While many people may be aware of the cryptocurrency Bitcoin, its ultra-anonymous alternative Monero, is, by its very nature, shrouded in secrecy. In 2016, Monero outpaced Bitcoin’s growth on a monumental scale, multiplying its value by almost 30 times. It was the best performing cryptocurrency last year, with the total value of all Monero said to be around $165 million. But what makes this relatively new-kid- on-the-block so attractive?
Monero’s main selling point is its privacy. Unlike Bitcoin, which, contrary to popular belief, doesn’t offer very strong privacy protection, Monero offers full anonymity and is virtually untraceable.
With Bitcoin, the public address of both the sender and recipient is revealed, along with a transaction amount and timestamp. A little bit of data mining can therefore reveal the sender’s and receiver’s identities. Monero has taken advantage of Bitcoin’s weakness by integrating anonymity into the cryptocurrency itself. Unlike Bitcoin and other cryptocurrencies that are derivatives of Bitcoin, Monero is based on the CryptoNote protocol. It also uses a technique known as “stealth addresses” to generate recipient addresses that are basically encrypted. This means that the recipient can access the funds sent to them, but the address cannot be linked to them.
“The Anonymous Coin”
Stealth addresses are powered by a technique known as “ring signatures.” Hundreds of Monero transactions are grouped together, so the spender’s address is combined with a large group of strangers. As the saying goes, there’s safety in numbers. Each movement of that Monero then makes it increasingly more difficult to trace back to its original source. To make the transactions even more private, Monero also utilises a technique known as “ring confidential transactions” which hides every transaction amount.
Apart from the privacy aspect of Monero, the fact that Monero funds are virtually untraceable means that they aren’t tainted by association with previous owners. That means that you can receive Monero with confidence, without the risk of the funds being censored at currency exchanges or merchants. Similarly, the currency is fungible, which means one Monero will always be equal to another.
Monero has humble roots, gaining traction without any crowd sale pre-launch, VC funding or pre-mine. It was bootstrapped by its creator and launched on a message board in 2014. Its creator and core developers now serve the community anonymously and support is given through a large online community across Slack, Telegram and Rocket.
The Future For Monero?
Much of Monero’s growth is thanks to its adoption by darknet market AlphaBay in the summer of 2016, along with a smaller market known as Oasis. Its value increased six-fold after its integration. AlphaBay now states that the cryptocurrency accounts for approximately two percent of its total sales. This might sound like small-fry, but it amounts to potentially millions of dollars in annual revenue.
Monero’s secrecy is a huge attraction for more nefarious users, however, it could also be used by people wanting completely secure and private transactions. In the future, it could be used by people wishing to buy censored books or materials or those wishing to keep their net-worth secret.
Illegal or not, what is clear is that Monero’s user base is growing fast. In a world where our every move is tracked and analysed, a truly untraceable and private cryptocurrency is a very attractive option for many.
How To Buy Monero
- Head over to one of these currency-to-crytpo exchanges and purchase Bitcoin.
- Once you have your Bitcoin, send your Bitcoin to your account wallet on a crypto trade exchange such as Poloniex, Kraken, Bitfinex, or GDAX to name a few. Here you can buy Monero or any other cryptocurrency being traded on that exchange.
- Download Monero’s official wallet to store your coins.