Privacy and anonymity are some of the pillars upon which the foundation of cryptocurrencies are built. Many cryptocurrencies, like Bitcoin, attempt to anonymize users by using randomly generated addresses that cannot be linked to any particular user. However, since all Bitcoin transactions and associated addresses are publicly accessible on the blockchain, it is possible to link transactions over time to a particular address, which can possibly lead to the identity of the owner of the address.
Developed in 2014, Monero (XMR) is a privacy-oriented cryptocurrency which seeks to overcome the shortfalls of Bitcoin by making every element of the transaction (sender, transaction, and receiver) completely hidden from outside observers. Monero’s blockchain was built to ensure that all transactions on the network are fully confidential and untraceable.
Features of Monero
Monero’s features revolve around securing the privacy of users through the use of three main features: ring signatures, stealth addresses and ring confidential transactions (Ring CT).
Ring signatures – Monero uses ring signatures obscure the identity of the sender from the input side of the transaction. A ring signature is a unique digital signature that can be performed by any member in a selected group. The idea behind the ring signature is that the actual signer is never revealed in the group. Monero achieves this by combining a user’s account key with a number of public keys pulled from the blockchain to act as decoys. In this ring, it is impossible for an outside observer to determine which member of the group is the actual signer.
Stealth addresses – Stealth address conceal the identity of the receiver by randomly generating a one-time public key for the recipient. By using stealth addresses, outsiders observing the blockchain are unable to link wallet addresses in the transaction nor would they be able to associate this one-time generated key with any specific wallet address.
Ring Confidential Transactions (Ring CT) – Introduced in January 2017, Ring CT adds another layer of privacy by using cryptography to hide the transaction amount on the blockchain. In September 2017, Ring CT became mandatory for all Monero related transactions.
Trading and Storing Monero (XMR)
Due to its popularity (ranked No.10 on CoinMarketCap at the time of writing), Monero can be traded on over 30 exchanges. Currently, the most popular method of obtaining Monero is trading it for Bitcoin (BTC), Ethereum (ETH) or Tether (USDT). Some of the most popular exchanges with these trading pairs are Bittrex, Bitfinex, Poloniex, Binance, OKEx, and Kraken. Kraken and Bitfinix also support trading Monero for USD fiat currency.
Despite being one of the most popular cryptocurrencies, the wallet options for storing Monero are limited. Two of the biggest cryptocurrency hardware wallets, TREZOR and Ledger, do not currently support Monero.
Current storage options for Monero are:
- Web wallets – MyMonero is the only web wallet available for Monero at this time. It is owned and operated by Riccardo Spagni, one of Monero’s lead developers.
- Mobile Wallets – Monerujo is the recommended mobile wallet for Monero. It is currently only available for Android devices.
- Desktop Wallets – The safest and most reliable wallet is the official desktop client which can be downloaded from Monero’s official website.
- Paper Wallets – org is one of the secure paper wallets available. However, setting it up can prove to be too advanced for some. It is, therefore, only recommended for users with knowledge on setting up paper wallets.
Similar Privacy Currencies
Monero falls under the category of privacy coins which means its direct competition includes other privacy coins such as Zcash (ZEC), Dash (DASH), and PIVX (PIVX). Each privacy coin uses its own unique privacy technology to protect users and each has its own set of advantages and disadvantages. Monero, however, continues to remain the most popular private currency with the highest current rank in terms of daily volume and market cap.
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