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.
What is Monero?
Monero is one of the most popular cryptocurrencies in the world because of its ability to provide anonymity compared to say, 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 many Bitcoins 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.
Random Addresses For Anonymous Routing
If 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 into their account. 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.
A Popular Dark Web Coin: Complimentary For 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|
|Founder||Nicolas van Saberhagen (Pseudonym)||Satoshi Nakamoto (alias)|
|Market Cap||Over $6.5 billion||Over $250 billion|
|All time High||$464 (December 2017)||$19,908 (December 2017)|
|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)
|Consensus Method||Proof of work||Proof of work|
|Network Hash Rate*||Over 85 Monero per hour||Over 40 bitcoins per hour|
|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.
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 Made?
Monero is mined in much the same way as other cryptocurrencies. Unlike banks or governments, which physically print currency, Monero is made by its community.
The technology behind Monero is called a blockchain. This acts as a general ledger that tracks every transaction ever made. This allows the Monero network to verify the balances in individual users wallets.
To process these transactions users, or “miners” use their computer 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.
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 It’s Price?
The value of Monero also gets a boost when accepted by conventional cryptocurrency exchanges. When Bithump announced it was listing Monero the currency jumped above $100 as users began to trade in the altcoin.
Bithump’s move gave Monero the opportunity to break into the South Korean markets which was a huge boon.
What About Regulations?
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.
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