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Monero Cryptocurrency – Does it tackle anonymity?
At its official website Monero, is presented as a secure, private and untraceable cryptocurrency. Monero uses a special type of cryptography to keep all transactions 100% untraceable and hence, anonymous.
Even though bitcoin is said to be an “anonymous cryptocurrency”, it’s not absolutely true. Read more to find out what is the difference between the two currencies.
In a nutshell, Monero is open-source and accessible to all. It doesn’t use any central server to record all transactions. One of the main benefits is low fees. The more transaction in the network, the lower the fee. All transactions are stored in two-minute intervals into a block and then put together into a blockchain – similar to litecoin. Transactions are validated through mining, the same as other major cryptocurrencies.
History of Monero
Everybody knows that Bitcoin was created in 2009. In 2020, it was followed by a “rival” Bytecoin, the first real implementation of CryptoNote. (CryptoNote is an underlying protocol used for the creation of numerous cryptocurrencies, very similar to the one used for bitcoin).
The problem was that 80% of coins were pre-mined by the authors of this cryptocurrency. This was bad news for Bytecoin. Therefore, it was decided to split the currency and create a new coin called Bitmonero, later shortened to Monero. This new blockchain adds a new block every two minutes, about five times faster than bitcoin.
Monero is controlled by a core team of seven developers, five remaining in anonymity and two revealing their identity: Davida Latapie, and Riccardo Spagni.
What is so unique about Monero?
Monero has become popular thanks to a few unique features:
- Your money is only yours.
It’s only you who controls your transactions. Your identity is secured and nobody can track down what you used your money for, where you got it and how much of it you have. Unlike bitcoin.
- Monero is ASIC resistant.
It doesn’t mean that it’s resistant in the true sense of the word. Given Monero’s underlying algorithm CryptoNote (using a hash system called CryptoNight), the ASIC miner would be so expensive that the production would not pay off.
Monero vs. Bitcoin
As opposed to bitcoin boasting its openness, which means that your transactions can be tracked down to the origin by anyone anytime, Monero’s mission is to be absolutely anonymous. All transactions are hidden. No miner, government, police, not even your mum will see any of them.
The blockchain of Monero has no limit and is dynamically scalable. Unlike bitcoin, Monero has enjoyed a long-term and stable growth. New coins are being pumped into the network. Monero supports only few hardware wallets. The transactions fees are low. While in bitcoin the fee grows with the number of transactions, in Monero this is the opposite.
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Monero price / value
As already mentioned, Monero has been steadily growing for a long period of time. It was created after a fork from Bytecoin. The mining time was reduced from 120 to 60 seconds and the reward for mining a block halved. Later the mining time was set back to 120 seconds and the reward doubled. After the launch, speculators made the value plummet to a few dollars. Lower demand resulted into a fall. Few months later, the crypto recovered and stabilised at 0.5 USD/ XMR. In the next year, the value of XMR oscillated between 0.2 and 1 dollar.
2020 was a breakthrough year. The rate grew sharply mostly due to illicit trading at AlphaBay. In 2020, the value skyrocketed by 2760% (bitcoin 119%). The upward trend went on in 2020. In late May, the company admitted that there was a big flaw in the system enabling to generate an unlimited number of coins. The market reacted by falling from 60 to 30 dollars. After that the rate quickly returned to the previous level and continues to grow.
Where and how to buy Monero
You can buy Monero online via exchanges such as Bitfinex or Binance or through mining. To keep your coins safe you can download a wallet onto your PC or use a web wallet My Monero. There are also various wallets for smartphones but these are not trustworthy. When creating a wallet you will get a private key that you must keep in a safe place. Monero is divisible into 12 decimal places. The smallest unit is piconero. It is estimated that within the next eight years, the number of coins will reach 18.4 million.
More about the author J. Pro
Unlike Stephen (the other author) I have been thinking mainly about online business lately. I wasn’t very successfull with dropshipping on Amazon and other ways of making money online, and I’d only earn a few hundreds of dollars in years. But then binary options caught my attention with it’s simplicity. Now I’m glad it did because it really is worth it. More posts by this author
Monero vs zcash vs dash: which is the most anonymous cryptocurrency?
Bitcoin has been praised for its improved security over traditional currencies. However, using bitcoin is definitely not the most private or anonymous way to carry out transactions. The creators of some altcoins have stepped up to attempt to provide a form of digital currency that offers more privacy and anonymity.
Dubbed ‘privacy coins,’ these altcoins are often associated with darknet markets and illegal activities, but there are plenty of legal reasons for wanting to maintain privacy. Whether you want to keep personal transactions private or you run a business and need to conceal transactions from prying eyes, anonymity is key.
With privacy coins becoming increasingly advanced, you have plenty of options. Monero, zcash, and dash are three of the most popular altcoins that offer superior anonymity to bitcoin. They each have their own pros and cons and there is debate about which is the most anonymous. In this post, we explore each of these altcoins and compare them to decide which offers the best option for those seeking more anonymity.
Anonymity of cryptocurrencies
Before we jump into the three altcoins, we’ll take a look at the meaning of anonymity in terms of cryptocurrencies. Since it’s the most widely known cryptocurrency, bitcoin serves as a good point of reference.
Bitcoin is lauded for providing improved security over fiat transactions. When we talk about security here, it essentially refers to the difficulty involved in someone stealing or copying coins. The improved security is due to the nature of blockchain technology. It would take a group of miners with at least 50% of the mining power to include a false transaction in a block.
Every block in the chain includes the hash of the last, which makes changing past blocks extremely difficult. So with each block that is added to the chain, every past transaction becomes increasingly secure. Even the latest block to be added to the chain would be difficult to tamper with and each one before it more so. Security has been improved upon with some altcoins but bitcoin is still considered solid from this standpoint.
Bitcoin lacks privacy and anonymity
On the other hand, it’s largely agreed upon that bitcoin isn’t all that private or anonymous. Every transaction, including the wallet addresses of the sender and recipient, amount, date, and time, is stored on a public ledger. It can be considered pseudonymous because names aren’t actually listed, but it would be fairly easy to trace most wallet addresses to their owner using clues like IP address and transaction history.
While it is possible to make bitcoin transactions more anonymous, it does require a fair amount of effort in the form of coin mixing. In the context of bitcoin, coin mixing is often referred to as coin tumbling or laundering. It involves mixing coins from multiple parties in order to break the connection between the sender and recipient. If done properly, it can make transactions virtually impossible to trace.
Bitcoin Blender is one popular service for mixing bitcoins.
To mix coins properly involves various steps including creating multiple fresh wallets with new burner email addresses. The process can be cumbersome and time-consuming, especially if you’re mixing on a regular basis.
For ongoing anonymity, it makes more sense to go with a cryptocurrency that provides an in-built option for anonymous transactions without the added fuss. Even with these, you likely still need to take additional precautions such as using an anonymizing browser like Tor.
Bitcoin isn’t fungible
One more problem with bitcoin we haven’t yet addressed is its lack of fungibility. When a coin is fungible, every unit is interchangeable and doesn’t have a particular history tied to it. Since every bitcoin is traceable (unless it has been mixed), some bitcoin could have a lower perceived value than others if it has been used in something illegal, for example, a theft, hack, or ransomware attack. This is known as ‘taint.’
Improvements made by the creators of some altcoins to make the cryptocurrency more anonymous also makes it fungible. This way, users don’t have to worry about tainted coins and subsequent loss of value or rejected transactions.
Why you might want anonymity
As mentioned earlier, privacy coins have been linked to criminal activity, from tax evasion to drug dealing, but there are plenty of legal reasons for wanting to keep transactions anonymous. You probably wouldn’t want the world to be able to view your bank statements and cryptocurrency transactions shouldn’t be any different.
A couple of specific cases in which you may want to go anonymous are when paying for a private medical procedure or service, such as cancer treatment or psychotherapy, or making an anonymous donation to charity.
There are also various general reasons you may want to maintain anonymity:
- Stop advertisers building a profile around your spending habits
- Keep your net worth under wraps
- Prevent malicious hackers and other cybercriminals accessing your information
- Simply prevent the world from seeing where you shop, eat, and vacation
And these are just on a personal level. The implications for businesses dealing with things like trade secrets or a private list of clients could be much broader.
Monero vs zcash vs dash
Now that we know what we’re looking for in terms of anonymity, let’s see what these three coins have to offer.
Dash is one of the older altcoins on this list, having been launched in 2020. It was originally named xcoin, then darkcoin, before becoming dash in 2020. It is known for its fast transactions speeds, a quick four seconds compared with bitcoin’s ten minutes. One might assume that’s where the name came from, but dash is simply short for ‘digital cash.’
Dash has other factors that differentiate it from the bitcoin network, including how decisions are made. Any changes to bitcoin require unanimous approval from members of the network. Dash instead uses a voting system which means that changes can be made quickly.
Another notable difference between this altcoin and bitcoin is the operation of the network. There are two main tiers, the miners and the ‘master nodes.’ The miners carry out similar functions to those in the bitcoin network. The master nodes are responsible for governance functions and for carrying out special transactions — InstantSend and PrivateSend.
InstantSend enables near-instantaneous transactions and is claimed to prevent double-spending, a potential problem with other cryptocurrencies. Regular block times are two and a half minutes whereas InstantSend transactions can be processed in under a second.
Dash is traded on various exchanges and is included in many cryptocurrency payment networks and debit cards. It can also be found in certain US ATMs and at post office branches in Austria. It’s the most widely adopted (mainstream) cryptocurrency of the three.
Dash privacy and anonymity
PrivateSend transactions are where dash gets its reputation for being one of the most anonymous altcoins available. This privacy initiative uses coin mixing to improve anonymity. As mentioned earlier, mixing bitcoin can be a bit of an inconvenience, especially if done regularly.
In the case of dash, when users take advantage of the PrivateSend function, the mixing is carried out for them and coins are deposited in new addresses. By the end of the process, the origin of the coins is obfuscated. This also makes the currency somewhat fungible, but only when PrivateSend is used.
PrivateSend can be initiated at the click of a button, but there are fees involved. (Source: Dash)The main questions here pertain to how reliable this service is and whether it will really help you remain anonymous. One of the main critiques is that you can still see the receiver of the coin. The whole network isn’t private, just the PrivateSend function. So if you send coins, you’re reliant on the recipient of the transaction using the PrivateSend feature if you want to break the connection. Basically, if anonymous transactions are connected to non-private ones, there’s potential they could be traced.
Monero was created in the same year as dash and origniated as a fork of bytecoin. There was some negative press surrounding bytecoin at the time, with critics dubbing it “shady.” This was mainly due to the fact that a large majority of coins were pre-mined and granted to an unknown group of creators and stakeholders.
Nonetheless, monero, which is based on the same CryptoNote protocol that bytecoin was, gained popularity fairly quickly, its market cap peaking (subject to the time of writing) at almost $7 billion at the beginning of 2020. In fact, it was the best performing cryptocurrency of 2020 in terms of market cap, although this has been attributed to its popular use in criminal activity.
The network is based on blockchain technology similar to that of bitcoin, with one of the main differences being that blocks are mined every two minutes. Although it has gained most of its fame from its privacy features, monero does address usability issues inherent in some networks. For example, instead of simply having a cap on block size, it issues penalties to prevent miners from trying to manipulate the system.
Monero is difficult to purchase with fiat currencies although it is traded for both EUR and USD on Kraken and for USD on Bitfinex. It can be found on multiple exchanges for purchase with other cryptocurrencies. Some merchants accept monero as a form of payment and it’s included in various coin payment platforms such as Binance and Evercoin. As mentioned, the place you’re most likely to see it accepted directly is within darknet marketplaces.
Monero privacy and anonymity
Confidential transactions were introduced to the monero network at the beginning of 2020 through the use of ring signatures as an optional part of the protocol. They became mandatory in September 2020.
A ring signature involves additional possible senders (mixins) for each transaction. This means that the actual sender could be one of two or more people. What’s more, transactions are broken up into separate amounts so that one transaction actually occurs as multiple, going to different ‘stealth addresses.’ This negates the possibility of someone tracing a sender or recipient based on personal details attached to their wallet address. However, critics have identified flaws in the system and claim that transactions can be traced.
A potential issue if you’re thinking about using monero is that it’s getting a bad reputation for increased popularity with criminals. It was reportedly the ransom currency of choice in the Wanna Cry ransomware attack of 2020 and has been a feature of other major attacks since. That being said, its widespread use in criminal activity is actually considered testament to its privacy and anonymity. Monero is fungible so tokens don’t lose their value if they’ve been used in shady transactions.
Bear in mind, similar negative press has been earned by bitcoin in past years. Plus, given the chance, a newer coin like zcash could be catapulted to notoriety within the criminal underground very soon. The point is, if something can be used for both good and bad, it likely will be.
Zcash is the youngest of these three privacy coins, having only been around since October 2020. Developed by a reputable team of scientists and cryptographers, it didn’t take long for this coin to join the wave of crypto success stories and reach a peak of more than $2.5 billion in market cap earlier this year.
It hasn’t exactly made its way into the mainstream just yet, but it can be exchanged for fiat currencies on a few exchanges including Kraken, Bitfinex, and CEX.io. It can be easily purchased with other cryptocurrencies on exchanges like Binance.
Zcash privacy and anonymity
Zcash claims to be more secure and private than bitcoin due to its “zero-knowledge” ledger. Instead of displaying the identities of senders and recipients along with amounts, the ledger only shows the time a transaction took place.
The network is based on zk-SNARKs, a form of cryptography that uses zero-knowledge proof. In the most basic terms, this means that transactions can be verified simply based only on true-false statements. Zcash was the first major cryptocurrency to use this protocol, although others including Ethereum have followed suit. Like dash and monero, zcash is fungible.
Overall, this cryptocurrency does seem to have the most promise when it comes to anonymity. Even privacy advocate Edward Snowden tweeted that:
“Zcash’s privacy tech makes it the most interesting Bitcoin alternative. Bitcoin is great, but “if it’s not private, it’s not safe.”
Zcash emphasizes in its FAQ section that there is more of a focus on privacy than anonymity per se. It mentions that while IP addresses aren’t protected, use of an anonymizing network like Tor can complement its privacy features.
In another FAQ answer, zcash alludes to the improved privacy it holds over dash PrivateSend transactions. While it doesn’t outright mention the other cryptocurrency, it compares a pool of 20 million senders to that of three (which happens to be the number involved in a dash transaction). Indeed, monero also appears to be hampered by a similar issue since its ring signatures contain a limited number of mixins. Zcash basically argues that a larger set size is better, which of course makes sense.
There has been a bit of skepticism regarding the strength of this altcoin’s underlying protocol, but without solid proof, it’s hard to determine if this is simple bias. There have been attempts to audit the system but even those are deemed to provide additional assurance rather than substantial evidence.
Dash vs monero vs zcash summary
All of these cryptocurrencies offer advantages over bitcoin when it comes to privacy and anonymity. So which one should you choose?
- Dash: This altcoin is more accessible and widely accepted (outside the darknet) than the others. But it only offers increased privacy and anonymity through its PrivateSend feature. This could be a more suitable option for those looking for something that is easy to spend and who need occasional anonymity.
- Monero: This coin is hampered by a bad reputation and accusations that transactions are traceable. Although, it has been in use for a relatively long period and has proven success in marketplaces (albeit some illegal ones).
- Zcash: This one provides increased privacy through its underlying protocol, meaning less traceability. If used properly, i.e. with an anonymizing browser, it appears to be the most anonymous option overall. But it doesn’t have experience on its side which may put some users off.
Your choice could depend on various factors, including your use case or even how much faith you have in the creators of each coin. It’s worth bearing in mind that the protocols and systems behind each coin are in constant development. As such, one that is missing the mark right now might be rolling out improvements very soon. Indeed, if you take a look at forums on the topic, you’ll find some ongoing debates about which offers the most privacy and anonymity.
Disclaimer: We do not condone the use of any fiat or cryptocurrency for the purposes of illegal activities. Additionally, the information in this article should not be interpreted as a recommendation to invest in cryptocurrencies. This is a risky and volatile market and anyone thinking about investing should complete their own due diligence beforehand.
Monero vs Bitcoin: Privacy Coins Comparison #1
This year is considered the year of cryptos focused on privacy and anonymity of the coin holders. There are several anonymous coins and we’ve posted a small comparison of Monero vs Verge previously. Now we’d like to compare our favorite Monero vs Bitcoin, the Cryptocurrency King.
Privacy coins evolved essentially from the Bitcoin as the answer for public demand for the truly anonymous cryptocurrency. Let’s start with the definition of an ‘anonymous cryptocurrency’:
Anonymous cryptocurrency is a privacy coin that inherits the basic blockchain features* and secures the identity of a coin holder.
*Basic blockchain features are:
– Immutability of data
– Participants must reach a consensus before any data is added to the blockchain
Why Bitcoin (BTC) isn’t anonymous?
Bitcoin transactions are broadcasted publicly on blockchain and contain some additional information about the sender and recipient. This way your ID can be revealed simply if you buy a product or a service with your bitcoins that has your personal data like IP address, email, anything similar that links directly to you.
Some advanced security techniques may hide your identity, but make just one mistake and that’s it – your wallet is compromised and previous transactions signed by your private key are connected to you. Thus said, Bitcoin (BTC) is a pseudonymous cryptocurrency.
What about the privacy of Monero?
Monero (XMR) transactions are stored publicly on blockchain as well, however, the sender address is hard to reveal. First, every wallet has the option called Stealth Address. It is a unique wallet address that can be used for each transaction you make.
Secondary, there is a built-in option called RingCT or Ring Confidential Transactions, a Monero analog of Bitcoin mixing services. Mixing = Signing transactions by a group of spontaneously chosen XMR owners with the same amount of coins. In result, a transaction is signed, but no one can tell who exactly did it.
The third privacy feature is the Kovri project, a special security layer protocol based on I2P’s features: garlic encryption and garlic routing. Works the same way as onion routing in the infamous Tor Browser.
“In an onion network, messages are encapsulated in layers of encryption, analogous to layers of an onion. The encrypted data is transmitted through a series of network nodes called onion routers, each of which “peels” away a single layer, uncovering the data’s next destination. When the final layer is decrypted, the message arrives at its destination. The sender remains anonymous because each intermediary knows only the location of the immediately preceding and following nodes.” – wikipedia.org [https://en.wikipedia.org/wiki/Onion_routing]
The Kovri project alpha release date is unknown. Still, you can observe the development process and even read developers meeting logs at the official Kovri’s project website.
XMR vs BTC: Exchange rates & Fees
Monero currently is the top 10 cryptocurrency based on total capitalization ($4,5 billion). XMR trading is available on 20+ exchanges, including major ones (Bitfinex, Poloniex, HitBTC, Bithumb).
On the other side, It’s hard to find at least one cryptocurrency exchange that doesn’t list BTC and his position on the market is indisputable, for the time being.
The price of XMR does not depend on any of the real assets (like Ripple, Tether or SONM, for example), so the price depends on the popularity of the currency. BTC does the same and its exchange rate depends on supply and demand.
Monero (XMR) current tx fee: $2
Bitcoin (BTC) current tx fee: $1.28
However, when the hype is strong fees grows exponentially.
Max. BTC tx fee: $55
Max. XMR tx fee: $20
These coins are different in their core missions. Bitcoin was adopted by masses because it was the first coin and its mission was to create a “Peer-to-Peer Electronic Cash System”. Monero was born on a different field as “the leading cryptocurrency with a focus on private and censorship-resistant transactions”.
In short, Bitcoin is the King and Monero is the Anonymous King. Do you agree?
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