What Is Monero (XMR)?
Moreno is a decentralized open-source cryptocurrency which was created in 2014. Like most Cryptocurrencies, Moreno uses an instrument called “Ledger” to record transactions and units are created through a process called “mining”. Monero’s primary aim is to improve on the designs of existing cryptocurrencies. Monero obscures information concerning the sender, receiver and amount of transactions. Monero as a cryptocurrency is a secure, private and untraceable and unlinkable currency system. With the help of a cryptography, all transactions are 100% unlinkable.
Main Features of Monero
Monero as an open source cryptocurrency has some core features that separates it from other cryptocurrencies in the world, some of these features are;
Stealth Address – Ensures that all transactions made on Monero are private. Unlike most cryptocurrencies, Moreno does not reveal your actual “home address” it uses an equivalent of a post office box. The Virtual post office box ensures that your real address is not revealed. This means that any transaction carried out by you cannot be linked back to you.
Public View Key – Gives banks and brokers secrecy when they carry out transactions. Let me further explain this feature. Let’s use Facebook, for instance, there is a public key feature on Facebook, this key gives you the opportunity to choose if you would like your posts to be seen by the public or by your friends alone. Monero too gives its investors the privilege of choosing who can see the transactions they carry out. This feature is one reason why more people are investing in Monero.
Ring Signature – This feature ensures that information of a transaction cannot be traced back to the individual who made the transaction. To further illustrate this point we will use a $100 note, imagine that a $100 note is found on a crime scene and this supposed $100 has over a million fingerprints on it, it will be difficult to trace the real owner of the bill. This explains how the ring signature works, it mixes the transaction information of thousands of investors although ensuring that money of the investors is not mixed up. This mix up will ensure that it is difficult or almost impossible to link a transaction to any individual.
Limited Coin Supply – Monero has a set coin supply and inflation rate. This outlined supply ensures that the value of Monero is undiluted. Since its launch eight years ago, Monero has supplied a total of 18.4 million coins. As at January 2018, over 14.5 million coins have been mined, also adopting a 0.86% annual inflation rate.
Built-in Scalability – Monero has no programmed limits, network reviews, and more users automatically adjust the size of the blockchain to account for more transactions in a second. There is no real answer to how many transactions per second the network can “theoretically” handle though. A higher transaction rate means higher requirements, whether it’s bandwidth, CPU or disk storage. Bandwidth is the current limiting factor as far as for having a higher TPS.
Monero makes use of the Proof-of-Work algorithm, but the difference is that there is no centralized mining pool, investors mine coins by themselves. This is done in such a way that once a visitor visits the website, the visitors central processing unit mines the cryptocurrency while the visitor is going through the contents of the website.
Difference between Monero and other Cryptocurrencies
Like most Cryptocurrencies, Monero uses the proof of work algorithm, but it makes use of another mining algorithm which means that individual can mine coins by themselves.
Unlike other cryptocurrencies, Monero obscures the transaction information of its users from the public. The issue of privacy sets Monero apart from other cryptocurrencies. Monero uses three technologies which ensure that transactions carried out by investors are not seen by the public and that these transactions like a $100 dollar bill with millions of fingerprints cannot be traced back to the investor who carried out the transaction.
Another feature that sets Monero apart from other cryptocurrencies is that Monero’s block size has no limit. Most Cryptocurrencies have a block size limit of about a million or a thousand transactions that it can process in a second. Monero, on the other hand, does not. The size of the blockchain increases when there are more users, the block size is programmed in such a way. Monero has scalability.
Another difference between Monero and other cryptocurrencies is that Monero does not have as strong of an online presence. A strong community lies withint the Reddit sub, but other than that nowhere else. Most cryptocurrencies have forums which they update frequently, but Monero does not.
The public and private view keys on Monero differentiates it from other cryptocurrencies. Because of its primary focus on safety, Monero provides investors with private and public keys, this keys affords investors the opportunity to choose if they want their transactions to be seen by the public or not. This difference is one of the reasons why more banks and investors are using Monero, they want to be able to carry out transactions which cannot be traced back to them and Monero affords them that opportunity.
Monero Pros and Cons
- Three technologies (stealth address, public view key, and ring signature) are used to ensure that all transactions are private and secure.
- There is no programmed block size limit. Monero does not have a transaction limit, the blockchain is automatically programmed to increase its block size the more people use it. It expands automatically to fit in the desired transaction.
- All transactions in Monero take about 2 minutes for them to be verified.
- Monero is used by Bitcoin users to break link between transactions
- Monero does not have a standard voting system.
- Even though suggestions on how to better Monero are dropped by users on forums, the developers decide which technology or system they would adopt.
- The official Monero forum is not active. According to screenshots, the last time it was updated was June 2016.
- Multiple keys for transactions have made it more difficult for users to carry out their transactions.
Monero Useful Links