One of the core concepts of blockchain technology is to provide users with unwavering privacy. Bitcoin is the first decentralized cryptocurrency in history. It relied on this premise to sell itself to a wider audience, and the audience at the time needed a virtual currency that was free from government intervention.
Unfortunately, along the way, Bitcoin has been riddled with many weaknesses, including non-scalability and variable blockchains. All transactions and addresses are written on the blockchain, so anyone can more easily connect various points and disclose the user’s private details based on their existing records. Some government and non-governmental organizations are already using blockchain analysis to read data on the Bitcoin platform.
These shortcomings led developers to start researching alternative blockchain technologies with higher security and speed. One of these projects is Monero, usually represented by XMR codes.
What is Monero?
Monero is a privacy-oriented cryptocurrency project whose main purpose is to provide better privacy than other blockchain ecosystems. This technology uses stealth addresses and ring signatures to shield users’ information.
Stealth address refers to the creation of a single address for individual transactions. No two addresses can be pinned to a single transaction. The coins received will go to a completely different address, making the whole process unclear to outside observers.
On the other hand, ring signature refers to mixing the account key with the public key to create a “ring” of multiple signers. This means that the monitoring agent cannot link the signature to a specific account. Unlike encryption (a mathematical method of protecting encrypted items), ring signatures are not a newbie. The Weizmann Institute and MIT explored and documented its principles in a paper in 2001.
Cryptography has undoubtedly won the attention of many developers and blockchain enthusiasts, but the truth is that it is still a nascent tool with few uses. Since Monero uses the tested Ring signature technology, it has become a legitimate project worth adopting, unlike any other.
Things to know before you start trading Monero
The Monero market is similar to other cryptocurrencies. If you want to buy it, then Kraken, Poloniex and Bitfinex are some of the exchanges you can visit. Poloniex was the first company to adopt it, followed by Bitfinex, and finally Kraken.
Most of this virtual currency is linked to the US dollar or other cryptocurrencies. Some of the available pairings include XMR/USD, XMR/BTC, XMR/EUR, XMR/XBT, etc. The currency’s trading volume and liquidity have a good record.
One of the advantages of XMR is that anyone can participate in mining it as an individual or by joining a mining pool. Any computer with excellent processing power can dig out Monero blocks by hitting ero. Don’t worry about ASICS (Application Specific Integrated Circuit), which is currently essential for Bitcoin mining.
Although it is a strong cryptocurrency network, it is not that special in terms of volatility. Almost all altcoins are extremely volatile. Don’t worry about any avid traders, because this is what made them profitable in the first place-you buy when prices are falling, and you sell when prices are rising.
In January 2015, the price of XMR was US$0.25, and then slowly rose to US$60 in May 2017. The current bowling price is over US$300. Monero hit a record of $475 in ATH (highest point in history) on January 7, and then began to plunge to $300 along with other cryptocurrencies. At the time of writing, almost all decentralized currencies are in the price correction phase, and Bitcoin has fallen from its glorious ATH of $19,000 to $10-11k.
Substitution and adoption
Due to the reliable confidentiality of XMR, many people have adopted XMR so that its coins can easily replace other currencies. Simply put, Monero coins can be easily exchanged for other things.
All bitcoins in the bitcoin blockchain are recorded, so when an incident such as theft occurs, all the coins involved will be avoided, making them unconvertible. With monero, you cannot distinguish one coin from another. Therefore, no seller can reject any of them because it is related to a serious incident.
The Monero blockchain is currently one of the most popular cryptocurrencies and has a large following. Like most other blockchain projects, although the government’s repressive action is imminent, its future still looks good. As an investor, you need to conduct due diligence and research before any cryptocurrency trading. If possible, seek the help of financial experts to get on the right path.