One of the fundamental principles of blockchain technology is to provide users with unwavering privacy. Bitcoin as the first decentralized cryptocurrency relied on this premise to market itself to a wider audience who at the time needed a virtual currency free from government interference.
Unfortunately, along the way, Bitcoin has proven to be riddled with many vulnerabilities including its lack of scalability and the changeable blockchain. All transactions and addresses are written on the blockchain making it easy for anyone to connect points and reveal users’ private details based on their current records. Some government and non-government agencies are already using blockchain analytics to read data on the Bitcoin platform.
These flaws led developers to research alternative blockchain technologies while improving security and speed. One of these projects is Monero, usually represented by the XMR tape.
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 with anonymous addresses and ring signatures.
The hidden address refers to the creation of a single address for a single transaction. Two addresses cannot be installed in one transaction. The received coins go to a completely different address making the whole process unclear to an outside observer.
On the other hand, circular signature refers to mixing account keys with public keys thus creating a “ring” of multiple signers. This means that the monitoring agent cannot associate a signature with a specific account. Unlike cryptography (the mathematical method for securing cipher projects), ring signature is not a new kid on the block. Its principles were explored and recorded in a 2001 paper by the Weizmann Institute and the Massachusetts Institute of Technology.
Sure, cryptography has won the hearts of many developers and blockchain enthusiasts, but the truth is that it is still an emerging tool with few uses. Since Monero uses already tested Ring Signing technology, it has distinguished itself as a legitimate project worth adopting.
Things to know before starting Monero trading
The Monero market is similar to the other cryptocurrency market. If you want to buy it, Kraken, Poloniex, and Bitfinex are a few of the exchanges you can visit. Poloniex was the first to adopt it, followed by Bitfinex and finally Kraken.
This virtual currency appears 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 and liquidity of this coin score very good stats.
One of the good things about XMR is that anyone can participate in mining either as an individual or by joining a mining pool. Any computer with good processing power can mine Monero blocks with a few hiccups. Don’t bother going to ASICS (Application Integrated Circuits) which are currently mandatory for Bitcoin mining.
Although it is a formidable cryptocurrency network, it is not very distinctive when it comes to volatility. Almost all digital currencies are extremely volatile. This should not worry any avid trader as this factor is what makes it profitable in the first place – you buy when prices are low and sell when you are in an uptrend.
In January 2015, the XMR was at $ 0.25, then it made some jogging to $ 60 in May 2017 and is currently running above the $ 300 mark. The Monero coin ATH (all-time high) hit $ 475 on Jan.7 before it began declining along with the other cryptocurrencies to $ 300. At the time of writing, virtually all decentralized currencies are in the stage of a price correction with Bitcoin hovering between $ 10-11K from the glorious $ 19,000 ATH.
Innate and dependence
Thanks to its ability to provide reliable privacy, XMR has been approved by many people making its coins easily exchangeable for other currencies. In simple terms, Monero can easily be traded for something else.
All Bitcoins are registered with the Bitcoin Blockchain, thus, in the event of an accident such as theft, every coin in question will be avoided making it non-exchangeable. With monero, you cannot distinguish one currency from the other. Therefore, no seller can refuse any of them as it is related to bad accident.
The Monero blockchain is currently one of the most popular cryptocurrencies with a large number of followers. Like most other blockchain projects, its future looks great although a government crackdown looms on the horizon. As an investor, you need to do your due diligence and research before trading any cryptocurrency. Where possible, seek help from financial experts in order to get on the right path.