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What is Monero? Comprehensive Guide to XMR
Monero is a fully anonymous cryptocurrency. This is in contrast to Bitcoin, which only pseudo-anonymous. Monero is one of the more controversial cryptocurrencies on the market, not so much for price, or popularity reasons, but because of its focus on privacy. This is great for users who want to protect their identities but also makes it a potential vehicle for illicit activity. That said, you can still buy Monero on many popular exchanges.
Monero Pros & Cons
Pros
Monero invariably preserves the privacy of the users of the network
Monero has a strong development community
Monero wallets exist for all major operating systems and platforms
Cons
Monero is a go-to choice for organized crime
Monero makes it difficult for law enforcement to detect the identity of criminals
Larger technical barrier has advanced key management is needed
Best Exchange for Buying Monero
- Exceptionally secure exchange with proof of reserves
- Supports many different funding options
- Accepts users from across the globe including USA and Canada
- Very high trading volume
Monero Overview
Monero by default hides everything to do with a transaction, from the amounts being sent, to the two parties involved in the transaction. Monero has achieved its full anonymity through different types of cryptographic techniques than the types of cryptography that Bitcoin uses. After Monero’s initial release in 2014, several protocol upgrades have made improvements on the privacy guarantees that originally were provided by the Monero team.
Monero gets a lot of attention for being used in various internet hacks. Monero is used to collect the ransom due to its anonymous nature. Monero is also used in botnets that use infected computers machines to mine cryptocurrency.
As privacy becomes ever more scarce in the world of social media, marketing, and advertising, privacy preserving services such as the messaging app Signal, or money transfer protocols like zCash or Monero are bound to receive ever more increasing amounts of attention. This is an opinion that is shared by some of the largest names in cryptocurrency such as Coinbase CEO Brian Armstrong.
Monero Ratings
Supply
Total Supply: 17,412,830
Network speed:
Rating: Low
Transactions per second: 4tx/s
Disbursement
Rating: Unknown
Reason: Balances are hidden
Developer Engagement
Rating: High
Reason: Monero developers have created wallets for all major operating systems. Furthermore, any bugs or vulnerabilities discovered on Monero have been fixed in a timely manner.To top it all off, the Monero team regularly works on new features, either on the core protocol, or the supporting applications. this keeps the users engaged and excited to see where the core developers take the technology next.
Liquidity
Rating: High
Reason: Monero is consistently within the top 20 cryptocurrencies in the world. With many of the major exchanges offering several XMR trading pairs, you won’t have a problem with liquidity when buying and selling XMR.
How is Monero Completely Anonymous?
Monero combined several technologies to make its way of transacting completely anonymous. Monero has implemented a cryptographic technique called Ring Signatures. Technical Explanation Disclaimer: Monero bundles your transaction with a random selection of other public keys, such that any public key can be used to check the validity of the transaction, wherein only one of the corresponding private keys was actually used to produce the transaction. The ring signature ensures that it is computationally infeasible to find out which public key was used to produce the transaction.
Simply put, Monero builds plausible deniability into every transaction. There is no way to tell whether or not you participated in any given transaction.
Monero also hides the amounts that are being transacted within any given transaction. This keeps the balances of all Monero addresses hidden from public view, along with the amounts that are transacted on the network. So even if you were to be discovered using the Monero network, the amount of money that you have been transferring would still be hidden from public view.
How to Buy Monero (XMR)
Despite its status as the ultimate privacy coin, most cryptocurrency major exchanges allow you to purchase Monero. Of course you’ll likely have to go through Know Your Customer (KYC) identity verification protocols with most major exchanges, which does defeat the purpose of Monero somewhat. One potential work around KYC is to purchase something like Bitcoin or Ethereum on a major exchange and trade it for Monero on a smaller crypto-only exchange. Crypto-only exchanges generally have less KYC but of course you’ll still be leaving a paper trail at the original exchange.
Another option for buying XMR is a peer-to-peer cryptocurrency market. These markets cut out the middle man and let users deal directly with other users. It’s very important to be very careful when using P2P crypto exchanges because there is generally less security than the major exchanges. Finally you could offer to buy directly from a friend or family member if you trust them 100%.
Head on over to our guides for the following cryptocurrency exchanges if you would like to purchase Monero.
History of Monero
Monero was started in April 2014 by member of the popular Bitcoin forum bitcointalk.com. Originally BitMonero, the cryptocurrency was renamed to Monero five days after its establishment by the team of developers that formally took over the project. Monero received an upgrade in 2017 that strengthened its security and anonymity, making the amounts being transacted confidential to viewers. This means that passive observers of the blockchain could no longer see the amount of money being transacted in each transaction. This on top of Monero’s hidden account balances, and single use addresses for transactions makes Monero arguably the most secure transaction processing system ever invented.
Monero currently is rewarding miners at a rate of 2 XMR per block, or 2 XMR every 2 minutes. This boils down to 1 XMR created every minute. Monero will continue producing blocks at this sort of rate until around May 2022, when the amount of new Monero entering the system will be a constant .06 XMR per block.
Monero’s Popularity on the Dark Web
Monero was instrumental to certain organized crime movements such as the WannaCry attacks that occurred in 2017 and general dark web transactions. During WannaCry, after ransom was collected in Bitcoin, the attackers would move the funds into Monero, to further hide their identity. Monero is a popular dark web payment method, as it inherently has more privacy built into the protocol than other popular cryptocurrencies. While a careful user of Bitcoin can disguise or mask their identity, it still doesn’t come close to the level of protection gained by using the cryptographic techniques built into Monero. To this day, many dark web merchants prefer, and even insist on their patrons using Monero instead of Bitcoin for transactions.
In terms of endorsements by privacy advocates, it really doesn’t get much better than Edward Snowden himself declaring that he’s used Monero. Edward mentions that in order to securely transfer and secure the documents he released to the public in 2013, he “may” have had to use Bitcoin in order to pay for anonymous server infrastructure. Edward thinks that zCash is the most interesting cryptocurrency project out there right now due to its unique privacy aspects. had Monero or zCash been around in 2013, Edward may have found himself using these digital currencies to aid ins disclosure. This is to say that Monero being a privacy coin is often hailed by criminals and terrorists as being a safe haven for their digital presence, but sometimes there is a real need for ordinary people to protect their information and transactions online.
How Does Monero Work?
Monero uses a proof of work mining algorithm, just like Bitcoin or Ethereum. That being said, Monero is significantly different than the aforementioned cryptocurrencies. Monero is completely anonymous due to different cryptographic techniques used to disguise the identities and activities of the users of the network. These techniques are called Ring Signatures, Confidential Transactions, BulletProofs and Stealth Addresses.
The privacy implications are as follows:
- The amount transacted in any given transaction on the network is not known.
- The sender of any transaction is not known
- The receiver of any transaction is not known
- The balance of any address on Monero is not known
The above facts make it difficult for law enforcement to determine what the flow of money is on the Monero network. Traditional blockchain analytics tools are therefore unable to compile statistics about the movement of Monero on the network.
Other than the enhanced privacy mechanisms unique to Monero, transaction with this cryptocurrency is much like transaction with any other cryptocurrency. You have a wallet, which consists of a public and private key. You sign transactions with your private key, and send money to your public key. If you really would like to look at your Monero balance on an online block explorer such as xmrchain.net, you can use a special Monero key called the private view key. This could be useful when checking your Monero transactions to and from exchanges.
Monero Frequently Asked Questions
Monero is different than Bitcoin. It can be said that Monero has better privacy than Bitcoin. Monero falls short when compared to Bitcoin in terms of overall adoption and usability.
Monero is indeed based on ByteCoin, which itself being invented in 2012, is based on, or at least influenced by Bitcoin.
Yes, there have been several forks of the main Monero protocol such as Monero Classic and MoneroV. There are no forks of Monero that have gained any sort of significant use or popularity amongst the cryptocurrency community.
No one owns the Monero network. Monero is not a company, or a product, its a network of anonymous individuals. It is in a sense, co-owned by the individuals that run and participate in the network. If you’re asking who owns Monero the cryptocurrency, then it’s impossible to tell, as the network hides the balances of the addresses on the netwo
Monero has not been made explicitly illegal anywhere in the world. Many countries have put forth rulings and regulations against cryptocurrencies in general, which of course includes Monero. Due to the ability for Monero transactions to be completely hidden, many discussions have taken place at higher level security offices such as the NSA and FBI that indicate that an outright ban on privacy coins such as Monero may be something that manifests in the near future.
You can indeed mine Monero on your computer. You can either mine in a pool, or mine Monero on your own. If you would like to mine Monero, we recommend that you download MinerGate and mine Monero through their platform.
Monero has a place in currencies, simply because it provides something that no other currency does, privacy. While outright replacement of the US dollar seems unlikely for any cryptocurrency to accomplish (including Bitcoin), we see a future of interoperability where cryptocurrencies exist alongside government currencies.
Monero can be used to buy things on the internet. The best place to check where (legal) things can be bought is the getMonero website.
Monero competes for the title for being the most secure cryptocurrency, especially in terms of anonymity. Bitcoin still holds the title for having the most decentralized, and secure network.
MoneyGram does not own Monero. Monero is a cryptocurrency network, that is essentially co-run and co-owned by all the participants of the network.
Monero can be bought with Bitcoin Cash. The trading pair needs to be provided by an exchange. While this is an odd trading pair to see, ShapeShift, the exchange built into the wallet Exodus will certainly let you trade Bitcoin Cash for Monero.
