Bitcoin has been succeeded by several altcoins that seek to improve upon the characteristics that this pioneering cryptocurrency has. With new cryptocurrencies being launched very frequently, the crypto market has been flooded with hundreds of virtual coins. Of all these coins, only a few manage to make a mark. One coin that has managed to create quite a stir and leave a mark upon the crypto scene is Monero. Monero (XMR) made it to our list of the top 5 cryptocurrencies you should invest in, in 2018, and it is clear that the coin is worthy of our attention. Hence, in this article, we discuss the basics of Monero as it is definitely becoming a coin to reckon with.
What is Monero?
Bitcoin and other cryptocurrencies receive both praise and flak for the privacy and untraceability they allow to users. However, few other coins will be able to match the extent of privacy that is made possible by the Monero coin. By its own admission, Monero or XMR is a privacy coin, a cryptocurrency with a high degree of secure encryption which renders all transactions anonymous and untraceable. This open-source cryptocurrency has privacy, decentralization and fungibility as its key features and uses a supremely secure public ledger in which outsiders cannot view who sent a transaction of what amount to whom.
Key Characteristics of Monero
There are some important features that set Monero apart from other cryptocurrencies. Let’s have a look at the major characteristics that serve as this coin’s USPs.
Fungibility of Monero
Fungibility refers to the quality of an asset which makes it interchangeable with any other asset of a similar nature. For example, if someone hands another person a $10 bill, it would be perfectly acceptable for that person to return the amount in terms of two $5 bills. Therefore, fiat currency is usually, fungible. However, in case of Bitcoin, where every single coin carries with itself a complete record of all past transactions, fungibility is not possible. Every coin is unique because of its individual history. Monero however does not have this problem. With hidden transaction histories, Monero coins become entirely untraceable and hence fungible.
Decentralization of Monero
The blockchain architecture is characterised by inherent decentralization. Even so many blockchain networks, underlying various cryptocurrencies, are influenced by a specific group of developers. In Monero, that problem is entirely avoided as its developers are scattered around and the meeting records of these developers are available on public domain to ensure transparency in a network that underlies such an immensely private cryptocurrency.
Security and Privacy of Monero
Bitcoin’s system usually makes use of a public key and a private key to facilitate transactions. The problem with this is that public keys are visible to everyone and hence, traceable. Monero uses the unique system of ring signatures and confidential addresses to ensure no transaction can be traced back to either the origin or the destination. This layer of privacy also adds a layer of security by making attacks on user data unlikely.
Scalability of Monero
Bitcoin has often been slammed for not being scalable enough and its 1 MB block size limit frequently poses a problem in scaling the Bitcoin technology. Monero has found a way around this problem by doing away with a maximum block size system and introducing a block reward penalty system to dissuade malicious miners from jamming the network using extremely large blocks.
How to Buy Monero?
Now that you know what Monero is and what benefits it offers, you might want to buy XMR for yourself given it is one of the top ten cryptocurrencies in the market currently (in terms of prices and market cap). To buy Monero, you can simply go to one of the top cryptocurrency exchanges that trade in Monero and buy using your Debit or Credit Card. Some examples of exchanges that trade in Monero are as follows:
If you wish to buy Monero using PayPal, you can simply figure out how to buy Bitcoin with PayPal and exchange the same for XMR at any exchange that supports it.