The Monero market is similar to the market for other cryptocurrencies. If you want to buy it, then Kraken, Poloniex and Bitfinex are a few exchanges worth visiting. Poloniex was the first to adopt it, followed by Bitfinex and finally Kraken.
This virtual currency is mostly pegged to the dollar or against other cryptocurrencies. Some of the available pairs include XMR / USD, XMR / BTC, XMR / EUR, XMR / XBT and many more. The volume of trades and liquidity of this currency record very good indicators.
One of the good things about XMR is that everyone can take part in its mining both individually and by joining a mining pool. Any computer with much good computing power can extract Monero blocks with a few hiccups. Don’t worry about ASICS (application-specific integrated circuits), which are currently required for Bitcoin mining.
Although it is a formidable network of cryptocurrencies, it is not so special when it comes to volatility. Virtually all altcoins are extremely unstable. This should not worry any avid trader, because it is this factor that makes them profitable in the first place – you buy when prices fall, and sell when they are on a upward trend.
In January 2015, the XMR was worth $ 0.25, and in May 2017 it jumped slightly to $ 60, and now it has surpassed the $ 300 mark. On January 7, the Monero coin fixed its ATH (possible all-time high) of $ 475 before it began falling along with other cryptocurrencies to $ 300. At the time of writing, virtually all decentralized currencies are in the price correction phase, and bitcoin ranges between $ 10-11,000 from the glorious ATH at $ 19,000.
Interchangeability and acceptance
Due to its ability to provide reliable privacy, XMR has been adopted by many people, making it easy to replace its coins with other currencies. Simply put, Monero can be easily exchanged for something else.
All bitcoins in the bitcoin blockchain are recorded, and so when an incident such as theft occurs, every coin involved will avoid work, making them irreplaceable. With monero you can’t tell one coin from another. Therefore, no vendor can refuse any of them because it was due to a bad incident.
The Monero blockchain is currently one of the most popular cryptocurrencies with a significant number of followers. Like most other blockchain projects, its future looks great, despite government repression. As an investor, you need to conduct due diligence and research before trading any cryptocurrency. If possible, seek the help of financial experts to go on the right track.