Definition of Monero
Monero is a cryptocurrency based on an open source network. It was created in April in the year 2014. It is one of those rare cryptocurrencies which puts more focus on privacy, decentralization, and fungibility. Monero uses a public ledger which means that anyone is able to broadcast or send the transactions. However, it does not allow anyone to tell the amount, destination or the source. The Monero uses a mechanism known as the Proof of Work in order to issue the new coins and offer incentives to the miners. It helps to validate and secure the transactions. The Monero is highly encouraged for people who seek financial privacy because the account balances and payments remain completely hidden. This is not standard for various major cryptocurrencies. Thus it can be said that Monero is a digital asset which makes use of the cryptography in order to secure the transactions.
The history of Monero
The Monero was created in the year 2014 in April by a different name- bitMonero. The name was however changed to just Monero just after five days of the launch. Since its launch, the currency has undergone various changes. However, the person who created the Monero still remains unknown while two members of the core development team have revealed themselves- Francisco and Riccardo Spagni. The Monero didn’t see much growth after the first two years of its launch. However, it changed around the year 2016 when a market starts to accept the cryptocurrency in order to maintain the anonymity of their users. This was a huge step in the growth of Monero and in its price during August and September in 2016. It recorded gains at 2700 percent.
The uses of Monero (XMR)
- This cryptocurrency has been criticized a lot for its involvement in illegal activities. These include the drug trade. It has often been referred to as the currency of criminals. There are plenty of legal uses for which it can be used for. Privacy and anonymity can be useful for various legal reasons. Below is the list with the uses of Monero:
- The businesses can make use of the Monero for making the purchases from the suppliers without exposing the information of the users which is potentially sensitive. This is not so with other cryptocurrencies such as Bitcoin.
- The consumers can use the Monero in order to avoid the price discrimination while purchasing the goods online by hiding and securing the financial information of the users.
- The Monero is a fungible cryptocurrency. This feature makes it more appealing for the businesses in order to accept the payments in the Monero more than the other cryptocurrencies.
The benefits of Monero
- One of its features is its great advantage and that is fungibility. It means that the value of the cryptocurrency can neither be influenced by its usage nor its source. As various other cryptocurrencies can be blacklisted. If a cryptocurrency gets stolen, it cannot be considered fungible. Since the Monero is completely untraceable, it is completely fungible as well.
- The Monero is ASIC resistant. The majority of the cryptocurrencies are mined which makes the cryptocurrencies more centralized since the supply of the cryptocurrency is controlled by the people who possess the ASIC miners. In order to prevent this, the mining process in the Monero can only be completed through the GPUs and the CPUs.
- The main selling point of the Monero is its privacy feature. Monero offers its users complete anonymity by preventing the other users from viewing their account balance. This feature is something which various major cryptocurrencies lack.
- The blockchain of the Monero has no limits. This prevents the fees from rising too much with the increase in the usage.
- Apart from the above-mentioned benefits, there are other benefits to cryptocurrency. It includes the decentralized and secure network of the cryptocurrency.
The disadvantages of Monero
- One of its features is the anonymity of the users. This feature has made it very popular in the black market. This might limit the adoption of this cryptocurrency.
- Monero has still been able to solve the issue of wrong control of the cryptocurrencies.
- There are not many wallets which support Monero because it is quite difficult to work on it than on the other cryptocurrencies.
- The Monero is not widely adopted which restricts its use.
The basic difference between Bitcoin and Monero
- The Bitcoin transactions are not directly linked to the personal information but are actually linked to the wallet of the users. While Monero keeps the financial information of the user hidden and secure.
- Monero and Bitcoin make use of completely different algorithms for the mining process.
- The network of Bitcoin can get busy and it has a maximum limit for the block size. This reduces the speed of the transactions. Whereas the limit for the block size of the Monero is adaptive. The size of the block automatically expands with the increase in the transaction volume.
The future and price of the Monero
The price of the Monero began to fall in January and the value reached 94 dollars. It was priced around 8 dollars during the end of the year 2016. However, it quickly rose as high as 400 dollars. A price hike happened in August 2017. The Monero was the thirteenth largest by market capitalization in July 2018 when the Monero trading was added to the exchange to make it easily accessible to the investors. The Monero is expected to perform better in the future because of its unique features such as privacy and anonymity.