One of the basic rules of blockchain technology is to provide users with unwavering privacy. Bitcoin, as the first ever decentralized cryptocurrency, relied on this premise to be marketed to a wider audience that then needed a virtual currency free from government interference.
Unfortunately, along the way, Bitcoin has been shown to have several weaknesses including incompatibility and a variable blockchain. All transactions and addresses are entered on the blockchain, which makes it easier for everyone to connect points and reveal private user data based on their existing records. Some governmental and non-governmental agencies already use blockchain analytics to read data on the Bitcoin platform.
Such shortcomings have led developers to look 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 solo transaction. Two addresses cannot be pinned for one transaction. The received coins go to a completely different address, making the whole process unclear to an outside observer.
A 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 tracking agent cannot associate a signature with a specific order. Unlike cryptography (mathematical methods of securing crypto projects), a ring signature is not new 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 developers and blockchain enthusiasts, but the truth is that it is still an emerging tool with several uses. Since Monero uses the already tested Ring signature technology, it stood out as a legitimate project worth adopting.
Things you need to know before you start trading Monera
The Monero market is similar to the market for other cryptocurrencies. If you want to buy it, Kraken, Poloniex and Bitfinex are some of the exchanges to visit. Poloniex was the first to adopt it, then Bitfinex and finally Kraken.
This virtual currency seems mostly pegged to the dollar or to other cryptocurrencies. Some of the available pairs include XMR / USD, XMR / BTC, XMR / EUR, XMR / XBT and more. The volume of trade and liquidity of this currency record very good statistics.
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 significantly good processing power can mine Monero blocks with a few hiccups. Don’t bother going to ASICS (application-specific integrated circuits) that are currently required for Bitcoin mining.
Despite the fact that it is a frightening network of cryptocurrencies, it is not so special when it comes to volatility. Almost all altcoins are extremely volatile. This should not worry any passionate trader because this factor is what makes them profitable in the first place – you buy when prices are falling and sell when they are on an upward trend.
In January 2015, XMR went for $ 0.25, then ran up to $ 60 in May 2017 and is currently a ball above the $ 300 limit. On January 7, the Monero coin recorded its ATH (most of all time) of $ 475 before falling along with other cryptocurrencies to $ 300. At the time of writing, virtually all decentralized currencies are in the price correction phase, and Bitcoin fluctuates between $ 10-11 thousand compared to the magnificent $ 19,000 ATH.
Interchangeability and adoption
Thanks to its ability to offer reliable privacy, XMR has been adopted by many people who have easily exchanged their coins for other currencies. Simply put, Monero can easily be mistaken for something else.
All Bitcoins in the Bitcoin Blockchain are recorded, and therefore, when an incident like theft occurs, every coin involved will be avoided from work, making it irreplaceable. You can’t tell one coin from another. Therefore, no vendor can refuse any of them because it is related 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, his future looks bright, despite looming government coups. As an investor, you need to do your due diligence and research before trading any cryptocurrency. Where possible, seek help from financial experts to get you on the right track.