Do you want a mysterious touch in your crypto portfolio

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Authored by: @hetty-rowan

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Anonymity

Today we are going to take a look at a crypto that is praised by many for its anonymity! And because of that, many people have a clear opinion about this crypto. It would be the crypto for criminals par excellence, but is that the case?

Is Monero (XMR) mainly used in the criminal world?

And if that were the case, what is the reason for that? In short, today we're going to take a closer look at Monero!

Monero is still young!

The coin was launched in 2014 and is therefore relatively young compared to Bitcoin and XRP, for example. Monero has a completely different approach than Bitcoin, for example, and should therefore not be called an Altcoin. Altcoins are derived from the Bitoin protocol and Monero seems to be opposed to that.

Now I'm learning something new here because I actually seriously thought that every other coin than Bitcoin was called an Altcoin, but officially it turns out that this is not the case. Had any of you heard this before?

Not Ethereum either

Well okay, on with Monero. The coin is therefore NOT derived from Bitcoin. But Monero doesn't look like Ethereum, for example. Ethereum mainly focuses on the transactions, and that is not what Monero does. Like Bitcoin, Monero really focuses on the currency again. Hmmm, a mysterious coin that Monero.

100% anonymous transactions

And that is where a keyword of Monero has been found. Mysterious! You can also change Mysterious to Anonymity. And that's where Monero is champion. They say they offer you 100% anonymity. Of course, this also leads to the insinuation that Monero is mainly used by criminals. After all, it suits them very well to be able to do 100% anonymous transactions, much more so if it suits you and me to remain anonymous.

How do they offer this?

But how can Monero offer that 100% anonymity. I mean, after all, it is a blockchain that just records every transaction. Just like Bitcoin, just like Ethereum. How can Monero do that 100% anonymously? Where with the big giant Bitcoin you can see from and to which wallet the transaction is sent / sent, with Monero this has been made impossible by using 3 techniques.

  • Ring signatures: hide the identity of the sender (payer) of the transaction
  • Ring confidential transactions (RingCT): hides the amount of the transaction
  • Stealth addresses: hides the recipient's identity

Protect your data with technology

As you can see, with Monero the transactions are simply stored in the blockchain, just like with Bitcoin, but Monero protects all data through their technology. And also makes it impossible to conduct transparent transactions. In principle, everyone can see the transactions with Bitcoin, but not with Monero. A small, yet very big difference!

Monero is also 100% DECENTRAL

While Bitcoin claims to be 100% decentralized, in practice the person with the largest wallet can still control the market. And those with the largest wallet can easily acquire more because they can buy the best equipment to mine. And we all know, mining yields more coins, and therefore more power. How decentralized is that if you look at it this way? Now I think that there is more to play here because the longer Bitcoin exists, the longer the influence of the big whales is, in my opinion, less and less now that Bitcoin is more and more distributed and ends up in more different wallets. And the more people own Bitcoin and thus directly / indirectly interfere with the market, the less influence the whales will be in my opinion. Although practice will have to show whether my suspicion is correct. In any case, the fact is that Bitcoin is maturing. And Monero can still be called very young.

Everyone is equal

It is therefore good that Monero works with the principle that everyone who owns Monero is equal! Whether you own a lot or little Monero. That does not matter, no distinction is made. And mining Monero can be done with any normal PC, Monero wants to keep it that way!

Scalability

Here we go again. We all know that Bitcoin and Ethereum suffer from scalability issues. I'm not even going to write anything more about what would be necessary to fix these problems. We're talking Monero here, and hey, bingo! Monero does not have these scalability problems! This is because there is a dynamic limit on the block size in the Monero network. So this automatically adjusts when necessary. However, maximum growth is possible at a time, which prevents a sudden enormous growth spurt that cannot be kept up (properly).

EVEN MORE BENEFITS OF MONERO

Besides the aforementioned unique points of this coin, there are even more advantages over the competitor. These are usually consequences of the above characteristics.

    1. It is replaceable
      All amounts with the same value are equal, so whether you have 1x 10 XMR, or 2x 5, it does not matter at all. Also, as a recipient, you don't have to be afraid of "receive dirty coins". Because all transactions are protected you cannot check this, Monero says you don't have to worry about that.
    1. There is a fixed fee for mining
      With Bitcoin, among others, the fee for mining goes down per so many transactions (it is always halved). The more mined, the less this yields. And while mining is getting heavier and the equipment used is getting faster and more specialized, and therefore more expensive.

Disinflation

Monero uses disinflation. So over time less is paid to miners, but this goes down very slowly. Also, a minimum of 0.3XMR will always be paid out, where with Bitcoin it will stop completely after a certain number of coins. In that sense, Monero is just a bit more interesting, especially because it is newer and so a lot of coins have to be mined before we reach the point of 0.3XMR. The intention is that up to the year 2022 more than 18 million coins will be mined, then an inflation of 1% per year is expected until then.

    1. The currency will retain its value in the coming years
      Because it is already pretty much clear how many coins will be mined, and that there will be inflation, you can assume that the currency will be scarce for the time being. This ensures a certain value retention, and perhaps even an increase in value. So getting in now can be interesting, especially now that Bitcoin transactions only seem to get more expensive.

Is Monero better than Bitcoin?

From the whole story it seems like Monero is a much better coin than Bitcoin, for example. But is that image justified? In general, yes, but there are also a few lesser points to mention.

Most important here is compatibility, or rather, the lack of that! Monero has set up a very strong and good platform of its own, but is therefore in principle not compatible with any other (crypto) currencies. Fortunately, there are solutions (brokers) for this so that you can still pay with XMR to Bitcoin recipients, and vice versa.

Because Monero works with its own developed, completely new platform, it also means that this has to be built from scratch. The network must also start from scratch and cannot build on existing techniques. On the other hand: you can already start mining with a simple PC and this will not change, plus there are other big advantages to the platform, so whether this change is so bad ...

The last point I want to mention here is that Monero is only a digital currency, and therefore not a payment network, like XRP, for example, (I do not know whether that is currently very strong with all things that currently play with SEC, but that is another story). Incidentally, Monero does not pretend to be a payment network.

However, you can also pay with this currency quickly, cheaply and above all safely anonymously. And we should not want to make more of it, after all, that is not the purpose of this coin!

So for those who want to remain 100% anonymous, and want a mysterious touch in their life with cryptocurrency ... Monero might be for you!


As always… This is NOT financial advice! Do your own research!



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26 comments
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I read somewhere recently that the SEC was going after these privacy coins and why certain exchanges are removing them. Secrecy is great for certain business deals and can understand the popularity of that. Worth following what happens as Bittrex was due to remove theirs this week.

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I'm very curious too what is going to happen ... not only with XRP and maybe Monero, but also Zcash and a few others.

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Monero and other type of privacy-focused coins have their place in the crypto sphere and I believe it doesn't matter if SEC is trying to shut them down. There are so mant reasons why people would want to do transaction anonymously. Heck more people would want to do it if they understood how much information all your card transactions are giving away and how it's used to manipulate us.

Monero is a solid project and have a good use case, so I think it's a good investment in the long run :)

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Of course, I think it's a great thing to have anonymous transactions, and because the transactions are really anonymous they are in trouble now. It is becoming increasingly clear that all governments are after control and regulation. Exactly that thing we don't want to see it happening to cryptocurrencies. But we can only wait and see what is going to happen.

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Monero is a very interesting coin. Due to it's privacy it can be used for a lot of things, also for vices, that nobody wants to have on their track record. It gives a sense of freedom, like the banknotes as this are also untraceable, but with the benefit of being a blockchain token.

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Monero is very interesting yes. And not only because of the privacy, but to me it's also an interesting coin because of the way they handle the miners fees for example. The "everyone is equal" idea is appealing to me too!

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I think it’s great that it’s private, but that’s what also makes it the biggest target for regulators...

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Yup at this moment that's for sure ... we can only wait and see what is going to happen. But it's one of the biggest advantages to me. I don't need control and regulation from governments ...

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You still need an off ramp for fiat so they get you there

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When I was first starting to get into cryptocurrency I was looking really hard at Monero and Cardano. I ended up not buying either of them, but I really did like what they had going on and the potential of the two. Hopefully some of these new attacks that are happening against XRP won't carry over to Monero. Privacy is important.

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Cardano is also an interesting coin and doing good in at this moment. It's down now with all the other coins, but in the last week Cardano had some serious gains. We have to wait and see what the future will bring for Monero, but I feel it's a strong coin, not as much users as Bitcoin has, but still I think Monero is strong enough to survive.

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I agree, the fact that they have been around for three years like many of the other majors speaks volumes in my opinion.

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That's funny, I had the same experience when I bought some alt coins in 2018. I finally bought ADA and XMR 2 years later !
You can expect regulators to hit hard on those but doesn't mean it will make them weaker, quite the opposite I hope.

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I agree, simply being looked down upon by the SEC won't be the nail in the coffin as long as there is a use case. The fact that people have been using and holding these coins without regulation is a good indicator they won't stop with regulation.

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Absolutely !
Regulators have to squeeze people as hard as they can without scaring them away.
One powerful use case I see is coming from regulators messing up and people would run towards those anonymous coins.

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Monero is an excellent coin and certainly among the best privacy coins.

However, there is an unknown about possible proceedings by the SEC, after the Ripple case. The US government would like data on exchanges to be accessible to regulators and this would clash with Monero, Zcash and other privacy coins.

Bittrex for example announced their delisting just this week

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It sure is ... Yeah, the XRP case is something to watch very closely, and we can only hope that it won't jump over to Monero. Governments all around the world are trying to get a grip at cryptocurrencies. Control it, and regulate it ... Unfortunately! But again, only time can tell. I think crypto is not to be controlled or regulated. We'll see.

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Another good explaining article about crypto. I like these series of cryptos. Keep on going!
Can't wait till the next is coming up;)

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Thank you for your reply and compliment. Enough cryptos to keep me going for a while. Lol ... Next week, you'll see what's going to be next one. 😁

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Very interesting coin. I will follow along and see how it fares in a few years. It may take a while to see how the mining degrades over time and it's impact might be lessened by the new people entering for privacy reasons.

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Monero is still young, only since 2014. So yeah, it has to mature when you compare it to Bitcoin. Much will depend on the team behind Monero, if they can keep innovating their blockchain and keep their users interested. Other than that, it will depend on the market, and of course the users. Also the privacy things that are happening now with XRP can have an influence on Monero too. But for now, I have faith in the future of Monero.

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(Edited)

Are you not afraid that XMR will end up being delisted from all major exchages as it is anonymous transactions and the SEC doesn't like that?

I think that sooner or later they will start to pressure the exchanges to delist cryptocurrencies related to anonymity.

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Great insight. I always thought it was funny that the hackers were asking for their ransomware to be paid in bitcoin. Their is no anonymity to bitcoin that a good FBI agent can't crack. I see a big, maybe not all black, market for a truly anonymous crypto.

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Didn't know about this altcoin technicality, I though there was a King coin and the rest was plebe coins :D
This week I'll give a deeper look to other "anonymous" coins like Dash or Zcash.
Thank you for this hetty-rowan ;)

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