Monero is a name known for contributing to “privacy” by all cryptocurrency lovers. Monero is the world’s most popular privacy coin that attracts its users through its untraceable transactions. In this article, we are going to cover everything about Monero and the reasons for its popularity. Stay with us.
What is Monero and how does it work?
Monero is a safe, secure, private, and untraceable privacy coin that uses a unique type of encryption for fulfilling its purposes. In a world moving toward privacy, the popularity of a coin like Monero can be predictable.
Monero uses a proof of work consensus algorithm. This means that Monero can be mined exactly like Bitcoin. Like Bitcoin, Monero has a supply cap. Its supply cap equals 18.4 million units, but it’s coded in a way that an additional 0.3 XMR is also produced every minute.
Monero is based on three underlying concepts: security, privacy, and decentralization. It provides its security and privacy using an encryption method called “Ring Signatures”. Ring Signatures don’t let the recipient and the sender be known to the public. More accurately, Monero users can choose the addresses that can see their transactions.
Ring Signatures actually mix different signatures and this way, they prevent the signatures from being known or differentiated. Let’s clarify this issue using examples. Imagine that Alice wants to send 1,000 XMR to Bob. To do so, Alice first has to determine its “ring size”. Ring size refers to the number of accidental outputs that equals the size of the output, here 1,000 XMR. The bigger the ring size, the bigger the transaction and the higher the fee. Alice signs these outputs using her “private spend key” and then sends the transaction to the blockchain.
Imagine that Alice had chosen 4 outputs. This way, Alice’s transaction gets mixed with 4 other outputs, and this confuses the third person who is observing the transactions. However, the recipient can differentiate the transaction using the special key he/she owns.
So, up to now, we figured out that it’s possible to hide the sender and the recipient. But the question is, is it also possible to hide the amount of the transaction? The answer is: yes. Before 2017, the amount of Monero’s transactions was not hidden, but after a new innovation called Ring Confidential Transactions, this also became possible. So, we can now call Monero a real “privacy coin”.
XMR token; price history
At the time of writing, each XMR is being traded at $187. This coin’s price in the bullish market of late 2017 and early 2018 reached $500. Monero has had a significant price increase in its lifetime. Monero’s supply cap, as we mentioned earlier, is 18.4 million units. At the time of writing, more than 18.1 million units have been mined. After all XMR units get mined, 0.3 XMR will be produced each minute. This is done to create a set amount of annual inflation, compensate for the lost coins, and incentivize the miners to secure the network.
Like all other cryptocurrencies, you need digital wallets to store XMR. Some of the best Monero wallets include:
• Monero’s official desktop wallet
• Cake Wallet
In this article, we went through the world’s most famous privacy coin and reviewed its features, functions, token, and wallets. Monero is secure, private, safe, and appropriate for those users who value their privacy. Some critics claim that a cryptocurrency like Monero is also appropriate for criminals who want their transactions to be untraceable, and this may also be correct. Don’t forget that the transactions of a cryptocurrency like Bitcoin are NOT untraceable. There is a common misbelief that when you buy Bitcoin is also a privacy coin, but this is not true. Bitcoin and other cryptocurrencies’ transactions can be traced under certain circumstances. This can make privacy coins more vulnerable to regulations.