It’s no surprise cryptocurrencies are growing in popularity more than ever. These are the digital currencies (Bitcoin, Ethereum, Litecoin) that are decentralized. They can be traded or sold through blockchain technology. Most cryptocurrencies have aimed to improve privacy, security and anonymity. However, the success factor may vary from one to another. For example, X person can view the transactions of Y person. While in other cryptocurrencies, X person cannot view the transactions of Y person, every transaction is saved privately. And still, there are few digital currencies that keep the privacy functionality strictly implicit.
While people discuss cryptocurrencies, they usually talk about Bitcoin. It is a popular cryptocurrency that uses P2P technology to process transactions with the coin. But, there is another cryptocurrency that has gained popularity and a high level of recognition. The cryptocurrency – Monero. XMR became popular, especially for “privacy-oriented” functionality.
If you’re unaware of Monero, this article is for you. Get complete information about what Monero is, unique features, working model and a lot more.
Let’s dive into the Monero cryptocurrency world!
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What is Monero (XMR)?
Monero (XMR) is a popular and leading cryptocurrency. It is purely focused on both private and censorship-resistant transactions. Simply put, Monero is the open-source, peer-to-peer and privacy-oriented cryptocurrency introduced by Nicolas van Saberhagen in 2014.
As mentioned above, people can easily find the transaction details, history and other information of Bitcoin and Ethereum. It means user privacy is at high risk.
Monero (XMR) is here to rescue. XMR cryptocurrency uses several privacy-enhancing technologies and strategies to secure the anonymity of its users. Observers can’t decipher transaction amount, history, block height and other details.
The Monero team say “privacy”, “safety” and “security” are the top priorities. Efficiency and ease of use are the next priority. Monero’s (XMR) goal is to provide privacy to every user irrespective of how technologically skilled. Plus, the cryptocurrency Monero aims to allow transactions to be performed quickly and inexpensively.
Who are the founders of Monero (XMR)?
Nicolas van Saberhagen launched Monero (XMR) in 2014. According to the analysis, there are seven developers who are involved in the Monero creation process. Among them, five had remained anonymous. Also, there are rumours spreading around the world that Monero (XMR) was introduced by Bitcoin inventor – Satoshi Nakamoto.
Monero’s origins can be easily traced back to Bytecoin. It was a privacy-focused cryptocurrency introduced in 2012. After two years i.e 2014, Bitcointalk forum member – thankful_for_today has developed a BitMonero, this coin has coded according to the ideas (electronic cash, privacy and more). But other forum members had disagreed with thankful_for_today’s invention for BitMonero. Later, he forked BitMonero in 2014 to introduce Monero. Thankful_for_today and Van Saberhagen have remained anonymous.
People believe that hundreds of professional developers have contributed their services to the Monero (XMR) invention over the years.
What makes Monero (XMR) unique?
Privacy
Privacy is the top feature of Monero. Also, the value of Monero is increasing drastically due to its privacy functionality. All the information is safe and secure. No observer or hacker can link to Monero transactions.
The privacy feature is making Monero a favourite cryptocurrency for the one who is worried about privacy for multiple reasons.
Fungibility
Fungibility is a key property of money. Keeping it simple, fungibility states that two parties can be able to exchange an equal amount or value.
Example – 1XMR for 1XMR
Both the parties will receive an equal amount. No party will lose out on money.
Monero (XMR) cryptocurrency is fungible. With advanced privacy functionalities, there is no way to link your transactions or trace your history of any individual Monero (XMR). No transaction history details are associated with any of the Monero coins. Hence, XMR coins are fungible.
Scalability
Monero offers dynamic scalability functionality to its users. When compared to Bitcoin, Monero has an improved version of dynamic scalability. Simply put, the term scalability includes how well the decentralized network can increase in relation to demand. Other crypto’s such as Bitcoin is limited in size. Monero work is a different way. The block size is limitless in XMR.
The Monero team has introduced the “Block Reward-Penalty System”. The median size of the blocks is 100. When a miner wants to add a new block, the block reward will get reduced.
How many Monero (XMR) coins are there in circulation?
Currently, there are 17 million Monero (XMR) coins in circulation. The total supply of XMR will reach 18.4 million in May 2022. At this moment, there is no maximum supply for Monero.
All the XMR coins are issued to the users or miners to incentivize them. This way, miners can provide immense support to the network.
The block rewards in Bitcoin can drop to zero. This is not the case in Monero’s block reward system. It means, miners will never drop their rewards to zero. Instead, miners will constantly decrease till tail emission commences in May 2021. At that moment, rewards are fixed i.e 0.6 Monero per block.
As per analysis, there are 432 Monero (XMR) coins created every day. Anyways, miners require an incentive to mine. As mentioned above, Monero offers dynamic scalability, competition between every miner will decrease due to less cost. When mining is expensive, miners will stop mining and this could be the reason they reduce the security of the decentralized networks.
Monero (XMR) was released in the market without pre-mine or founder’s funds. On the other hand, XMR has the highest market cap when compared to other privacy coins. The highest Monero coin value was 351.64 USD on 8th Jan 2018. The current XMR price is $262.87. The amount of transactions is increasing day by day.
How does Monero (XMR) work?
Monero (XMR) is popular for privacy and anonymity. In order to offer these two functionalities, Monero (XMR) relies on two key concepts i.e
- Stealth addresses
- Ring signatures
Stealth addresses
Stealth addresses play a vital role in Monero’s inherent privacy. It enables a sender to create a random one-time public address for an individual transaction on behalf of the recipient. However, the recipient can use a single public address for getting their transactions. This process could be similar to Bitcoin. With a stealth address, the sender and receiver can decide where their transaction was sent.
Every Monero (XMR) user can generate two keys
- Private view key
- Public view key
The private view key is used to view all the transactions that are associated with an individual account. On the other hand, the private spend key is used to send transactions or authorize transactions.
Ring signatures
In cryptography terminology, a ring signature is one of the popular types of digital signatures.
Ring signature can be signed by any one of the specific groups of user’s with private keys. Whenever a user performs a Monero transaction, the Monero Wallet creates a ring out of the remaining user’s keys extracted from the blockchain. For observers, it is highly impossible to say whose key was used to sign. Also, the transaction history and other details remained anonymous.
Monero (XMR) introduced “RingCT” – Ring Confidential Transactions in January 2017. The ultimate goal of RingCT is to hide the number of transactions.
Wrapping up
It’s a well-known truth that transactions performed on Bitcoin, Ethereum and other cryptocurrencies can be verified by anyone around the world. With block height, address and hashID, everyone can trace the transaction information. The address of the sender or receiver could be linked to the identities of the real world. Ultimately, user data is at high risk. With privacy-enhancing techniques, Monero offers privacy. Everyone is anonymous by default in XMR. Monero is a leading e-cash that allows secure and confidential transactions to and from anywhere around the world. Nobody can trace the transactions or see the history on the Monero (XMR).
