Monero has created a cryptocurrency that is truly anonymous. The sender is anonymous, the receiver is anonymous, and the amounts are anonymous. Monero has other competition in the “privacy coin” space such as ZCash, and Dash. At the time of writing, the technology behind Monero appears to be superior in its ability to be private, fungible, and decentralized.
What problem is Monero solving?
Monero is best understood in comparison to Bitcoin.
Bitcoin is a decentralized digital currency. With Bitcoin you can send money to anyone in the world without a middleman (e.g. You can send money online with a free open source bitcoin wallet and without having to involve a bank). In contrast, Monero was started in 2014 as an alternative currency to Bitcoin…
According to the Monero team there are two problems with Bitcoin:
1. Bitcoin is traceable — Every bitcoin transaction is recorded on a public ledger. You can’t see the sender and recipients names, but you can see their wallet addresses. So bitcoin is not fully anonymous, most people refer to Bitcoin as being pseudonymous (or mostly anonymous). Listen to The Bitcoin Hunter on the Reply All podcast to learn about how a Bitcoin analytics company called Chainalysis is able to trace some bitcoin transactions in less than 30 minutes.
2. Bitcoin is not fungible —
What does it mean to be ‘fungible’?
“Fungible: The property of a good or a commodity whose individual units are essentially interchangeable.”
The US dollar is mostly fungible. For example, you and I could exchange 1 US Dollar, and each dollar is equal. 1 dollar = 1 dollar.
Because Bitcoin is traceable, there have been attempts to block, or blacklist bitcoin that comes from addresses where Bitcoin has been stolen, or gained illegally.
How does Monero solve Bitcoin’s problems of traceability and fungibility?
Monero is untraceable — Every transaction, by default, obfuscates sending and receiving addresses as well as transacted amounts.
Monero is fungible — Because it is untraceable, Monero cannot become tainted through use in previous transactions. This means Monero will always be accepted without the risk of censorship.
Monero is private — Monero is often referred to as a “privacy coin” due to it’s untraceable and fungible qualities.
Where do I buy Monero?
|What is it?||An untraceable, fungible, and private cryptocurrency|
|Inventor||Riccardo “fluffypony” Spagni, Francisco “ArticMine” Cabañas and 5 other core team developers|
|Went live||April 2014|
|Supply Cap||Once 18.4 million moneroj (the plural of monero is moneroj) is reached the inflation rate will continue at 0.3 XMR per minute, which is 0.87% per year.|
|Smallest Unit||1 tacoshi = 1/trillionth of 1 monero|
At the moment there aren’t any hardware wallets available for storing Monero. Although Monero support is available through the Ledger Wallet’s roadmap and could be coming in 2018.
Storage at cryptocurrency exchanges
You can store your Monero at a variety of exchanges such as Bitfinex and Binance. However, it’s not advisable to leave a large amount of coins on an exchange as all exchanges are an at-risk point for hackers, regulation, and third-party negligence.
Full node storage and paper wallet storage
The safest way to store Monero is with Monero’s full node. When you download the Monero full node you’ll be downloading the entire history of Monero to your computer — so you’ll need at least a few gigabytes worth of disk space.
Monero also offers a paper wallet storage, and a web wallet. Read more about Monero storage options on the official Monero website.
Unlike other cryptocurrencies, Monero is not a fork of Bitcoin, it is a fork of the CryptoNote protocol. The Monero team has created three new technologies in order to make Monero transactions completely anonymous:
- Ring signature — keeps the sender’s address private
- RingCT — keeps the transaction amount private
- Stealth address – keeps the receiver’s address private