What Is Monero Coin & Monero Fundamentals Educational Review
By reading the article “What Is Monero Coin” published in Adaas Investment Magazine, you will get acquainted with the XMR token and what are the risks and benefits in general. This level of familiarity can be enough when you need educational information about this topic.
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We do not persuade anyone to invest or not invest in any asset.
Table of Contents
What is cryptocurrency?
Digital currencies are known as digital money or internet money. These currencies are completely Internet-based and there is no possibility of physical connection with digital currency. A group of digital currencies, Cryptocurrency, the protocol for making and using them is different from other models of digital money.
Introducing Monero Coin
Unlike most cryptocurrencies such as Bitcoin or Ethereum, where access to blockchain information is transparent and open to the public, Monero Coin operates in the field of private transactions.
Due to the very complex encryption of data in the Monero coin, no individual or organization is able to obtain information such as the sender and recipient address of the transaction or the amount of tokens sent in the transaction.
What are the purpose and use of Monero?
Many users of cryptocurrency technology, after the growth and popularity of this market, have faced restrictions such as financial sanctions and pressure to pay taxes. Thus, organizations such as Chainalysis, which have the ability to scan and track transactions in blockchains, have sounded a dangerous alarm for the privacy of users in the cryptocurrency market.
Monero coin has been able to best protect users’ privacy by developing a blockchain in which transactions are encrypted by sophisticated algorithms. With this in mind, the Monero coin is used in all transactions where the parties to the transaction agree to non-disclosure of transaction information.
Another goal that Monero coin pursues is to increase the scalability of its blockchain during network congestion. In the following, in the dynamic scalability section, we will fully explain how and the theory to solve the scalability problem in the Monroe blockchain.
Review the technology and features of the Monero coin
Monero cryptocurrency strives to provide a free, unsupervised trading environment. To develop this environment, Monero coin uses three technologies: Ring Signatures, Stealth Addresses, and Public Key Display for secure and private transactions.
Imagine 10 $1 bills with a thousand fingerprints and only one fingerprint belonging to the person who is the payer. In this situation, there is no way to establish a relationship between the payer and 10 $1 bills with a thousand fingerprints.
This theory demonstrates how the Ring Signatures technology works in Monero coin. By this mechanism, in each transaction, the information of one thousand transactions is mixed together, but this does not cause an error when sending and receiving the transaction.
Imagine writing down a post office box instead of your home and residence address to receive a letter when registering the recipient’s address, and then receiving the letter from there. With this mechanism, there is no way to prove your connection and the letter through the recipient’s address.
In the Bitcoin cryptocurrency, the sender of the transaction must enter the exact address of the recipient’s wallet directly. But in Monero coin, by the Stealth Addresses feature, users can use an address such as a mailbox to receive a transaction and in the term of transactions are not returned to the user.
Public Key Display
The ability for anyone to access the public key in transparent blockchains such as Bitcoin and Ethereum is a big problem for banks or brokers. Because of this feature, the probability of losing customers by their competitors is very high. On the other hand, legislatures and financial crime watchdogs welcome free access to the public key in blockchain technology.
Monero coin has created a win-win deal between legislators, organizations, and users by making it possible to display and access the public key. In this way, investment organizations can provide access to the public key for legislators and regulators to provide evidence of illegal transactions.
Monero tokenomics review
Monero coin has introduced its native blockchain token with the abbreviation XMR to the cryptocurrency market.
Monero coin has an unlimited supply of its tokens. When the total number of tokens reaches 18.3 million units, supply decreases, and a constant 0.3 units of Monero coin is mined. By this mechanism, the price of the XMR token experiences certain inflation and provides sufficient incentive for the miners of this cryptocurrency.
Another problem with famous cryptocurrencies such as bitcoin is the constant size of each block. This problem causes the blockchain speed to slow down when the network is congested.
Monero coin uses the Look-Back Window mechanism to scalable its blockchain. In this mechanism, the network increases the size and volume of subsequent blocks and the required computing power by examining the transactions history, and thus a problem such as slowness is solved during network congestion.
Advantages and drawbacks of Monero coin
Like any other project and technology, the Monero coin has different advantages and disadvantages, the most important of which are mentioned below.
- Monero coin can be introduced as one of the most private cryptocurrencies.
- It is impossible to track and return transactions to individuals.
- Dynamic scalability makes the cost and speed of transactions at their best when the network is busy.
- Optional public key display and wallet data.
- The technical team working on the Monero project has previously worked on the Bytecoin blockchain and is quite proficient and professional.
- There are not many wallets to support Monero coin.
- Monero trades are not supported in coinbase exchanges.
- Many black hat hackers and people working on the Dark Web use Monero currency.
- There are no completely safe ways to save the Monero coin.
- Use of Monero coin by countries under sanctions for international payments.
Monero cryptocurrency exchanges
To trade Monero token, users can use the following exchanges:
Also, You can visit the Monero cryptocurrency profile at CoinMarketCap.com to view the latest updates from exchanges that support this token trading and check their inventory through the following link.
The end words
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Monero Coin is a cryptocurrency which operates in the field of private transactions.