Monero arrived in the cryptocurrency scene distinct from others by introducing the concept of complete anonymity, and although Monero is built on open source technology, the most important feature of the project is the complete anonymity that it offers. Monero blockchain transactions cannot be traced, thus protecting coin holders and exchanges from prying eyes.
What is the purpose of the Monero project?
The Monero project was launched on April 18, 2014. The project is built on an opaque blockchain backed by the XMR cryptocurrency. The project was developed by a team of seven developers, of whom only three are known. Most of the remaining developers have pseudonyms.
When Monero was developed, it was the growing need for complete anonymity that it sought to solve, and to a large extent the project was able to fill that void. At the time it was launched, no digital currency offered untraceable transactions. Today, there are many projects that provide privacy, including what we discussed in the article on the most famous digital currencies of a privacy nature
Monero was created as a digital currency that operates independently of controlling forces such as central banks and government regulators. One of the biggest criticisms of fiat currencies is that the basis for their creation and valuation lacks transparency. Today, Monero derives its value from market forces of demand and supply as well as other factors in the global economy.
Monero can be used for several services, such as:
-A medium of exchange for settling goods and services.
-In the cryptocurrency markets that make it possible to trade digital assets.
-Built in digital wallets that allow instant payments.
How does Monero work?
The Monero ecosystem is powered by software called "Nitrogen Nebula", which makes it possible to conduct transactions without traceability. Transactions on the network are transmitted by "Dandelion++", every transaction on the network is made possible through the wallet, which is the primary storage method. Therefore, when cryptocurrencies are sent from one person to another, they only appear in individual wallets.
Initiated transactions are processed by miners who are responsible for the security and validation of all entries on the network. The protocol currently used in Monero is the proof-of-work (PoW) or "mining" model, on which Bitcoin is also based. The innovative feature of the PoW mechanism is that it requires mathematical puzzles and algorithms to be solved before value is created or transferred.
The digital currency Monero is XMR
Monero is more than just a medium of exchange. Since Monero has an entire ecosystem that accepts XMR as a means of recognizing and facilitating value, XMR is real money because it allows value to be stored, exchanged, and transferred. It is also much more than that.
Nowadays, Monero works like Bitcoin in terms of its use as an alternative payment method. With the pace of improvements to the ecosystem, we should not rule out the possibility of other uses emerging in the future. As the average Monero transaction on the network is around $0.0022, this fee is subject to ups and downs. This means that in seasons when the price of the cryptocurrency rises, the fees may be higher.
Another factor that can affect transaction fees is network congestion, although this is rare. One controversial feature of Monero is the prioritization of transactions which can lead to higher transaction fees. While this is not enforced on the initiator of the transaction, it is sometimes preferred to initiate it, if there are many transactions in the queue, the transactions with the priority fee will be attended to before the others.
What are the benefits of Monero?
Decentralization:
All transactions are validated using a distributed consensus mechanism, this ensures that there is no need for a central body like central banks to govern them.
Express Transactions:
Another shining benefit of blockchain networks is the use of automation. Transactions are verified based on authorization paths that do not require manual efforts, and this speeds up the processing speed.
Anonymity:
Monero derives its high rating from its first position as the leading cryptocurrency that offers complete anonymity. The value of the XMR in the wallet cannot be estimated by reviewing the explorer as the transaction details are encrypted.
Who is behind the development of Monero?
Monero's lead developer is Riccardo Spagni who worked with an initial team of 7 to found XMR. However, not much is known about 5 of the team members. Due to their preference for anonymity, 'Spagni' has remained in the spotlight over the years.
The latest update named "Nebula Nebula 0.16.0.0" was completed in the second quarter of 2020. There were 49 developers in the team to accomplish 81539 new lines of code to speed up and secure the ecosystem. The result of the update is increased security and lower bandwidth usage. This is expected to process faster transactions from now on.
Monero mining
Monero uses a proof-of-work algorithm, which requires XMR miners to compete against themselves in trying to solve a mathematical problem by guessing the required solution needed to broadcast a new block to the ecosystem. The accepted solution product is rewarded with the specified XMR, which currently stands at 3.41 XMR.
The way PoW works is such that it prevents double spending or network infiltration without consensus. Using completed transaction details as the basis for subsequent transactions means that fraudulent advantage on the network is extremely unlikely.
Monero wallet
The Monero wallet is designed as the primary storage for the XMR currency. Here are the most popular types of Monero wallets:
-Monero GUI - for PC.
-Monerujo - a mobile wallet.
-MyMonero - an online wallet.
-Guarda - Web / Mobile Wallet.
-Edge - a mobile wallet.
In addition, there are also hardware storage options such as: Trezor and Ledger Nano S.
Is Monero worth investing in?
It is always warned against investing in cryptocurrencies, due to the volatility of their prices. However, some investors will say that the higher the risk, the higher the reward. Many experienced cryptocurrency traders would agree that the market is known for its regular highs and lows.
The highs provide a good opportunity for those who bought the cryptocurrency at a low price. Low levels also give a good outlook as the investor can buy these cryptocurrencies as the price drops. So either way, the investor appears to have both paths to potential benefit. But, as with all investments, there are no guaranteed profits.
Anyone who purchases Monero must first set up and use the appropriate type of wallet for the purpose of security and possibly to avoid losses. Using an incompatible wallet means that the cryptocurrency is sent to a dead end that may not be recoverable. While different portfolios attract different investors, it is always advised to store your cryptocurrencies outside of exchanges if you are not actively trading. If you are looking for a huge return on your investment in XMR, then it might be wise for you to explore the market and understand how investing in cryptocurrencies works.