Monero is one of the most popular privacy-oriented cryptocurrencies on the market.
In this guide, we discuss what Monero actually is and how it’s privacy-focused efforts attract users from the surface web as well as deep web.
Additionally, we explore the most influential price-drivers of Monero and how the coin compares to Bitcoin as a decentralized digital currency.
Interested trading or buying Monero? Here are brokers and exchanges available in that offer Monero and other cryptocurrencies:
Disclaimer: Availability subject to regulations.
Between 74-89% of retail investor accounts lose money when trading CFDs.
Contents
What Is Monero?
Monero is one of the most popular cryptocurrencies in the world because of its ability to provide anonymity compared to cryptocurrencies like Bitcoin.
Whenever a transaction takes place using Bitcoin the recipient has to divulge their public address to the sender.
This allows the sender a window into the recipient’s wallet and they can see how much Bitcoin you own. On top of this, all Bitcoin transactions are recorded in the blockchain which is essentially a public ledger.
This means that if someone really wants to, they can figure out exactly how you’re spending your money. This is where Monero is different.
Monero Uses Random Addresses For Anonymous Routing
When you send funds to someone using Monero, you are not able to view the recipient’s holdings.
The coins you send are instead routed through a randomly created address used only for that transaction. The Monero ledger only records the one-time address and doesn’t link the sender or the recipient.
Monero does allow its users to give others a view of their accounts. If they share their view key then another user can view the account holdings without being able to spend any funds.
This is useful for someone who wants to give the authorities access to their account in order to audit their assets.
Monero Is Popular On The Dark Web Due To Anonymity
Monero’s focus on anonymity has gained it some notoriety due to its popularity on the dark web. That being said it is also used by many people with entirely legitimate intentions.
It helps users avoid having their purchases tracked by advertising companies. It also helps to protect individuals who might not want their spending habits to be known by less permissive governments.
Monero vs Bitcoin: Similarities And Differences
How does Monero compare to the cryptocurrency leader Bitcoin?
Compare the key differences with our head-to-head table.
| Monero (XMR) | Bitcoin (BTC) | |
|---|---|---|
| Purpose | Privacy through untraceable transactions and stealth addresses | Decentralized digital currency |
| Founded | 2014 | 2009 |
| Founder | Nicolas van Saberhagen (Pseudonym) | Satoshi Nakamoto (alias) |
| Market Cap | Over $2 billion | Over $300 billion |
| All time High | $464 (December 2017) | $19,850 (November 2020) |
| All Time Low | $0.25 (February 2015) | $0.06 (July 2010) |
| How long did it take to hit $100? | 42 months | 51 months |
| Notable Supporters | Jeff Currie (Goldman Sachs) Peter Theil (Venture capitalist) Christine Lagarde (IMF) Marc Andreessen (Early internet Pioneer) | |
| Supply Cap | 18,300,000 | 21,000,000 |
| Initial Distribution | Mining | Mining |
| Mining Method | ASIC | ASIC |
| Consensus Method | Proof-of-work | Proof-of-work |
| Network Hash Rate* | Up to 2.2 Gh/s | Up to 100 Qh/s |
| Difficulty increase | Difficulty is calculated each block | Every 2,016 Blocks |
Why Is Monero Considered Secure?
As an extra layer of security, Monero also uses the Ring signature. This scrambles the transaction of two parties with other users’ transactions.
The original transaction is then randomly moved along the list of transactions in the blockchain, making it nearly impossible to decipher where it originated.
What Else Does The Ring Signature Hide?
The ring signature also decrypts the amount of XMR sent.
It splits each transaction into multiple smaller amounts and treats each value as a separate transaction.
These are then mixed in with other transactions, making it almost impossible to identify the original operation. It should be noted that this is different than the private send technique used by Dash.
How Is Monero Mined?
Monero is mined in much the same way as other cryptocurrencies. Unlike banks or governments, which physically print currency, Monero is mined by its community.
The technology behind Monero is called a blockchain. This acts as a general ledger that tracks every transaction ever made. The Monero network verifies the balances of individual users’ wallets.
To process these transactions, Monero miners use their computers’ processing power to process new blocks. They are then rewarded with Monero.
This helps to regulate the number of coins on the network and also incentivizes users to mine new Monero.
Live Monero Price
Here’s a live Monero price chart with current and historical prices:
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What Drives the Price of Monero?
Monero shares some similarities with other cryptocurrencies.
Its price tends to follow Bitcoin and if you see BTC take on a bearish or bullish aspect then you should expect Monero to follow suit. Its value is also partially dictated by media attention as with other cryptocurrencies.
Like other cryptocurrencies, Monero is quite volatile. As such, you should expect quite dramatic ups and downs.
How Does The Dark Web Use Impact Monero Prices?
Monero’s primary price drivers are availability and usability, most notably on the dark web. When Monero was adopted as a payment method by the darknet market Alphabay it saw a huge spike in value.
If another underground trading center adopts Monero then you should expect to see a similar rise as criminals scramble to acquire currency they can trade in.
How Does The Adoption Of Monero Drive Its Price?
The value of Monero also gets a boost when accepted by conventional cryptocurrency exchanges.
When Bithump announced it was listing Monero, the cryptocurrency shot above $100 per coin as users began to trade it.
Bithump’s move gave Monero the opportunity to break into the South Korean markets which was a huge boon.
How Does Regulation Affect Monero’s Price?
Unlike other cryptocurrencies, Monero is less susceptible to the effects of regulations and attempts to enforce tax codes. Due to the use of ring signatures, it is very difficult to prove who actually owns a Monero token.
This means that certain token holders may seek to use Monero to protect their profits from taxation or to prevent states from seizing their funds should cryptocurrencies be made illegal.
The key price drivers for Monero will always be availability and regulation.
If you see either that Monero is soon to be approved on a major exchange or that the United States or the European Union are about to tighten cryptocurrency regulation, that’s the best time to buy.
How Can I Trade Monero?
See our full guide to trading Monero, or start your research with reviews of these regulated crypto brokers available in .
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Please Note: Availability subject to regulations. Cryptocurrency CFDs are not available to UK retail traders.
Further Reading
If you’ve learned enough about how Monero works and what value it offers, you can find out more about how you can buy or trade Monero in our Monero Trading Guide.
We have trading guides for other privacy-centered cryptocurrencies like:
- Zcash: How Does zk-SNARK Protect User Privacy?
- Dash: Do The InstantSend And PrivateSend Features Offer Value?
- Verge: Is This Truly A ‘TOR Level’ Privacy Coin?
Other cryptocurrency guides of current top ten coins on Commodity.com include ones on Bitcoin, Ethereum, Ripple, and Bitcoin Cash.
