Monero (XMR) for Beginners
The rise in popularity of cryptocurrencies has increased recruits who want to become potential investors. The creation of Bitcoin brought with it a dynamo effect. This previously untapped market has led to the creation of hundreds of available crypto coins today, including Monero.
Despite the recent market slump that Bitcoin and other cryptocurrencies have experienced due to the state of the current global economy, Monero continues to shine. Even when the market crashes, Monero always finds a way to bounce back from the downfall. Most analysts have predicted a steady increase in the coin’s market value by the end year and in five years.
While this brings an added boost of confidence for investors looking into Monero, this advice should be taken cautiously. This is because cryptocurrencies tend to be volatile and are easily affected by demand and supply in the market.
What Is Monero
Monero, the Esperanto word for money, is a crypto coin valued for its privacy and anonymity features by its market. The blockchain that makes up Monero is a decentralised and privacy-focused cryptocurrency that provides an unmatched level of anonymity, unlikability, and untraceability protection to all its users. In simple terms, the blockchain protects its users by ensuring no two Monero transaction records can be traced, neither the source nor the destination. This is Monero’s brand.
Privacy is assured by obscuring data, knowledge, and information about Monero investors, including expertise on senders, receivers, and the amount transacted. Monero uses its blockchains to track the movement of funds. However, this is as far as you can get with your level of exposure to traceability. This is because Monero employs clever cryptography to conceal the transaction process’s source, amount, and destination.
Transactions made while using Monero’s blockchain cannot be linked to a specific user or the identity of any natural person in the world. While this proves to be an advantage to those parties who face censorship regulations, there are some ethical concerns that have brought about a heated debate. Some people argue that this anonymity could create a criminal hub within Monero that allows terrorists and other types of criminals to fund their activities without a trace.
The History of Monero
Learning the history of Monero involves acquainting yourself with its digital parent currency, the Bytecoin. Bytecoin was the first privacy coin created using CryptoNote technology in 2012. CryptoNote technology is an open-source code developed to address Bitcoin’s weaknesses. These weaknesses were ASIC mining and the lack of transaction privacy.
Currently, most of the world’s best-known privacy coins, including Monero, were created using this technology as its backbone. When Bytecoin presented several issues with its distribution process, its developers decided to fork it into a new currency known then as BitMonero.
The group of developers made up of seven individuals launched BitMonero in April of 2014 and later changed the name to Monero. During its early days, this privacy coin was not well received by its community because it lacked some features that were expected to be part of its code. These features include an enhanced block system and a block reward feature. This caused the community to take the initiative to make improvements independently.
The team of developers responsible for the conception of Monero consists of seven members, five of whom have decided to keep their identities a secret from the public. The other two developers, however, are well-known individuals. They include Riccardo Spagni – the current leading developer, and David Latapie. Other team members go by Smooth, Othe, NoodleDoodle, binaryFate, and luigi1111. When they decided to work on Monero, the cryptocurrency industry was not as popular as it is. Their ambition then was purely fueled by curiosity and the need to fill a gap in the market. The original Monero development team hasn’t changed much since 2014, aside from the fact that Riccardo is the only one currently maintaining Monero’s code.
Since cryptocurrency was merely an experiment, Monero was initially used as a means of cashless transactions for making payments through the DarkNet and experimental transactions. However, the demand for private coins was not only for criminal activities. Some people simply wanted a means to store money anonymously.
Monero’s Working Principle
When cryptocurrency first started, most people assumed that transactions would be private and protected. However, as evidenced by the nature of Bitcoin, this is not always so. While Bitcoin claims that the address on their BTC and the transactions are not linked to a specific individual’s account, using exchanges and Bitcoin wallets can jeopardize your identity. Furthermore, because all transaction activities on the Bitcoin blockchain are easily traceable by almost anyone, very little investigative work may be all that is required to identify the owner of a specific address.
Unlike BTC – the Bitcoin exchange currency, no two XMR (the Monero coin) coins are alike. For instance, in Bitcoin, each BTC coin can be traced back to the point it was first developed as a mining reward. This can also be referred to as a coinbase transaction. Because of this, if a BTC coin used for some illegal activity lands in your crypto wallet, you might find yourself in a law enforcement agency’s crosshair. As a result, prices for freshly mined Bitcoins may differ from those for “used” Bitcoins.
Why Was Monero Invented
Crypto trading using Montero is meant to be a unique experience. The developers who first came up with Monero allege that since its blockchain is decentralised, you are not required to hand over control of the safe keeping of your XMR coins to a third party. The techniques used for obfuscation can be trusted to conceal the roots of a transaction, along with its worth and intended destination. For example, the Ring Signature transaction strategy involves a group of users who are used to validate a triggered transaction process in a way that makes it technologically impossible to ascertain the transaction’s origin.
Monero was invented to address a problem in the crypto market. It aimed to fill the gaping desire for absolute privacy and anonymity. Most cryptos weren’t providing this kind of service to their consumers, and the ones that claimed to do it didn’t protect them all the way. However, since Monero’s creation in 2014, it has managed to deliver on its promise to the market.
When it was first launched, no other digital currency offered the luxury of an untraceable transaction process. However, Monero has since become a trendsetter in the world of crypto by influencing other cryptocurrency developers to follow in the footsteps of its innovative features.
Monero was designed to be a currency that exists separately from influential forces in the market, such as central banks like the Federal Reserve and government regulatory agencies. One of the biggest concerns directed at fiat money systems is the lack of transparency in their conception and valuation. Monero’s value today is determined by market forces such as demand and supply and other global economic factors.
Aside from offering untraceability, other services by Monero as a digital currency include the following:
- As a means of exchange for the purchase and sale of goods and services
- In digital currency, online markets that allow for the buying and selling of digital assets
- Integration into digital wallets which permit instant online payments
How Does Monero Work
It’s impossible to talk about how Monero works without recognizing its privacy strategies. The developers who came up with Monero’s code added two more designs to complement the CryptoNote technology to ensure a highly secure and untraceable transaction process.
The Ring Signature involves a group/ ring of potential signers created by the user’s account that authorise a transaction without the likelihood of an outside party detecting who the ‘real ’sender is.
On the other hand, Stealth Addresses involve a sender generating a completely random single-use address for each transaction process. This ensures that only the parties to the transaction are aware of the final destination of the special payment.
Monero might be one of the lesser-known types of digital currency, but its value in the market is unmatched. If you are looking for an investment platform that guarantees your safety and anonymity, then Monero would be the best recommendation. However, before investing in this crypto, ensure you are equipped with all the information pertaining to online trading.
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