One of the key principles of blockchain technology is to provide users with confidential privacy. Bitcoin relied on this premise as the first decentralized cryptocurrency to market itself to a wider audience which then needed a virtual currency free from government interference.
Unfortunately, along the way, Bitcoin has proven to be fraught with a number of vulnerabilities, including unproven and variable blockchain. All transactions and addresses are written on the blockchain making it easy for anyone to connect the dots and disclose their personal details based on existing user records. Some government and non-government organizations are already using blockchain analysis to read data on the Bitcoin platform.
Such flaws have led developers to look for alternative blockchain technology with improved security and speed. One of these projects is Monero, usually represented by the XMR ticker.
What is Monero?
Monero is a privacy-based cryptocurrency project whose main goal is to provide better privacy than other blockchain ecosystems. This technology shields users’ information through stealth addresses and ring signatures.
Stealth address refers to the creation of a single address for a single transaction. No two addresses can be pinned in a single transaction. The coins received go to a completely different address so that the whole process is obscured to an external observer.
Ring signatures, on the other hand, refer to the combination of account keys with public keys thus creating a “ring” of multiple signatories. This means that a monitoring agent cannot link a signature to a specific account. Unlike cryptography (the mathematical method of securing crypto projects), the ring is not a new kid in the signature block. Its principles were explored and recorded in a 2001 study by The Weizmann Institute and MIT.
Cryptography has certainly won the hearts of many developers and blockchain fans, but the truth is, it is still a new tool with a handful of uses. Since Monero uses already tested ring signature technology, it has distinguished itself as an acceptable legitimate project.
Things to know before you start Monero trading
The market of the mind
Monero’s market is similar to other cryptocurrencies. If you want to buy it then Kraken, Polonix and Bitfinex are some of the exchanges to visit. PoloniX took it first, followed by Bitfinex and finally Kraken.
This virtual currency appears to be mostly pegged to dollars or to peer-to-peer cryptocurrencies. Some available pairs include XMR / USD, XMR / BTC, XMR / EUR, XMR / XBT and many more. The trading volume and liquidity record of this currency are very good statistics.
One of the great things about XMR is that anyone can take part in mining, either in person or by joining a mining pool. Any computer with remarkably good processing power can dig Monero blocks with some hiccups. ASICS (Application-Specified Integrated Circuit) which is currently mandatory for bitcoin mining.
Despite being a strong cryptocurrency network, it is nothing special when it comes to volatility. Virtually all altcoins are highly volatile. This should not be a concern for any interested trader as this factor makes them profitable in the first place – you buy when prices are low and sell when they are on an upward trend.
In January 2015, the XMR was going at $ 0.25 then in May 2017 some jogging made $ 60 and it is currently bowling above the 300 mark. The Monero currency hit its ATH (all-time high) of $ 475 on January 7, before hitting 300 300 with other cryptocurrencies. At the time of writing, virtually all decentralized currency is in the process of price correction.
Functionality and acceptance
Thanks to the ability to offer reliable privacy, XMR has been adopted by many people that can be easily replaced with other currencies. Simply put, Monero can easily be traded for anything else.
All bitcoins in the Bitcoin blockchain are encrypted, and therefore, when something like theft occurs, every coin involved will be prevented from being treated unchanged. With Monero, you cannot distinguish one currency from another. Therefore, no seller can reject any of them because it is associated with a bad event.
Monero blockchain is currently the most trending cryptocurrency with a significant number of followers. Like other blockchain projects, its future looks great because of government crackdowns. As an investor, you need to do your due diligence and research before trading in any cryptocurrency. Where possible, seek the help of financial experts to guide you in the right direction.