One of the main commands of blockchain technology is to provide users with unshakable confidentiality. Bitcoin, as the first decentralized cryptocurrency of its kind, relied on this premise to be sold to a wider audience, which then needed a virtual currency free from government intervention.
Unfortunately, along the way, bitcoin proved to be rich in several weaknesses, including non-scalability and variable blockchain. All transactions and addresses are written on the blockchain, thus making it easier for everyone to connect the dots and disclose users’ personal data based on their existing records. Some governmental and non-governmental agencies already use blockchain analysis to read data on the Bitcoin platform.
Such shortcomings have led to developers looking 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 user 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 a single transaction. The received coins go to a completely different address, which makes the whole process unclear to an outside observer.
The 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), the ring’s signature is not a new child in the block. Its principles have been explored 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 tested technology to sign the Ring, it has emerged as a legitimate project that deserves to be adopted.
Things you need to know before you start trading Monero
The Monero market
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 seems mostly pegged to the dollar or to other cryptocurrencies. Some of the available pairings include XMR / USD, XMR / BTC, XMR / EUR, XMR / XBT and many more. The volume of trading and liquidity of this currency report 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 processing power can produce Monero blocks with a few hiccups. Don’t worry about going for ASICS (application-specific integrated circuits), which are currently required for digging bitcoins.
Although it is a great network for cryptocurrency, it is not so special when it comes to volatility. Virtually all altcoins are extremely unstable. This should not worry any avid trader, as this factor is what makes them profitable in the first place – buy when prices fall, and sell when they are on the rise.
In January 2015, XMR went for $ 0.25, then did a little jogging to $ 60 in May 2017 and is currently bowling over the $ 300 mark. The Monero coin recorded its ATH (all-time record) of $ 475 on January 7, before collapsing along with other cryptocurrencies to $ 300. At the time of writing, almost all decentralized currencies are in a price adjustment phase, and bitcoin is fluctuating between $ 10-11,000 from his glorious $ 19,000 ATH.
Legal capacity and adoption
Thanks to its ability to offer reliable privacy, XMR has been adopted by many people, making its coins easy to exchange for other currencies. In simple words, 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 affected 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.
Currently, the Monero blockchain is one of the most popular cryptocurrencies with a significant number of followers. Like most other blockchain projects, his future looks great, despite the government’s impending repression. As an investor, you need to do your thorough checking and research before trading any cryptocurrency. When possible, seek help from financial experts to get you on the right track.