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If you are looking for private and censorship-resistant transactions, Monero is the top cryptocurrency for you. Generally, many cryptocurrencies such as Ethereum and Bitcoin use transparent blockchains to operate. This means that anyone who is using cryptocurrency exchanges to make transactions like receiving or sending addresses could be connected to real-world identities. Instead of doing this, Monero equips a range of diverse privacy-improving mechanisms to make sure its users remain anonymous throughout the process of creating transactions. Let’s take a look at Monero (XMR) in more detail.
What is Monero (XMR)?
Introduced in 2014, Monero (XMR) operates as a privacy-focused open-source cryptocurrency. As the foundation of digital currencies, blockchains are public ledgers of participants’ activity that record all transactions incurred within the network, whereas Monero’s blockchain is built to be as opaque as possible. Its blockchain hides away the addresses used by participants, thus making the transaction details such as transaction amounts and recipient and sender identities anonymous.
Built on an egalitarian principle coupled with anonymity, Monero mining ensures that everyone participating in the process is considered equal and gets the same opportunities. When Monero’s creators launched the platform, they did not hold any ownership, however, they did depend on community support and contributions to assist the virtual currency in its growth.
Talking about anonymizing transaction details, it becomes essential for a potential investor to understand how Monero maintains and enhances the privacy of its users. Here’s how the platform is doing it:
How does Monero (XMR) improve privacy?
Using the concepts of stealth addresses and ring signatures, Monero manages the privacy concerns of its users. Ring signatures enable the mechanism where the sender can keep their identity hidden from other group members. Furthermore, these types of signatures are anonymous digital signatures from one group member that do not showcase who signs a transaction.
To build a ring signature, the Monero network uses a combination of public keys and the sender’s account on the blockchain. This makes the signature private and distinctive. It masks the sender’s identity since ascertaining which of the group member’s keys was used to develop the complicated signature is computationally impossible.
As Bitcoin is the most prominent and widely used cryptocurrency in the world of crypto trading exchanges, many coins are trying to surpass its achievements. However, Monero with its governance token XMR has already started to take the lead with its unique functioning. Let’s take a look at how Monero is different from Bitcoin:
How is Monero different from Bitcoin?
As formerly said, Bitcoin is the most widely used cryptocurrency, it functions on a protocol utilising pseudonym addresses to hide the participant’s identity. Generated randomly, these pseudo names consist of numbers and alphabet combinations. But, these names are available to the public, as both Bitcoin transactions and addresses are recorded on the blockchain. Pseudonymous addresses are not completely anonymous. The identity and trends of the address owner can be revealed if there are a few transactions made by the participant over a period of time linked to the same address.
Another merit of Monero over Bitcoin is fungibility. With no difference in value, the two units of a currency can be replaced by each other. For instance, two one-ounce gold bars of the same grade are fungible since they have the same value and no identifying traits. On the other hand, two Rs.10 notes having the same face value aren’t fungible as each has its serial number. Here Monero represents the gold piece whereas bitcoin represents the Rs.10 note.
Each of the bitcoin’s transaction history is tracked by the blockchain. It allows the identification of bitcoin units concerned with specific events such as theft or fraud, enabling the suspension, closure or barring of accounts holding such units. To prevent these situations from happening, Monero offers its users an untraceable transaction history, making it a secure network for members. They won’t have to face the closure or suspension of their accounts.
To conclude, Monero (XMR) is a great platform for investing as it not only equips your identity with optimum safety but also provides you with a uniform crypto trading experience.
