Can Monero [XMR] make you rich?
By the time the world got the whiff of cryptocurrencies, Bitcoin was already worth thousands of dollars. As people began realizing that they’ve missed the boat, they anxiously started searching the dock for an alternative that could make them rich quick.
Nothing but speculation and FOMO started ruling the crypto markets. Hundreds of unknown and untenable digital currencies started surging unscrupulously. However, not every crypto project was a scam. There were several great blockchain projects which were actually better versions of Bitcoin and the cryptocurrency of such projects still rule the crypto markets. One such cryptocurrency is Monero [XMR].
Boasting privacy and security, including 100% anonymous transactions, Monero has become one of the most controversial and popular cryptocurrencies. Just like most other digital currencies, Monero too has an open-source blockchain for recording transactions and supports mining for block generation and creating new coins. But its opaque blockchain is what makes it different. Monero’s blockchain is designed as such that the transactions cannot be traced to a particular address.
While the crypto community is divided over the anonymous nature of Monero, the supporters and cynics have surely made it one of the largest cryptocurrencies. But as an investor is this a good time to invest in Monero [XMR]? Understanding Monero, how it works, its history, and price fluctuations can help you make a better decision.
What is Monero [XMR]?
As per Monero’s website, it is a fast, private and secure digital currency. Doesn’t this sound something similar to Bitcoin? But while Bitcoin is a digital money, Monero is an “untraceable” digital money. Bitcoin is actually built around the idea of allowing people to view all the transactions on blockchain. But while this feature of Bitcoin might be useful for tracking government expenses, non-profit spending, etc. not everyone is really comfortable with the idea of the world having access to their monetary transactions.
Monero uses different technology to ensure that the transactions can never be traced. While a Bitcoin transaction might look like “Alice sent 1 BTC to Jenny”, the same with Monero would look like “? sent ? XMR to ?”. Neither the identity of the sender or receiver or the amount of Monero sent can be traced.
History of Monero [XMR]
CryptoNote, an application layer protocol for fueling decentralized currencies, was first implemented with Bytecoin in 2012. While CryptoNote is similar to Bitcoin’s application layer in many ways, there are some major differences too.
Bytecoin had a lot of potential but people soon discovered that more than 80% of Bytecoin were already released. So, the Bytecoin blockchain was forked and the coins from this new forked chain were named Bitmonero. It was renamed as Monero in 2015.
How is Monero [XMR] Different?
While many of the top cryptocurrencies use the core code of Bitcoin, Monero is based on CryptoNote protocol. It uses dynamic transaction fees and block size. Based on the demand, the block size of Monero increases and decreases. Moreover, the block size is also capped as per a fixed growth rate for preventing outrageous growth.
Scalability is a major problem with Bitcoin, however, with the dynamic block sizing of Monero, scalability can never really be a problem. Depending on the number of transactions, the network can automatically adjust itself.
Apart from this, you can use GPU and CPU power for mining Monero. Unlike most other minable cryptocurrencies, you do not need ASIC miners for mining Monero.
Other salient features of Monero [XMR]
Kovri is Monero’s decentralized anonymity technology. While it works like Tor, a popular anonymity network, it has additional technical characteristics. For instance, it makes use of garlic routing and encryption for creating private overlay networks. It is through this technology that the IP address and geographic location of the users cannot be traced.
While Kovro hides the IP address and location, ring signature eliminates transaction traces from the network. As soon as a user makes a transaction, it is mixed with all the other transactions to make it almost impossible for someone to trace it and reach the sender.
Public View Key
While privacy is the most important advantage of Monero, it also offers the public view key feature if people want to share their transactions with others. For instance, if an enterprise wants to hide their transactions from the competitors but doesn't mind sharing it with regulators, they can do so with this feature.
Monero Mining: Full Guide on How to Mine Monero [XMR]
CryptoNight, the hashing algorithm of Monero is different from Bitcoin due to which it is not compatible with ASICs (special hashing hardware) used for mining Bitcoin. This means that one can start mining Monero right from their desktop computers and laptops.
While mining of 1 BTC block takes around 10 minutes, 1 XMR block is mined in about 2 minutes. The total hash of Monero’s network has increased significantly in the past two years. So, if the hashing power is increasing or if the number of people mining Monero is increasing, why does it still take around 2 minutes to mine a Monero block? It is because of the networks difficulty.
As per CoinWarz, current Monero difficulty is 49.25 billion. The difficulty of the network is automatically adjusted on the basis of the total hash rate involved in mining Monero. So, if more users are trying to mine Monero, the time to mine 1 block of XMR still takes about 2 minutes. Even if the number of miners increases, the network will increase the difficulty to maintain this 2 minutes mining duration.
The current reward for mining 1 XMR block is close to 4.4XMR which is around $500USD. Isn’t that great? But hold on, who said you could mine an entire block with just your computer or laptop? Monero.How allows you to calculate the profitability of Monero mining on the basis of the CPU or GPU you have for mining. So, a normal computer or laptop with a dedicated video card can earn about $1 in a day. This can increase or decrease on the basis of the system and video card you use for mining and the changes in difficulty level.
This is the reason why people prefer joining mining pools rather than individual mining. A mining pool as the name suggests is a pool of miners from all over the world trying to mine XMR blocks. As the hash rate of multiple miners is combined, the blocks are processed faster. The reward earned is then distributed among the miners. You can find a list of trusted Monero mining pools and mining software on the Monero website.
Who is behind Monero?
Monero is a community project and no single organization is behind it. A large team of developers, engineers and researchers from the crypto world are associated with Monero. While there are currently 30 core developers, more than 200 people have worked on it.
The initial core developers team was made up of 7 people, however, only 2 are known- Riccardo Spagni who also goes by the name “fluffypony” on Twitter and Francisco Cabanas. The remaining 5 are just anonymous.
Price Fluctuations of Monero [XMR]
The privacy-focused architecture of Monero found a lot of takers in the crypto community shooting the price of 1 XMR from around $10 in January 2017 to around $480 in January this year. As per CoinMarketCap, Monero is currently trading at $121 with a circulating supply of 16,218,079 XMR, market cap of $1,969,004,484 and a 24-hour trading volume of $28,869,700.
While the price of XMR has crashed along with the entire crypto market since the beginning of this year, the 2018 roadmap of Monero looks super impressive. Apart from the roadmap, a lot of integration and partnerships are on the card too. If rumors are to be believed, there is also a Monero-Litecoin partnership that can happen this year.
So, while Monero hasn’t really been the most impressive cryptocurrency in 2018 from the price point, a lot is happening behind the curtains. The Recent News section of Monero website is an excellent place to stay updated about all the latest developments.
As soon as the crypto market starts to recover, XMR price is expected to spike on the back of all these developments. However, there is no saying as to whether the market would be able to revisit previous years growth in 2018.
Should You Buy Monero [XMR]?
While it was mostly FOMO in 2017, most investors are now smarter than they were last year and only pick coins after thorough analysis. As per CoinMarketCap, Monero is currently the 13th largest cryptocurrency. Right from the development team to the recent partnerships and integrations, Monero has come a very long way from its humble beginnings as Bitmonero in 2014.
At its current price, Monero can be a good investment but investors are advised to not invest all of their capital in a single cryptocurrency, especially when the crypto market is continuously falling from the past several months. If you are new to Monero, try to know as much as possible about the currency before investing.
If you’d like to mine Monero, understand how the mining process works and what are the top mining pools. You’d at least need a high-end graphics card to start making any considerable profits.
Where to Buy Monero [XMR]?
Monero (XMR) is available on many top exchanges. There are now also exchanges that allow you to buy XMR with fiat currencies like US dollar, British pound and Euro. On other exchanges, you can first buy BTC and then exchange it for XMR.
Some of the top exchanges are-
Go to the Downloads section on the Monero website to find all the latest desktop, mobile and hardware wallets.
To Monero, or Not to Monero
While there have been many crypto scams in the past, it is coins like Monero that have made several overnight millionaires all over the world. The privacy-focused built of Monero and constant improvements by the team carry a lot of future potential if blockchain actually turns out to be the future of global economy.
No matter if you plan to invest now or maybe a couple months from now when the markets start to recover, remember that holding cryptocurrencies for long-term is a time-proven way to earn handsome profits. Buy XMR from any of the top exchange, send it to your Monero wallet and hold until it reaches your target. Until then, closely follow the crypto news and developments by the Monero team and you’ll have a better idea about the right time to sell your holdings.
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