What is Monero Crypto & Should I Buy It?
The Privacy Currency
Monero is a decentralised cryptocurrency which focuses on privacy and processing untraceable transactions. Details such as the transactions recipient and sender addresses remain anonymous using cryptography.
Launched in 2014 following a hard fork from ByteCoin, Monero runs on the CryptoNote protocol, a platform which supports the privacy of users on the Monero blockchain.
Monero coins are mined by network users or nodes, but Monero has an egalitarian approach to its ‘miners’, where everyone is treated alike and given the same chance. To that end Monero coins can be mined from a standard computer.
How Does Monero Work?
Monero is a peer-to-peer network which uses a proof-of-work algorithm to validate transactions on the blockchain. While the ledger remains public, Monero has mechanisms to make transactions anonymous if users choose.
The two primary tools are ring signatures and stealth addresses. Ring signatures hide the transaction sender by collecting and signing transactions from different wallets to keep the source untraceable, slightly akin to having lots of fingerprints on a single bank note.
The stealth address is a unique address used by the recipient of a transaction. Each Monero account has a private view key, a private spend key and a public address.
Monero coins can be earned through mining of the digital currency. Monero does not require special software installed on computers to be a ‘miner’. Although the egalitarian approach means any computer can be used to mine coins, the more powerful the computer the better chance you have of being a successful ‘miner’.
To this end some users join mining pools to combine their hardware and enhance their prospects. In this instance additional software will be required. The process works by a proof-of-work consensus to maintain a decentralisation of the chain, although the size of the blocks can alter depending on demand on the network.
Monero also offers fungibility, meaning it can be interchanged with other similar assets. A Monero coin is untraceable, with no links to identify one coin from another.
Being untraceable, coins which have been used in practices other business may not want to be associated with can not be recognised and refused in order to avoid association. Worse still such accounts where they are held may be closed.
Without any traceable links this can not happen, providing confidence in their future use.
What Are the Use cases for Monero?
Monero’s primary use case is as a privacy cryptocurrency coin.
This is not just a feature which should appeal to businesses, as the implications are beneficial for individuals in general too.
As more and more payments become digital, a blockchain which offers the chance to remain anonymous to prying eyes may help keep your assets hidden and safer from theft.
This in sense makes it like cash as the transaction is not traceable by a merchant and they will not be able to see associated user details.
Of course any payment transaction processing may ultimately require some regulatory oversight.
The view key on Monero enables users to show the transaction history of their wallet to the authorities or other organisations if they wish.