It’s not too far-fetched to say that Monero (XMR) is the ideal coin for a connected world. The privacy-oriented coin is fast, private, and extremely secure as we already explained.
Monero users are basically their very own banks, and they have the ability to spend their coins safely while being sure that others cannot see their balances and track their activity.
Monero’s decentralization means that this secure digital cash is operated by a network of users. The transactions are confirmed by a distributed consensus, and then, they will be immutably recorded on the blockchain. It cannot be highlighted enough the fact that third-parties don’t have to be trusted to keep users’ XMR safe.
Monero is untraceable – XMR’s unlinkability
Long story short, sending and receiving addresses and transacted XMR amounts are hidden by default.
The transactions that are taking place on the Monero blockchain are not able to be linked to any particular user or any real-world identity.
Stealth addresses
When you are sending money to someone, they will not be able to tell that it came from you unless you tell the recipient.
When users are telling someone their Monero wallet address in order to allow them to send money, no one else will know how many payments or if any payments at all have been sent to them.
Let’s say that a person sends you money twice – no one can even tell that two payments have been sent to the very same person.
XMR’s untraceability

Even if a person knew about the specific funds that you are controlling at the moment, they would not have the ability to tell if or when you are spending those funds – this is what Monero’s untraceability means.
People cannot tell whom you have sent XMR to, and this is because the whole deal would look to the outside world as if people may be using your XMR in their very own transactions all the time. This is due to the ring signature – the cryptographic mechanism.
Because of the untraceability mechanism that’s been mentioned above, other XMR users will start to randomly include your received funds as a source of funds in their very own transactions.
So, as a conclusion, Monero enforces untraceability for all the transactions that are taking place.
The best thing is that the Monero network is always making sure that even when you are not sending and receiving XMR, the network makes it look like you are doing so.
Entities are trying to trace XMR transactions without much success
Over time, more entities have been trying to figure out how to trace the XMR transactions, but they have not been successful. For instance, the DHS has been extremely successful with tracking and analyzing Bitcoin transactions, but they have also been looking for a way to trace privacy coins.
ZDNet reported at the end of last year, that the US Department of Homeland Security (DHS) has been really interested in acquiring the technology solutions that can track Monero.
They have been planning to show that the best features that characterize Monero such as privacy and anonymity can be eventually killed. “While these features are desirable, there is similarly a compelling interest in tracing and understanding transactions and actions on the blockchain of an illegal nature,” a DHS document said as reported by ZDNet.
DHS wants to get their hands on some kind of tools that would allow tracking Monero transactions via exchanges and to fiat currency accounts.
Anyway, so far, tracking and demystifying the transactions of the privacy coin Monero is currently unlikely despite all the efforts that have been made in this direction.
Monero could be somehow traced only if there were vulnerabilities in the network and the developer team is working day and night to avoid these and make sure the users are safe and anonymous, and their transactions remain private at all times.