Introduction
Transparency and privacy do not work hand in hand at all times, Bitcoin can be pseudonymous but it is in no way private. Privacy comes with keeping all activity inaccessible by third parties but Bitcoin only gives each individual a unique address but all activities are broadcasted on a public ledger which can be accessed by anyone interested. If the blockchain promises privacy, then it has a lot of work to do than broadcasting all transactions on a public ledger, and this brought about Privacy coins. In this post, I will be looking at Monero as a privacy coin.
Choose a Privacy Coin and perform a fundamental analysis of the coin in detail.
What is Monero
Monero launched in 2014, as an open-source privacy-oriented network on the blockchain. Monero is a blockchain network that is built and operates mainly on its concept and this concept is called the egalitarian concept.
Monero does not disclose the identity of senders and recievers to third parties, it allows for the creation of stealth addresses.
How monero works
Monero happens to be one of the best cryptocurrency blockchain networks that give unlimited privacy, unlike bitcoin transactions that are mostly registered on the public network making them accessible to the public. Privacy is possible on Monero via concepts named "Ring signatures" and "stealth addresses". This ring signature makes sure that buyers and senders' identity are kept hidden from other group participants. This signature works anonymously among the group members when performing a transaction.
The ring signature hides the sender’s identity making it impossible to know which of the group member’s keys was assigned to producing a complex signature. There is additional privacy that was added to this platform which is stealth address, this addresses generally randomize addresses used for a user which are created when making a transaction on behalf of the user.
Mining Monero
Monero has a simpler mining algorithm which is superior to all other crypto mining. This mining gives its user the ability to mine Monero on less complex devices such as their mobile phone or laptop without monitoring it. Bitcoin mining makes use of mining hardware that is custom made for mining, using up more energy, and very expensive.
Monero mining algorithm Randon X is proof of work consensus was basically designed specifically for miners to have a higher mining space and speed which may be two times of bitcoin mining. Monero also gives the miners the opportunity to leave their mining software working while they are not accessing the PC. Mining Monero doesn’t require you to buy an ASIC in other to mine.
What does it take to mine Monero?
Mining Monero is a bit profitable but before such can happen, there are many factors to be considered
- Hash rate: how strong and powerful is your computing hardware
- Power consumption: the total amount of electricity your hardware can consume
- Cost of the electricity: the total amount your electricity bill cost over the said period of time
- Pool fee: the certain fee you are to pay before joining a mining pool.
- How much it's going to cost you for setting up the hardware
Monero block size limit
There is a slight difference in the block size limit between Monero and Bitcoin. Monero processes its block in an average of 2 minutes while Bitcoin processes its block every 10 minutes but the huge difference there is that when a block has been processed in an average of 10 minutes Bitcoin might encounter an issue when there is no more space in a block resulting in a delay of the transaction while Monero is so advance that it will automatically adapt or expand its block volume and has been prepared for future block expansion which makes the volume of a particular block to increase. The more you have to upgrade bitcoins block size the higher the transaction fee you have to pay and this doesn’t happen when mining Monero.
Market Analysis of Monero
- Current Price (time of writing) - $302.76
- Market Cap - $5,438,469,604 (10.72%)
- Fully Diluted Market Cap - $5,451,109,853 (12.77%)
- Volume (24h) - $412,536,413 (58.77%)
- Circulating Supply - 17,923,761.22 XMR
Source: coinmarketcap
Where to Trade Monero
Monero can be traded on several exchanges. These exchanges can be seen on https://coinmarketcap.com/currencies/monero/markets/
It can be traded on Binance, Kraken, Huobi, and many more.
Describe the steps in creating a wallet for the Privacy Coin of your choice. (Screenshot required)
To create a wallet, I visited https://www.getmonero.org/ and clicked on the downloads option.
I will be downloading a mobile wallet, so I clicked on the Mobile & Light Wallets options, so as to see the various mobile wallet available.
On the mobile wallet page, I clicked on "Mymonero". and I download the wallet on Playstore
To download the wallet on PlayStore, I install the wallet on my mobile device.
Open the Monero app and click on create a new wallet.
Pick a username and a preferred color
Accept terms of service which include keeping the mnemonic safe.
Create new passwords or pin for the wallet.
The wallet is created.
Explain the reason you chose the Privacy Coin. (State the advantages and disadvantages)
Advantages
- Privacy of the entity behind the wallet.
- Fungibility
- It can be mined with simple computing powers
Disadvantages
Although Monero has a lot of uses and advantages I think it's got a little challenge that I think they will have to work on as time goes on. Truly its non-traceability is a good thing but people are making use of that to make use of it for disreputable purposes and making use of it in questionable places like in gambling and those in drugs also make use of it so as not to trace the transaction back to them. Law enforcement agencies actually thought the sole purpose of Monero is to evade the law and perform illicit activities just because is nontraceable.