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Monero

What is Monero?

Monero (XMR) is an open-source cryptocurrency forked from Bytecoin, the first privacy and anonymity-focused coin that entered the market. Released in 2012, Bytecoin's primary point of difference—completely untraceable transactions on a scalable network—was so revolutionary that it has been forked 25 times since inception. Monero has proven to become one of the most successful Bytecoin hard forks, maintaining a community of users since 2014 and racking up a Monero to AUD conversion of almost $350 per coin. While there are other privacy-focused coins on the market (including Dash coin), Monero stands out by making this feature automatically built-in rather than optional. Whereas u sers can make their Dash transactions completely private through PrivateSend, there are no extra steps needed to transfer XMR while keeping the sender, receiver, and the number of coins hidden from prying eyes. Monero currently boasts the strongest security protocols among privacy coins on the market, with up to 120 bits of standard encryption. In comparison, Zcash crypto encrypts only 30 bits per transaction while another competitor called Verge offers no protection at all, making XMR one of the top players in the privacy coin niche.

History

Monero's origins can be traced back to the revolutionary technology called CryptoNote, an open-source blockchain protocol developed after a whitepaper published by an anonymous person who called themselves Nicolas van Saberhagen, who some believe shares the same identity as the elusive Satoshi Nakamoto. CryptoNote was then built by a separate team of developers and eventually became a crucial building block for shaping the future of privacy coins. From CryptoNote came the likes of Bytecoin, which some of the former's developers also worked on. And while Bytecoin was ahead of its time, it turned out to be one of the biggest scams in cryptocurrency history. Its creators kept investors in the dark about a crucial aspect of the blockchain—that 80% of the coins were pre-mined. For two years, investors believed that new BCN coins were minted through darknet mining, allowing developers to profit on massive proportions. Following disagreements concerning Bytecoin's deception, an anonymous user called thankful_for_today created a hard fork named Bitmonero. It was eventually renamed Monero and was taken over by a different team of developers after further internal conflict. This turnover was possible due to the decentralized and open-source nature of blockchain technology, which allows developers to join the project through community consensus. Since then, Monero grew in fame as one of the world's most well-known private cryptocurrencies.

The Monero Market Cap

XMR is ranked #30 by market cap—one place behind EOS currency and one place above PancakeSwap. Its position makes it a popular altcoin that isn't as widely recognized by people new to cryptocurrency but still large enough to surpass the likes of meme coin SHIBA INU and decentralised-application-builder Algorand. Moreover, with a market cap of over $4.5 billion and a 24-hour trading volume of over $164 million, Monero is relatively well-traded across the board.

Unique Features of Monero

Privacy

Monero is a powerhouse blockchain with comprehensive features that make it favorable among all kinds of investors, primarily those that value privacy above all else. An important distinction is that privacy doesn't equate to anonymity. While the concept of cryptocurrency allows for anonymous transactions, the public nature of the transaction ledger allows anyone to view records. Despite records not revealing the identities of individuals, anyone can see how much is being sent from one wallet address to another, putting wallets with large amounts of coins at risk of being attacked. Monero disallows this by ensuring the privacy and anonymity of all transactions through the following key features: 

  • Ring Signatures — when a user signs an XMR transaction, their signature is placed in a pool of other signatures from previous transactions, making it impossible for public watchers to determine which is real and which are imposters. 
  • Ring Confidential Transaction (RingCT) — this feature protects the number of coins being sent. Users can verify that the transferred coins are correct, but the public won't be able to determine the actual number. 
  • Stealth Address — the receiver's identity is protected through a one-time stealth address generated by a Monero wallet, where coins are received and spent. The blockchain tracks the XMR each user owns across all their stealth addresses, disallowing anyone from figuring out the actual wallet address.

Fungibility

Apart from repelling privacy attacks, Monero also ensures the fungibility of all coins. Cryptocurrency is, by nature, fungible, which means that one coin from person A holds the same value as one coin from person B. However, because the lifetime of a coin can be tracked from inception, any relationship it has to criminal activity can also be viewed by the public—which can potentially invalidate the value of some coins and put innocent users in trouble. Monero counters this by making the movement of coins untrackable through conventional means, retaining fungibility throughout the network.

Mining

Monero utilizes the Proof-of-Work consensus model, which traditionally uses a massive amount of resources—from energy to hardware—due to the competitive nature of the operations. Despite sharing the same mechanism as Bitcoin currency, XMR is significantly more user-friendly due to its resistance to ASIC rigs (powerful supercomputers dedicated to mining cryptocurrency), making it possible to mine with a conventional CPU. This, in turn, leads to more decentralization across the network as all Monero users can take a share of the coin's 17.98 million supply.

Network Upgrade

Monero schedules "network upgrades" to prevent confusion among users—but these are actually done in the form of hard forks. Until October 18, 2020 (when the last hard fork took place), this process was done bi-annually to ensure network stability and introduce important upgrades and fixes that were only possible through the forking strategy. However, now that the blockchain has reached a level of stability, the developers have reduced the frequency of these network upgrades to once every 9-12 months.

Monero FAQs

Who Are The Founders of Monero?

Monero was founded by an anonymous user named thankful_for_today, who forked the blockchain from Bytecoin. The project has since been taken over by developers within the crypto community.

Is The Monero Wallet Available For Android & iPhone?

The community developed two official Monero wallets: the user-friendly GUI wallet and the more complex CLI wallet made for technologically savvy individuals. The former is only accessible through desktop operating systems, such as Windows, Linux, macOS, and Source Code. The latter can be accessed through the same systems plus FreeBSD and Android ARM v7 and 8—but due to being made for developers, it's not recommended for casual use, even among investors. Instead, Monero's development team recommends using the lighter Cake Wallet for Android and iPhone and Monerujo for Android users.

What Companies Accept Monero?

A good number of companies have begun accepting XMR for goods and services over the years. The full roster can be found on Monero's website—and it includes businesses across various industries, from crypto exchanges like Kraken to PC game stores like Keys4Coins and even food delivery services like the North of Boston.

Are XMR Transactions Traceable?

Unlike Bitcoin, Monero transactions are not traceable. Instead, the transaction data is obscured through a process called "ring signatures" that make it impossible for outsiders to identify where the funds came from or who they were sent to.

Will XMR Replace BTC?

XMR and BTC are not direct competitors as they attract different kinds of investors. While some are content with Bitcoin's ecosystem, others prefer the higher-end privacy and anonymity solutions that Monero offers. As such, XMR won't be replacing BTC, and BTC won't be replacing XMR—they can both exist simultaneously without causing conflict.

Will Monero Be a Good Investment Opportunity?

The Monero price AUD remained unimpressive until the 2017 bull market, where it spiked to over $580 before dropping to $62 lows when the market crashed. However, the coin has since followed a slow but steady upward trajectory, spiking again to nearly $700 amid the 2021 bull market, beating its prior record and garnering massive investor interest. While the Monero to AUD conversion has since mellowed down to $350, experts believe that the price may go up by the end of the year, making XMR a promising investment opportunity among privacy coins.

In Which Countries is XMR Illegal?

Monero can't be used, purchased, or traded in countries that have banned cryptocurrency as a whole, including Algeria, Bolivia, and Nepal. However, XMR is specifically illegal in crypto-loving South Korea due to the Crypto AML Law, which disallows the use of privacy coins over concerns surrounding money laundering and other criminal activities.

Can I Buy Monero With PayPal?

XMR can be purchased with PayPal through LocalMonero, a platform where users can directly sell their coins to other users. However, because each seller independently sets the prices, the Monero to AUD conversion may differ from the market value.

How Can I Buy Monero With My Credit Card?

Most crypto exchanges don't sell Monero, but there are two ways you can work around this limitation. Purchase XMR directly through LocalMonero from sellers that accept credit card payments. Purchase a stablecoin, such as USDT, from an exchange like Binance and Huobi, then convert the coins to XMR with a coin swapper.

Will Monero Reach $1,000?

Nothing is set in stone for the future of cryptocurrencies—including Monero. While experts believe that the coin will grow in value over the next few years, many forecasts suggest that it may take up to a decade for the XMR price AUD to reach the $1,000 mark.

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