Table of contents:
- 1 Monero Blockchain – high level of anonymity
- 1.1 Monero Blockchain with focus on privacy
- 1.2 Monero – no maximum amount of money
- 1.3 High storage capacity required due to the Monero Blockchain Size
- 1.4 The fungibility of Monero
- 1.5 Advantages of Monero over Bitcoin
- 1.6 Buying Monero – what you should consider
- 1.7 Mining from Monero
- 1.8 Negative image of Monero
- 1.9 Conclusion: Monero Blockchain is different from other blockchains
Monero Blockchain – high level of anonymity
The Monero is based on a block chain, just like the Bitcoin. Because of the Monero block chain it can be created by mining. Unlike Bitcoin, there is no final money supply in the Monero. The Monero has some special features compared to other digital currencies. The Monero Blockchain Size continues to increase, but the number of Moneros in a block is continuously decreasing. The Monero Blockchain is much more anonymous than the Bitcoin Blockchain. Transactions are not publicly visible. If you want to learn more about the block chain, you can download a Monero Block Chain.
Monero Blockchain with focus on privacy
The Blockchain of the Monero values privacy and anonymity. The Monero is characterized by decentralization and scalability. Transactions are not publicly visible. The block chain uses a power-of-work algorithm known as CryptoNight. The Mining Difficulty is continuously adjusted. This means that the more people are involved in mining, the higher the difficulty level becomes. The block size is also constantly adjusted. The number of moneros in a block is getting smaller and smaller.
Transactions in the Monero Blockchain can also be made anonymous. The system can combine transactions into groups. Individual users only appear as members of the group. The transactions can only be assigned to the group. Individual transactions are hidden in the transactions of the group. There is an extension for this function called RingCT. With this extension the amount of a transaction can be hidden. These functions prevent traffic analysis and data mining. If high amounts are repeatedly instructed, this can be suspicious, even if nothing is known about the user. This is avoided with the anonymity of the Monero Blockchain. However, there have recently been successful cryptoanalyses on Monero protocols. The Monero block chain is therefore vulnerable to attack on a case-by-case basis. It remains to be seen whether this leads to fundamental problems.
The design of the Monero Blockchain allows the participants to interact with the blockchain. However, outsiders do not gain insight into the processes. You can track your own transactions by using a separate key.
Monero – no maximum amount of money
The Monero Blockchain Size gets bigger and bigger. This means that more and more memory capacity is needed for a Monero Blockchain download. This is also the case with other block chain-based crypto currencies. However, the Monero, whose symbol is XMR, differs from Bitcoin, Dash and various other crypto currencies in that there is no maximum amount of money. Bitcoin and Dash can no longer be created by mining once the maximum money supply is reached. The Monero, on the other hand, can at least theoretically be mined over an infinite period of time. However, this affects the number of moneros per block. It is assumed that a money supply of 18,132,000 XMR will be reached in 2022. At that time the number of moneros per block will be limited to 0.6 XMR.
Whoever creates moneros by mining will then be rewarded with 0.6 XMR per block. This number is frozen. This means that from this time on there is no more and no less XMR per block. A block is created within two minutes. The development of the Monero money supply can therefore be estimated. Per year 157,788 XRM can be generated. In the year 2040 there will be more than 21 million Moneros. The money supply of the Moneros will then exceed the money supply of the Bitcoins and also other crypto currencies with maximum money supply. For the year 2130 a produced money supply of 35 million XMR is counted on.
High storage capacity required due to the Monero Blockchain Size
The Monero Blockchain is similar in design to the Bitcoin Blockchain. With Bitcoin, it takes about 10 minutes to create a block, while with Monero it takes only two minutes to create a block. The block chain is checked with a Proof of Work. However, there are differences between the Monero block chain and the Bitcoin block chain in the algorithm. While Bitcoin uses the SHA-256 algorithm, the Monero algorithm is called CryptoNight. This algorithm is less computationally intensive, but it is memory intensive. This is due to the Monero Blockchain Size. For a Monero Blockchain download you need a high memory capacity. You can run Monero Mining on standard household computers, which is not possible with Bitcoin Mining. Nevertheless, your computer should have a powerful graphics card. However, what you need if you want to perform a Monero Blockchain download is a large memory.
If you want to trade with Monero, you need a Monero Wallet. For a desktop wallet you need to make a Monero Blockchain download, which requires more and more memory the more Moneros are created.
The fact that the money supply is not limited with Monero can be positive. With crypto currencies with maximum money supply, lost coins cannot be saved. The situation is different with Monero. If Monero coins are lost because the user forgets the password to the wallet or dies, the amount can be adjusted. However, inflation can occur if too many coins are distributed. With the inflation plan and the algorithm CryptoNight this should be prevented.
The fungibility of Monero
The Monero Blockchain has even more special features compared to the blockchain of other crypto currencies. The Monero network is decentralized. All nodes are equal. Unlike other crypto currencies, there is no superclass of nodes that have more influence or control over the system than other nodes. Each node is equally important, regardless of the number and amounts of transactions.
Monero is characterized by high fungibility (interchangeability). One value can easily be exchanged for another. The transaction history is not unique with the Monero Blockchain because all Monero Coins have the same identifier. Compared to Bitcoin or Ethereum, the tokens cannot be blacklisted or marked in the Monero Blockchain. It is not possible to trace where the coins come from.
A block chain analysis or block chain monitoring does not make it possible to trace the coins.
Ring signatures prevent transactions and amounts from being traced. A transaction can almost never be linked to a user. If you mine or trade with Monero, you can use view keys to view your transactions. All transactions in the Monero block chain are actively encrypted. This probably affects the Monero Blockchain Size and the high storage capacity for a Monero Blockchain download.
Advantages of Monero over Bitcoin
Even if the Bitcoin is still the crypto currency with the highest market capitalization and the Monero with its market capitalization is currently only in 13th place, the Monero Blockchain offers some advantages over the Bitcoin Blockchain. The Monero is better divisible, since it can be accounted for up to 12 decimal places. However, at the Monero’s current exchange rate of less than 50 euros, this only plays a minor role. However, if the Monero exchange rate increases, this could be of importance in the future. Since Monero mining is still possible with simple computers, it is not reserved for a small group. There is therefore no power centring with a few mining providers, but mining can also be done by private individuals.
Compared to Bitcoin and other crypto currencies Monero offers several advantages:
- Transactions cannot be traced
- decentralized peer-to-peer network
- System is almost complete
- User accounts cannot be viewed publicly
- high level of security and confidentiality.
In the peer-to-peer network, Monero is secured by numerous users. If you want to create Monero by mining or trade with Monero, you need a wallet. This wallet corresponds to the technology standards of the industry and is strongly encrypted. You can use a hardware wallet to prevent hacker attacks
Even if you trade Monero on a crypto exchange and use a wallet there, other users of the Monero block chain cannot track how many XMRs are in the wallet.
Buying Monero – what you should consider
If you want to buy Monero, you should first buy a wallet. You should invest in a hardware wallet that you can disconnect from your PC. It is safe from hacker attacks. You can buy Monero on various crypto exchanges. You should make sure that it is a reputable exchange and that you can buy Monero for Euros. At some exchanges crypto currencies are only available against other crypto currencies. You should pay attention to different payment methods, for example payment by credit card. To purchase Monero you need to open an account and verify your identity. You must deposit your investment amount and then purchase the desired amount of Monero for Euros. The purchased Moneros will be added to your wallet.
Due to the special features of Monero Blockchain, no one can trace back that you bought Monero. It is also impossible to trace the amount you have purchased.
It is no different if you want to sell Monero again. You have to take Monero from your hardware wallet to the stock exchange and then sell it for Euros. Your transaction is not visible due to the anonymous Monero Blockchain.
You need a PrivateKey if you want to view your transactions. This is useful if you have lost track of your transactions or want to know what you have already done.
Mining from Monero
If you want to benefit from Monero, you can do mining. Mining is possible because there is a Monero Blockchain. Anonymity is also guaranteed in mining due to the Monero Blockchain. However, you should remember the Monero Blockchain Size and the high storage capacity of the Monero Blockchain Download. For the Monero Mining you need
- Hardware, preferably with a good graphics card
- Software, some of which you can get for free
- Wallet where you deposit the coins.
- You do not have to invest in expensive hardware, as is the case with Bitcoin.
For mining you need electricity and use the Monero Calculator as software. Mining is profitable if the Monero earnings you achieve in mining are significantly higher than the cost of electricity. You should look for a cheap electricity provider in the electricity provider comparison. In addition, when looking at profitability, you should not forget that you have to take the cost of hardware into account.
If you do not want to operate mining yourself, you can join a mining pool. In a mining pool you have to pay fees. It is easier to track down a block in the pool. However, what you get in the end is less, because the coins are divided among the members in the pool.
In a mining pool you can use your own hardware. However, you can also rent the hardware. Monero’s Minig is easier than Bitcoin’s Mining. However, you should not forget that it involves a lot of effort.
Negative image of Monero
Due to the anonymity of the Monero Blockchain, the Monero also has a negative image. Also other digital foreign currencies such as Bitcoin are sometimes attached to a negative image. The negative image of the Monero is based on the high anonymity. Since the individual transactions cannot be viewed by other users and privacy is maintained, the Monero Blockchain opens doors and gates to money laundering. To date, no serious money laundering activities have been reported. However, the development should be monitored more closely.
The reason why the Monero has a negative image is also due to its use as a means of payment. The Monero is already used for payment in Darknet. The use of Monero to finance terrorist activities cannot be ruled out either. However, the Federal Ministry of Finance classifies the danger of terrorist financing through crypto-currencies as low.
If you would like to invest in the Monero, you should not be impressed by this negative image. If you value anonymity and privacy, you can invest in Monero and trade on a crypto stock exchange.
The negative image of Monero does not matter if you want to trade CFDs with Monero. You bet on rising or falling prices and do not have to purchase Monero directly. Due to the leverage, you can make high profits, but also suffer high losses.
Conclusion: Monero Blockchain is different from other blockchains
The Monero is based on a block chain and can be created by mining. The Monero block chain is based on a different algorithm than the block chain of Bitcoin. This allows a high degree of anonymity. It is not possible to trace individual transactions. Users of the Monero Blockchain cannot see what amounts were traded by other users. However, you can track your own transactions in the Monero Blockchain if you use a private key. The Monero does not require a high level of computing power, but due to the Monero Blockchain Size, the Monero Blockchain Download requires a large amount of memory capacity. If you wish to purchase Monero, your transactions are not visible to others in the Monero Blockchain. This also applies to Monero Mining.