On my fifth article of Altcoin of the Day, I am going to talk about Monero, a coin that is known for its extreme privacy when making transactions. Unlike other coins, I haven’t seen Monero’s price explode in recent weeks. Instead over a longer period of time there have been slow and steady gains; relatively speaking. I am going to go on my usual talk of how Monero is unique, the basics of how it works, any noteworthy news, and how this coin with a marketcap of $800M came into the spotlight.

What is Monero

Monero is known across the crypto community as a super privatized coin, and is known for that as well as scalability and decentralization. Monero uses the letters XMR for all trades and was created by a fork between them and Bytecoin. It was originally named Bitmonero but was shortened to just Monero soon after. Monero comes from the word coin in Esperanto. Now I am going to explain the basics of how the coin works, and how it is known for its super private qualities.

Basic structure of Monero

Unlike Bitcoin, Monero uses an algorithm called Cryptonode, which is used to privatize transactions. Transactions are hidden on the public ledger so it is impossible to see the amount sent, and who sent or received payments. Each Monero transaction has three elements; A “ring signature” is used to hide wallet addresses, “RingCT” hides the amount, and “stealth addresses” hide the receiving address. Monero is bound by proof-of-work, meaning that processing power determines if blocks are valid. However, unlike Bitcoin, Monero uses the Cryptonote proof-of-work algorithm making it virutally impossible to mine with ASIC computers. This means that CPUs are used to mine and people don’t have to buy expensive equipment. More people being able to mine and verify blocks makes it much more decentralized than Bitcoin in my opinion. Monero also has block scalability by allowing miners to verify bigger blocks if they choose. It also has a 1% inflation rate after the maximum number of coins are created, with the rate slowly shrinking to zero annually. Now I am going to move on to how Monero overtook Bitcoin long ago as the king of the black market.

Noteworthy News

Since Monero is so privatized compared to Bitcoin, people have been using it on the DarkNet for some time, in order to do illegal activities. The days of Bitcoin being associated with that stuff are long gone, as transactions can be traced by anyone on a public ledger. This means that some very malicious and very computer savvy people got ahold of the currency. On may 28th, a DarkNet group called AlphaBay started accepting Monero as payment. This is why the price was slow and steady until recently. As more DarkNet users found its privacy useful, it served a practical purpose for their malicious activities.

Overall Monero is an amazing coin, someone in a war torn country with a strict government crackdown on payment could use the currency to buy things they need. The model around decentralization is great, and allows average users to verify transactions. But due to the anonymous nature of the coin I don’t think it will be very practical for businesses or large organizations to get behind. Plus the association between Monero and the DarkNet may turn some potential investors or traders away. The black market thing does not phase me though, people use the U.S dollar to buy bad things too, no matter what the currency is you cant stop people from performing illegal transactions, its a bad thing that will always be there. Because of all of this though I think Monero will serve as a niche coin that will be very useful for DarkNet users, people who live under a totalitarian government, or people who are simply paranoid about being monitored. Whatever the case, I think Monero will become a powerful player in the crypto space.

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Bitcoin Wallet Address : 17XMu3B2WSxDq1EdG9abbtxqL85rxfr1GF

Dash Wallet: Xif5qGHvXjLYyVL7uKyEhr42S7ukEhxXMq

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Monero Wallet 4JUdGzvrMFDWrUUwY3toJATSeNwjn54LkCnKBPRzDuhzi5vSepHfUckJNxRL2gjkNrSqtCoRUrEDAgRwsQvVCjZbRvwJY4rizUrCjHSQsF

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Sources

https://getmonero.org/home

https://www.cryptocoinsnews.com/cryptonote-currency-bug-allowed-creation-unlimited-number-coins/