Built on the foundation of utmost confidentiality, Monero(XMR) is one coin every crypto trader should be actively or passively linked to. This extensive guide will tell you all you need to know.
I would not be surprised if you know little or nothing about the Monero (XMR) cryptocurrency. It simply means the virtual coin is truly living up to its designation. Monero, unlike other tokens such as BTC, Ethereum, is a flag bearer for anonymity and non-traceable transactions. Although BTC and Ethereum enjoy a level of anonymity, when compared to XMR, there is a huge ground to cover.
Monero(XMR) boasts of these features thanks to incredible high-tech cryptography, giving you zero chance of knowing who sent, received, or the amount of Monero token sent during a transaction. Dark web users, top online casinos, and traders looking to avoid international sanctions employ this private token in their dealings.
Caveat: Everything surrounding the Monero(XMR) crypto might seem a little complicated. However, if you flow with me step by step, you shouldn’t miss a thing.
What is Monero(XMR)?
Monero, according to its official website, is a secure, private, and untraceable currency network. It employs unique cryptography responsible for the untraceable nature of its transaction.
The History of Monero(XMR)
The buildup to Monero started with a different digital coin — Bytecoin. This crypto was launched precisely in July 2012 under the CryptoNote protocol. CryptoNote, at the time, was responsible for the regulation of most ( about 90% of) privacy-oriented cryptos via the combination of several public keys.
This attempt at top-notch transaction anonymity was a great one and lasted for a while until flaws started to emerge. Users began to notice discrepancies in its initial distribution and that most of the coins already existed.
These and more shady pieces of evidence led to the forking of Bytecoin and the emergence of a new channel called Bitmonero. Forget about the ‘bit’, Monero is the modern-day name, and it means ‘coin’ in Esperanto.
Although the Monero Project is open and crowdfunded, a team of 7 developers heads the department. Of the 7, 5 have decided to keep their identity private while the remainder 2 are David Latapie and Riccardo Spagni (also known as Fluffypony).
Why is Monero so unique?
Moreno remains in high demand for various reasons. See for yourself:
This is, without any doubt, Monero’s greatest selling point. The fact that no one knows who you are, how much you of the token you have, how much you are spending, and pretty much what you do with all your transactions makes it a great option for individuals with privacy concerns or issues with international restrictions such as Crypto casino lovers. Although the legality of every operation via Monero will always be in question, I recommend playing by all regulations.
- Dynamic Scalability
In terms of the ability to cope with demand, XMR does a better job than blockchain-based tokens. For the sake of argument, here is a breakdown of how Monero edges its running mates:
Initially, Bitcoin had no block size limit. However, with the emergence of spam transactions, size limits (precisely 1MB) were introduced.
The same can be said for Monero. However, in its case, block reward penalty (instead of size limit) was stipulated for every operation.
For Bitcoin, this means only 1MB of the transaction can fit into available blocks. What happens when the number of transactions or users increase? Transactions that cannot fit into these blocks must exercise patient for miners to include them. Since miners prefer transactions with huge fees, your transaction might just have to linger unless you are willing to increase your stake.
Monero regulates demands differently. A block reward penalty system is employed instead. Take, for example, the median size of the 100 is calculated as M100. If a new block is mined with a size greater than M100 (NBS > M100), the reward gets reduced in a quadratic fashion. NBS stands for New Block Size.
Mathematically, using M100 as a standard, if NBS is (10%, 50%, 80%, 100%) greater than M100, reward reductions comes in (1%, 25%, 64%, and 100%) respectively. This translates to a dynamic flow that will keep miners in love with mining Monero.
- Multiple Rings (Keys)
Unlike BTC and a host of altcoins which boast of one private and a public key, XRM employs a different system of keys: View keys (for the receiver) and Spend Keys (for the sender).
Views Keys have a public and private version. The public view key provides a one-time stealth address (for the find receiver) during a transaction while the private view key scans the blockchain to locate incoming funds.
Spend keys also have a public and private subdivision. The public spend key allows the sender to participate in ring transactions and confirm the key image’s signature. The private spend key creates a key image. Without this image, you cannot send funds.
PS: A Monero address is a string of 95 characters from the public view and public send key.
This feature is a subset of Monero’s privacy prowess. At this point, we all know it is possible to track BTC transactions from one user to the next, right? This implies that a user can tell if your token has malicious activity written over it and might decide to reject your ‘tainted’ coin or offer a reduced value instead.
Nothing of such is a concern when you are in business with Monero because your coin is untraceable. This is what it means to be a fungible asset.
- ASIC Resistant
I’m tagging Monero as ASIC Resistant because manufacturing one for it won’t do you any good. Not to mention the amount of money that must have been involved. Monero already has an existing hashing algorithm within CryptoNote — CryptoNight.
CryptoNight is designed to make the Monero(XMR) world a better-decentralized ecosystem. In other words, Monero can be mined by both CPU and GPU.
Creating a Monero(XMR) account
- Visit www.mymonero.com and tap the ‘Create account’ icon.
- Ensure you carefully read and understand the page. Especially everything that concerns the safe storage of your private key login details.
- Write your private login key somewhere.
- Insert the login key in the box under the key to confirm you took note of it.
With these 4 steps, a Monero wallet is all yours. Next thing is to deposit some XMR coin, right?
Depositing XMR tokens
- Note the address (more like an account ID) at the top of your Account overview.
- Go to your preferred choice of exchange platform, e.g. Binance. This is where you will be sending the amount of Monero you wish to buy from.
- Insert the address you jotted down in ‘Step 1’ in the space meant for your wallet address in the exchange network.
- Some exchanges might request you confirm that you just initiated a withdrawal by clicking a link in the email you registered your account with. In the absence of this, all that is left is to follow on-screen instructions.
How about Sending XMR from Your Wallet?
- Click on the “Send” button.
- Input the address you wish to send to. Please note that this address (regardless of the exchange network) must accept Monero as a payment option.
- Input the exact amount you wish to send.
- Select the degree of privacy you want for the transaction. Big ring size equals a big transaction charge.
- Hit the “Send Payment” tab, and that’s it!
In a world where almost nothing seems private anymore, the knowledge of crypto with the ability to protect your identity is a gem. The privacy Monero(XMR) can be used in two ways, and for the record, I stand by only morally defensible actions.
I understand this might be a little complex to take on for a beginner’s guide. However, if at this juncture you know what Monero is, its unique features, how to create a wallet, send and receive, and what the future holds for the token, then I have done a great job!
Until I come your way next, get in touch if you have got any questions regarding Monero.