A brief overview of Monero (XMR)
Monero is a cryptocurrency that was launched back in 2014 and the main feature about it is that it’s privacy-oriented and it functions as open-source on the blockchain concept. Open-source means that the software and technology used by Monero in order to be able to operate is built, tested and enhanced via user collaboration. Monero itself claims that more than 240 developers have contributed to building this project, and 30 of them are marked as the core group.
Monero was forked from the CryptoNote protocol and similarly to Bitcoin, it can be used to purchase various goods and services online. A fork usually occurs when a single crypto is split in two, and this is possible due to the open-source formats that are prevalent in most crypto designs. Such forks have been created in order to address the flaws that the original crypto may have had, thus offering users much more enhanced alternatives.
Its blockchain has the same technology used by most digital currencies, the same underlying logic behind cryptos while offering a public ledger for all the transactions that are performed in the network.
How is Monero different from other digital assets?
As a cryptocurrency, Monero distinguishes itself from other digital assets by granting its users a high level of transactional privacy.
Monero is well-known for its enhanced privacy as it was built lacking transparency on purpose. It was configured in such a way to hide the identity of both senders and recipients, and also the amount of every transaction made.
Monero’s protocol achieves a higher level of transactional privacy via the implementation of cryptographic technologies such as RingCT (Ring Confidential Transactions and stealth addresses and ring signatures.
The end result of Monero’s intense focus on privacy is a currency that is able to obfuscate transaction data, and for this reason, Monero can be considered to be completely fungible.
Only the actors involved in the transactions can accurately verify their rending and receipts as well. This is not the case with other digital assets and therefore the main difference in the privacy of transactions on the chains should be seen and the primary value offering that Monero flaunts.
Monero does not have a maximum supply, compared to other cryptos, but instead, it has a dis-inflationary emission rate. After roughly 18.4 million XMR have been generated via mining, a stable inflation rate of .3XMR per minute will go into effect, and this will take place sometime at the end of May 2022. The reason for this continued emission of XMR and lack of maximum supply is to incentivize in an ongoing way the proof-of-work security of Monero’s blockchain.
Monero uses a proof-of-work consensus mechanism wherein miners can solve a cryptographic puzzle in order to add a block of transactions to the Monero blockchain. Unlike other cryptos which have a fixed block size, the Monero protocol uses a dynamic block size that will change based on the 100 previous blocks. The periods of high transaction volume will result in the block size increase and the periods of low transaction volumes will result in the block size decrease.
Overall, the design main differences of Monero from other digital assets can be summarized as noted below:
- Monero is difficult to trace, and it’s more private than other cryptos.
- It continued rewarding its miners securing the blockchain long after the regular supply target is achieved which means a continued increase in supply.
- Its increased privacy has provided it with a high utility on darknet markets.
- As a cryptocurrency, Monero’s main application lies in its privacy-oriented features.