Monero (XMR) cryptocurrency has become well-known mainly because of its features that focus on enhancing privacy. Its market capitalization soared to a whopping $5.3 billion in August 2021 from $1.58 billion last year. On that date, Monero’s closing price was $295.05 while it was only $89.12 on the same day last year. No wonder the cryptocurrency has a track record of being one of the 30 most popular digital currencies in the decentralized finance industry. Monero can be traded on widely known digital currency exchanges such as Bitfinex, Kraken, and Poloniex.
Launched in 2014, Monero is a CryptoNote based open-source decentralized protocol. It aims to alleviate privacy issues with its opaque configuration that gives anonymity to transaction details. It uses not only “stealth addresses” but also ring signatures and zero-knowledge protocol to conceal transaction details. Stealth addresses can hide the destination address, thus mask the recipient’s identity. Ring signatures are virtual signatures from a participant. They add another tier of privacy to a transaction since they don’t disclose the identity of the participant who signed the contract.
The network also doesn’t track transaction history, making way for participants to operate in a much safer environment. These privacy attributes have drawn cryptography and privacy-enhanced technology enthusiasts. Another notable feature of Monero is fungibility. This allows the replacement of two currency units with no particular distinguishing features.
The downside of Monero is that these privacy features enable exploitation for illicit transactions including laundering, gambling, and drug trafficking.
Mining on Monero
Monero supports a mining protocol that gives rewards to participants for their activities, whether they’re doing it individually or by joining mining pools. Mining can be done even on a regular computer with no specific hardware requirements such as the ASIC which is in use by some other cryptocurrencies. The protocol operates on major operating systems such as macOS, Android, Windows, and FreeBSD.