Monero: The True Anonymous Currency
Monero is a cryptocurrency with special properties that make it one of the most difficult currencies to trace in the world. Continue reading this guide to learn more about the history, operation and goals of this unique technology.
Monero’s context and definition
Among the thousands of cryptocurrencies developed over the past ten years, Monero stands out for its ability to anonymise your transactions. This privacy-oriented currency guarantees confidential and untraceable transactions, unlike some major cryptocurrencies like Bitcoin and Ethereum.
What is a cryptocurrency?
A cryptocurrency, or digital currency, is an online medium for making payments, that is, sending or receiving money virtually. Thanks to the blockchain, cryptocurrency can be decentralised and transparent. In addition, each transaction is immutable, meaning it cannot be refused or canceled.
What is the blockchain?
A blockchain can be described as all the transactions that have ever been carried out since the creation of its respective cryptocurrency. It is copied hundreds of thousands of times and downloaded on ‘nodes’ (electronic devices) around the world. Any electronic device, such as a computer or a mobile, can be a node if it is connected to the Internet and has an IP address. When you make a transaction using a cryptocurrency, that transaction is recorded in the blockchain, and is also recorded locally on all nodes. This process confirms the validity of your transaction, guaranteeing its permanent and immutable registration on the blockchain. You can find more information on the blockchain here.
What is Monero?
Monero is an open-source cryptocurrency (i.e. the source code is freely available/accessible) developed using the blockchain with the aim of allowing private and opaque transactions ensuring maximum confidentiality. Anyone can make a transaction using Monero, but it is impossible for an outsider to find the source, amount or destination of this transaction, meaning it offers real anonymity for the user.
Monero’s history and how it works
Monero was created in 2014 and quickly became the most popular private cryptocurrencies. It regularly ranks in the top 15 (in terms of market capitalisation) on the cryptocurrency markets.
The creation of Monero
Launched on 18th April 2014, Monero was first originally developed as BitMonero, before shortening to Monero. The word ‘monero’ literally means ‘piece’ in Esperanto.
What are Monero’s principles?
Why was Monero created?
Monero was developed to allow private transactions, unlike lots of other cryptocurrencies such as Bitcoin, which broadcast all transactions on its blockchain publicly. Monero completely hides the origin and destination of transactions, as well as the value in circulation and the contents of wallets.
How is Monero used?
Like most cryptocurrencies, Monero can be used as an exchange to make and receive paperless payments. By reusing the innate properties of blockchain technology, Monero allows transactions to be carried out without the necessary authorisation, and are irreversible. Monero distinguishes itself thanks to its very high level of confidentiality from which you can benefit.
Monero can also be mined relatively easily using normal computer components, not necessarily requiring the purchase of expensive systems to participate in mining. Mining consists of verifying the validity of a transaction by encrypting the information that is then recorded on the blockchain.
What are Monero’s goals?
By choosing Monero, you will be able to:
- Perform transactions completely confidentially
- Participate in the mining of cryptocurrency using standard equipment
Where and how to buy XMR?
Monero can be purchased on the many cryptocurrency exchange platforms. You’ll find some of the best liquidity on the likes of Binance and Bidesk but you can also buy XMR on Kraken.
The advantage of Kraken is that you can buy XMR using fiat currencies, however, unfortunately for us Brits you can only do so using euros or dollars.
On the other platforms, however, you will first need to acquire one of the cryptocurrencies listed on the exchange’s available pairs, i.e. BTC or USDT, and then convert it into XMR. Beware of the additional costs that you might have to pay because you are making two transactions. The good news is that the three aforementioned platforms all have relatively low fees.
Whichever platform you choose, it is highly advisable to then transfer your XMR to a cryptocurrency wallet so that it can be anonymised and stored securely.
Why invest in Monero?
Monero is one of the most recognised and respected cryptocurrencies on the market. It exists for a very specific purpose: to offer the maximum level of confidentiality for its users. Here are the benefits and risks of investing in this technology.
The pros of buying Monero
Since its creation, the value of Monero has seen lows of under 15 pence to an ATH (all time high) of just over £400 in 2017. It is therefore an investment with potentially very attractive returns.
Furthermore, Monero allows payments to be made anywhere in the world, completely privately, with minimal transaction costs.
The risks of buying Monero
As with other cryptocurrencies, investing in Monero can be risky. It is advisable to always consider the risks (and their consequences) of investing, depending on your specific situation. Just bear in mind XMR has traded three quarters below its ATH for many years now.
Cryptocurrency is currently relatively unregulated by the world’s governments, especially those which are untraceable like Monero.
Monero is a unique cryptocurrency thanks to its fully private transactions and ease of mining. As a result, it offers something relatively unique which stands out from the thousands of currencies that exist in this crowded market – a statement that was recently confirmed by Kraken CEO Jesse Powell in an interview, saying he believed that anonymous cryptocurrencies will have a lot to offer in the future.
Just your average global millennial embracing, and interested in, the future of money and finance. Excited by blockchain tech as well as fintech but have a special passion for DeFi and Yield Farming, what will this technological disruption bring next?