What do you need to know about Monero ?
- Monero is the emerging cryptocurrency with an emphasis on private transactions which are resistant to censorship.
Many other current cryptocurrencies have transparent blockchains, such as Bitcoin and Ethereum, implying transactions are freely verifiable and discoverable by everyone. In fact, transmitting and receiving addresses for these transactions may be connected to the real-world identification of an individual. Monero utilizes encryption, as well as transacted numbers, to secure sending and receiving emails.
- The trades in Monero are private and untraceable.
Every Monero transaction, by default, obfuscates sending and receiving addresses as well as transacted amounts. This always-on encryption ensures that the behavior of each Monero client, unlike narrowly open cryptocurrencies (e.g. Zcash), improves the confidentiality of all other users. Monero is very fungible. Monero will not be polluted by interventions in past transactions. This means Monero will always be accepted without the risk of censorship.
The Kovri Project, currently in development, will route and encrypt transactions via I2P Invisible Internet Project nodes. This will obfuscate a transactor’s IP address and provide further protection against network monitoring.
- Monero is a grassroots community attracting the world’s best cryptocurrency researchers and engineering talent.
Over 500 developers have contributed to the Monero project, including 30 core developers. Futhermore, forums and chat channels are welcoming and active. Monero’s Research Lab, Core Development Team and Community Developers are constantly pushing the frontier of what is possible with cryptocurrency privacy and security.
- Monero is electronic cash that allows fast, inexpensive payments to and from anywhere in the world.
There are no multi-day holding periods and no risk of fraudulent chargebacks. Also, it is safe from ‘capital controls’ – these are measures that restrict the flow of traditional currencies, sometimes to an extreme degree, in countries experiencing economic instability.
In July of 2012, Bytecoin, the first real life implementation of CryptoNote, was launched. CryptoNote is the application layer protocol that fuels various decentralized currencies. While it is similar to the application layer which runs bitcoin in many aspects, there a lot of areas where the two differ from each other.
While bytecoin had promise, people noticed that a lot of shady things were going on and that 80% of the coins were already published. So, it was decided that the bytecoin blockchain will be forked and the new coins in the new chain will be called Bitmonero, which is was eventually renamed Monero meaning “coin” in Esperanto. In this new blockchain, a block will be mined and added every two mins.
Monero is headed by a group of 7 developers of which 5 have chosen to remain anonymous while two have come out openly in public. They are: David Latapie and Riccardo Spagni aka “Fluffypony”. The project is open source and crowdfunded.
Monero’s special features
1. Your device belongs to you:
Traders have full control over their transactions. They are responsible for the money. No one will be able to see what they spend their money on because their identity is private.
All the data and transactions are private, no one can know what transactions user’s Monero has gone through before and neither can they know what was used to buy with this cruptocurrency. Since its transaction history can never be known, it also means that the “transaction” trail is non-existent. As a result of this, the concept of “tainted” Monero and “clean” Monero doesn’t exist, and hence they are fungible
3. Dynamic Scalability
Monero has no “pre-set” size limit, but this also means that malicious miners can clog up the system with disproportionately huge blocks. To prevent this from happening, a block reward penalty is built into the system. The median size of the last 100 blocks is taken which is called M100. Now suppose the miners mined a new block and it has a particular size which is called “NBS” aka New Block Size. If NBS > M100, then the block reward gets reduced in quadratic dependency of how much NBS exceeds M100.
This means that if NBS is [10%, 50%, 80%, 100%] greater than M100, the block reward gets reduced by [1%, 25%, 64%, 100%]. Generally, blocks greater than 2*M100 are not allowed, and blocks <= 60kB are always free of any block reward penalties.
4. Multiple keys
In addition, Monero has a public view key and a private view key. The public view key is used to generate the one-time stealth public address where the funds will be sent to the receiver. The private view key is used by the receiver to scan the blockchain to find the funds sent to them.
The pros and cons of Monero
- The transactions are not linkable.
- The transactions are not traceable.
- The blockchain doesn’t have a block limit and is dynamically scalable.
- Even when the Monero supply runs out there will be a continuous 0.3 XMR/min supply to incentivize the miners.
- Has achieved staggering growth financially.
- It is selectively transparent. Anyone can make their transactions visible to their person of choice. For example, an auditor by giving them their private view key. This also makes Monero auditable.
- Has a very capable and strong developmental team leading the charge.
- Monero transaction are significantly larger than other cryptos like bitcoin because of the amount of encryption involved.
- There is not much wallet compatibility for Monero. In fact, there are no hardware wallets compatible with Monero (as of writing).
- It is not beginner friendly and has not been as widely accepted and adopted.
- Because it is not a bitcoin based coin, Monero has faced difficult issues in the sense that it is harder to add things to it.
Source: Web.GetMonero, Bloockgeeks, CoinsWitch, CryptoBriefing,
Photo Credit : Elevenews.
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