What is Monero (XMR)?

Written by Evgenia Sidorova
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This cryptocurrency Monero was created on 18 April 2014. The developers have focused on maximum anonymity for all transactions, which has attracted the attention of darknet users.

For the first time, this protocol was used in Bytecoin cryptocurrency back in 2012, but due to the unusual dispersal of tokens during pre-mining, its developers were accused of scamming. The result of the criticism was a restart of the network by way of a hard fork, which resulted in the Bitmonero cryptocurrency being spotted. Later, due to marketing, the prefix “Bit” was removed from the name. For example, the only known anonymous cryptocurrency in the world, Monero, emerged.

Who are the founders of Monero?

Monero was developed with 7 founders, five of whom chose to remain anonymous.

The origins of XMR can be traced back to Bytecoin, a decentralized privacy-focused cryptocurrency that was launched in 2012. 2 years later, a Bitcointalk forum member, known only as thankful for today, bifurcated the code base BCN, and Monero emerged. They proposed “controversial changes” to Bytecoin, which other members of the community disagreed with, and decided to arrest the matter in their own hands.

Monero: why is it unique?

First and foremost, the inexhaustibility of the tokens is worth noting. Unlike Bitcoin, whose total amount is limited, even after the main issue runs out, miners will receive 0.6 XMR for each block they complete. This means that there will always be someone to keep the system running smoothly.

The second characteristic of Monero is the high level of anonymity. Payments cannot be traced, thanks in large part to the circular signature system. Transaction mixing is available to users of almost all cryptocurrencies, but in this one, it occurs at a system level. It is virtually impossible to trace who transferred tokens to whom, when, and how much. In addition, wallets use hidden addresses: each wallet is assigned two keys, one for browsing and one for transactions. This means that the system cannot track how much money has reached each particular wallet.

The third distinctive feature is the decentralized storage of data, through the use of blockchain technology, just like the Bitcoin network. However, a Monero data block takes up to eight times as much space as Bitcoin.

The cryptocurrency’s anonymity has attracted attention not only from users but also from law enforcement agencies. The latter has suggested that the tokens could be used to pay for illegal goods, such as weapons and drugs, and have voiced concerns about the platform’s growing popularity. At the same time, many experts consider the assessment of Monero’s anonymity to be overstated. In particular, Edward Snowden called the cryptocurrency “amateurish”.

But not all cryptocurrency users buy guns. Monero is accepted by many online casinos, as well as MMORPG games. Many users prefer the currency because it’s easy to mine.

Because Monero does not use a hashing algorithm like SHA256 or Scrypt, it cannot be mined using ASICs. However, its CryptoNight algorithm makes it popular for mining by ordinary PC owners, who pool together and make sure that the system runs smoothly to their advantage.

Mining will require a more or less powerful PC, a mining app that can be found on the platform’s website, a dedicated wallet and the selection of a suitable pool. You can install and configure your equipment in about 10 minutes. And you can start mining coins, which have a smoothly decreasing issuance rate.

Monero: how many coins were issued?

Like most digital assets, Monero has a finite issue – the maximum amount of coins issued. The issue must be finite so that the coin does not depreciate and continues to exist even after the end of the issue. Unlike fiat money, Monero issuance is decentralized and has no external regulator. This means that once a certain number is reached, no one can issue a couple of million additional XMRs.

But there are exceptions to every rule. The initial issuance of Monero is 18.4 million coins. As of 2019, miners have mined approximately 17 million XMR, and there’s no intention of stopping. So, more than 90% of the total issue has already been released.

To avoid a repeat of Bytecoin’s fate, Monero will switch to a tail emission algorithm when it reaches 18.4 million coins. The new protocol implies that miners will receive a reward for each block of 0.6 XMR. According to the developers, this will support the overall stability and security of the network. Given the additional revenue from the commissions, the profitability of mining will remain, although most of the farms will switch to mining other cryptocurrencies. The target of 18.4 million coins produced is expected to be reached by 2022.

Such an algorithm will be an alternative solution to the Bitcoin network’s issuance problem. So, once the first cryptocurrency reaches 21 million units, rewards to miners will cease. All that will be left for ASIC processor holders is to be rewarded with a commission. Monero decided to keep the reward for solving the block so that miners would not lose interest in mining the cryptocurrency.

Monero: how is it secured?

Very few vulnerabilities have been found in Monero. In the history of hacking attacks on the network, it has never been on the verge of failure, although serious bugs have been discovered at the end of the attacks. The Proof-of-Work system and blockchain ensure that transactions are not tampered with or serious DDoS attacks.

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