Monero (XMR) Overview and Analysis
As one of the most popular security focused cryptocurrencies, what is Monero?
By Josh Moir
11th January 2021, 20:45 GMT
Monero is one of the most popular security-focused cryptocurrencies with a market cap of $2.9 billion at the time of writing.
Monero is unique due to it being the leading anonymous cryptocurrency, being a secure, private, and untraceable currency system.
Unlike many of its virtual currency counterparts that promote transparency, Monero uses unparalleled cryptography so that all transactions are completely untraceable.
Monero began in April 2014 as a fork of Bytecoin, which was a promising currency but as a result of people not trusting the coin due to many of the being published already along with other things, Monero was decided as the successor.
Monero gained popularity for its anonymity. Whilst with Bitcoin all transactions are available publicly along with how much Bitcoin a wallet holds.
Monero on the other hand does not allow people to view the wallets holding or previous transactions.
To conduct a transaction, Monero creates a randomly generated address that is used uniquely for that transaction.
This address is not associated with either the sender's or recipient's wallet address.
Monero also has a ring signature, this means that when you send a transaction, it is grouped with multiple other transactions to make it extremely complex to trace the transaction.
Furthermore, when undergoing a transaction, Monero will split the amount being sent into multiple amounts.
It will treat each of these amounts as separate transactions, meaning the security protocols are repeated and ensuring that total anonymity is enforced.
As a result of this total anonymity, you cannot form a trail of where the Monero has been.
This means that clean or dirty Monero cannot exist, unlike Bitcoin where you can follow previous transactions and discover where the Bitcoin has been sent.
Monero also allows you to have confidence that whatever you spend your Moneroj on, only you can see.
Monero is not completely anonymous however, it allows users to share their view key with certain people whilst adding limitations.
For example, a user can view the amount of Monero in the account but not allow any transactions to occur.
The user can set how far into the transaction history the shared view key can allow or only choose certain transactions to be shared.
This means that whilst Monero upkeeps strict anonymity, it also promotes transparency at the user's will.
Monero's central development team is made up of 7 developers, of which 5 still remain anonymous.
The 3 key takeaway of the Monero currency is that it is secure, private, and decentralized.
Moneros popularity has been stalled by the common use of the currency for engaging in illegal activities on dark web markets.
As a result of this, adoption for Monero has been slow and it is unlikely we will see mainstream adoption for this currency in the short term.