Now that bitcoin has topped $11,000, there is no doubt it has won the crypto-race. Well and good. However, it is not the only well performing cryptocurrency since there are plenty others with just as remarkable a growth rate. Have you ever considered Monero, or are you just focused on bitcoin and Ethereum? If you hadn’t, then perhaps you should for several reasons.
What the heck is Monero?
Let’s just start right there, since most people don’t know a lot about Monero besides just seeing it somewhere below bitcoin. Monero was launched in April 2014, which was a long time after bitcoin, and it had one key difference in mind – privacy. Part of the allure of cryptocurrencies was that they kept the users’ identities anonymous. Once you created a wallet, it would only be identified by a private key generated by random characters instead of your name or adress. At first, this was sufficient privacy, but as cryptocurrencies like bitcoin started getting more attention, it’s not so much anymore.
You see, the private keys and the transactions are recorded on a public ledger for everyone to see. Even though it doesn’t show your exact name, it is possible to connect the dots and get an idea of who is doing what. It just takes an analysis of the history of a particular address. People still crave that anonymity, and several cryptocurrencies have been designed to do just that. For example, Dash, Zcash and Monero.
Monero achieves privacy by using a system called ring signatures, first described in 2001 by academics from MIT. Essentially, a user’s account key is ‘mixed’ with other public keys so that the exact recipient and sender cannot be narrowed down. However, a Monero user is still free to reveal their identity by sharing the information with particular parties. Since its launch, Monero has been gradually adopted by several major cryptocurrency exchanges. Today, it has a market cap of $3 billion and is the 9th largest cryptocurrency according to Coinmarketcap.
How good of an investment is Movero compared with others?
At Bitfinex exchange, Monero has had a 1,500% return since January this year, climbing from around $13 to a high of $208 yesterday. Compared to other cryptocurrencies like bitcoin and Ethereum, this may seem like an underperformance, but it is still remarkable. So far the growth has only come from demand in dark web marketplaces, but Monero could have a lot of other uses.
For one, it is capable of handling a much larger number of transactions compared to, say, bitcoin. Since this has been a major problem for bitcoin, It may someday be preferable among users. Besides, Monero coins are fungible, which means that there will never be a merchant who turns them down for any reason. All Monero coins are exactly the same due to their anonymity.
Over time, as users continue to crave anonymity, privacy coins like Monero will be in much higher demand, sending their value skyward. However, its growth may not be as rapid as that of bitcoin and Ethereum. It is more appealing to someone who is a long-term investor than a speculator.