What is Monero?
Monero is a secure, private, and untraceable cryptocurrency. It is open source and freely accessible to all. Transactions are confirmed by distributed consensus and then immutably recorded on the blockchain which prevents third-party intervention.
Monero is different in the sense that every transaction is private. Monero hides the sender, amount, transaction broadcast, and receiver with ring signatures, RingCT, Kovri, and stealth addresses, respectively. By default, every transaction on the Monero blockchain untraceable and unable to be linked to any user.
However, you can provide a certain key to someone to let them understand what is happening. Coins such as Bitcoin (BTC), TRON, or Litecoin, have transparent systems in which merchants or individuals would hope the funds weren’t used for illicit reasons especially if they are using privacy features to hide information.
With Monero, merchants and users of the coin can receive these funds without fearing the source of the funds. Merchants also don’t want or need their vendors known and individually don’t want everyone to know how much they are spending.
That is the current problem for mainly merchants using other coins for payment. With Monero, accounts and transactions are kept private from unwanted eyes.
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- Great community. Most of the Monero community members think very critically of the project. On Reddit, the vibrant community discuss technicalities on Monero weekly. The Monero community as a whole is set on growth and they are constantly trying to improve their system.
- Research lab. Several researchers dedicate their time to research projects for Monero. Combined with their team, they have an excellent team for the continuing development of Monero.
- Fair launch. There was no ICO. Currently, many ICO’s are trying to raise a ton of money in the beginning of their launch. This raises a bunch of reg flags and causes uncertainty in the coin. There is also no governing corporation or developer tax. Monero is a very community-based project.
- Accessible mining algorithm. Monero’s mining algorithm (CryptoNight) is memory-intensive and the reward of developing specialized equipment is outweighed by the cost of developing it. Many people use GPUs although users can still mine Monero on a CPU and make some money. This lower entry barrier allows new miners to easily contribute to the community.
- Keys to provide transparency. Monero’s privacy is always on for every user except those who are allowed to see certain transaction info. Even though information on the blockchain is always obfuscated, the option is there to allow transaction information to be seen.
- Aggressive upgrade schedule. There were 3 hard forks in 2017 alone. Hardforks are necessary to implement newer, higher levels of security and privacy within the Monero network. (Verge, Monero’s competitor, has failed to upgrade and develop several times according to their roadmap.)
- Dynamic block size and fees. The amount of transactions that fit into a block increase and decreased based on the amount of transaction’s taking place on the blockchain. The fees also scale based on the amount of transactions taking place; the more transaction, the less fees paid and vice versa.
- Default privacy. Best feature of them all and why Monero is so unique. Every transaction will be private by default. Other alt coin users transacting in transparent space look suspicious for using privacy features which result in uncertainty of funds and prior usage.
- Mining centralization. A large proportion of Monero mining is consumed by 4 large pools, with France controlling over 25% of the hashrate and over 80% of the miners. Mining decentralization is a very important aspect regarding cryptocurrency.
- Large transactions. Monero transactions are significantly larger than other cryptos because the amount of encryption involved.
- Scaling Issues. As of now there are no real solutions. It’s very likely that scaling solutions will be ready for Monero in the future and maybe the lightning network could be implemented in XMR.
Pro and Con
- Anonymity. While this feature may be great and useful, is there a chance government could legislate that all major exchanges de-list currencies that can be used for anonymity? In contrast, some governments might see it as good business to allow merchants to use the currency.
Where to buy Monero?
*NOTE* If you are looking for a cryptocurrency exchange providing the best crypto-to-crypto rates on the market, check out Changelly. Note that exchange times may vary depending on network congestion.
Monero brings a very unique, but important aspect to the crypto community. Many people take their privacy seriously, and anonymity is a very large prospect for users. In a world where digital information is becoming the norm, there needs to be a secure and private way to relay information while protecting the identity of the individuals involved. Monero has made its position within the crypto network and will continue to grow (and hopefully be become more adopted) in the future.