Monero was recently thrust into the spotlight following the Optus data breach which exposed 10 million customer accounts. The hackers responsible for the attack demanded a ransom of $US1 million in Monero cryptocurrency, in exchange for not selling the stolen data. But why Monero (XMR)?
Traditionally, all crypto transactions, whether made on Ethereum or Bitcoin, are designed to be traceable and available to all. Monero is attempting to change this. Using new technology known as cryptography, Monero hides users’ transactions and wallet addresses from the public eye. This total privacy is a relatively new practice, which, despite its correlations with some criminal activity (more on that later), is available to all crypto investors.
The Monero (XMR) cryptocurrency is changing the market by offering something most cryptocurrency cannot: privacy. But is Monero (XMR) good for the everyday investor?
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History of the Coin
Not everything is known about the history of Monero. While it shares similarities with Bitcoin in the sense that it was borne of a small online project, the creators themselves have never revealed their real names. One person, self-titled ‘Thankful_for_Today’, is often credited as the main developer; however, this person no longer appears to supervise the network.
In 2013 the CryptoNote protocol was published by Nicolas van Saberhagen, which founded many coins including Bytecoin. ‘Thankful_for_Today’ reportedly took the most valuable features of Bytecoin and formed a community-driven development team, to integrate these features into a new project.
BitMonero officially launched in 2014. Although its name was soon shortened to ‘Monero’ meaning coin in Esperanto (a constructed auxiliary language). And, in 2017 Monero underwent updates to improve its confidentiality, which transformed it into a notable ‘privacy coin’.
Features of Monero
At the time of writing in late October, Monero (XMR) is worth US$143.35 according to CoinMarketCap data. Monero’s market capitalisation (market cap) currently sits at US$2,651,700,339. Market cap is a cryptocurrency’s current price multiplied by its circulation supply.
Monero has experienced a downward value trend in the past year. However, all cryptocurrencies across the board have experienced these lows lately. This is likely due to what is known as a ‘crypto winter’, which is an extended period of low prices. While performance trends are valuable to consider when investing, the features of a coin are arguably more important. Lets break down some of Monero’s defining features.
Privacy
Monero’s ability to offer wallet address and transaction privacy is made possible through a small collection of keys, and ring signatures. This tech is known as Cryptography.
There are three necessary keys Monero users receive: a public key, a private spend key and a private view key. When you open a wallet with Monero these will be created automatically, further securing your account. The private view key simply allows you to view your transactions, a public key is for receiving payments and a private spend key is for sending payments. A large string of impossible to guess numbers constitute each key.
A Ring Signature is a Cryptographic digital signature, and the key to Monero’s operations. It functions by obscuring the input side of a transaction, making it near impossible to determine who signed the transaction and thereby protecting the sender’s identity. At the same time ring signatures can easily verify the authenticity of a signature.
How it is Mined?
‘Crypto mining’ is the process of receiving new coins as payment for verifying blockchain network transactions. Crypto miners are typically tasked with solving a variety of intricate cryptographic puzzles and recording investor transactions on the ledger. This incentivised procedure upholds the security of crypto networks.
Monero is considered by many to be one of the simpler coins to mine, as it does not require the miner to have any specialised hardware. Therefore, anyone with the appropriate know-how can earn an income through the mining of XMR. Monero aims to maintain egalitarian mining into the future. So, if you have an interest in learning to mine crypto, Monero may be a good starting place.
Link to Ransomware
Unfortunately, the recent ransomware attack on Optus was not the first example of hackers requesting Monero payouts for criminal behaviour. A 2021 CipherTrace report titled ‘Current Trends in Ransomware’ found that a minimum of 22 of the more than 50 ransomware groups would only accept Monero.
Privacy coins are notorious for their links to the black market and ransom activity. Whilst this has little effect on the everyday investor, it is worth noting the levels of scrutiny privacy coins face. While regulatory action around Monero and other privacy coins is not yet significant, governments are likely to attempt to use their full power to restrict the criminal activity surrounding anonymous crypto.
How it is Performing?
As mentioned, Monero did not escape the crypto winter. In fact, the past year has not been overly successful for the price of XMR according to CoinMarketCap data:
The above graph shows price performance in USD. Meaning, with the current value sitting around US$145.79, Australian investors can expect to pay approximately AU$227 for Monero. This bear market can be positive for new investors, however.
If you are looking to buy the dip in the market, it is imperative to ensure you are properly educated before investing. Also keep in mind the volatility of crypto as an investment—a coin’s positive history is not indicative of its future performance.
Does Monero Have a Future?
It is extremely difficult to accurately predict the future performance of any cryptocurrency. The crypto market is rife with volatility. This is partly since crypto is a young currency, and its value is primarily dependent on investor demand.
Despite this, crypto analysts seem relatively optimistic regarding Monero’s future performance. As Monero is still holding the title of ‘leading privacy coin’ it seems fair to assume that it has more to offer the market and is unlikely to drop off anytime soon.
This article is not an endorsem*nt of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency as an investment class.
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Frequently Asked Questions (FAQs)
How many Monero coins are in circulation?
At the time of writing, Monero has a circulating supply of 18,189,118.23 XMR. This number can fluctuate depending on mining and minting activities, as well as any potential token burning (which removes coins). As Monero approaches the 18.4 million XMR mark, the rate of new coins added will decrease.
Is Monero a good Investment?
It is solely up to you, and potentially your financial advisor, to determine whether a crypto investment will be ‘good’. You can only ascertain whether Monero (or any crypto) will be a valuable investment by conducting your own, thorough, research. Always keep in mind the volatility of the market when making any investment.
Where can you buy Monero (XMR) in Australia?
Monero (XMR) can be bought from most Australian decentralised exchanges, such as eToro or CoinBase. It is important that you do your research on any exchange you engage with. Once you decide on an exchange, there are plenty of useful guides online regarding how to buy cryptocurrency in Australia.
How is the Monero network secured?
Monero transactions are cryptographically secured. This means that its network uses a combination of the most resilient encryption tools, and vigilant crypto miners to disguise an investors transactions and wallet address.
As a seasoned cryptocurrency expert deeply immersed in the intricacies of blockchain technology and digital assets, I bring a wealth of firsthand knowledge and a profound understanding of the dynamics shaping the crypto landscape. My experience extends across various cryptocurrencies, including an in-depth comprehension of privacy-focused coins like Monero (XMR). I've closely followed the evolution of Monero and its impact on the market, delving into its features, historical context, and potential future developments.
The recent Optus data breach and the subsequent demand for a $1 million ransom in Monero thrust the cryptocurrency into the limelight, highlighting its unique attributes. Monero distinguishes itself by offering unparalleled privacy features, a departure from the traceable nature of transactions on major cryptocurrencies like Bitcoin and Ethereum. Utilizing cutting-edge cryptography, Monero shields users' transactions and wallet addresses from public scrutiny, establishing a new standard for privacy in the crypto space.
The history of Monero is shrouded in mystery, much like its transactions. While inspired by the CryptoNote protocol published by Nicolas van Saberhagen in 2013, the true identity of Monero's creators remains undisclosed. The currency, originally launched as BitMonero in 2014, underwent updates in 2017 to enhance its confidentiality, solidifying its status as a prominent "privacy coin."
Monero's market performance, measured by its current value of $143.35 and a market capitalization of $2,651,700,339, reflects the broader trends in the cryptocurrency market, which has faced a challenging period colloquially termed the 'crypto winter.' However, the value of Monero is not solely indicative of its appeal to investors; its defining features, particularly its privacy-centric technology, make it a standout asset in the crypto sphere.
Privacy is at the core of Monero's functionality, facilitated by a sophisticated cryptographic setup involving public keys, private spend keys, and private view keys. The innovative use of ring signatures obscures transaction inputs, making it nearly impossible to trace the sender's identity while maintaining the authenticity of the transaction.
In terms of mining, Monero stands out for its accessibility, requiring no specialized hardware. Its commitment to egalitarian mining aligns with the cryptocurrency's ethos of inclusivity, allowing anyone with the requisite knowledge to engage in mining and earn XMR.
However, Monero's association with ransomware attacks, exemplified by the Optus incident, underscores the scrutiny privacy coins face due to their potential links to criminal activities. While Monero has not escaped the broader market downtrend, crypto analysts remain optimistic about its future performance, considering its continued status as a leading privacy coin.
In conclusion, Monero presents a unique value proposition in the cryptocurrency landscape, offering unmatched privacy features. Its historical evolution, distinctive features, and market performance, despite challenges, position it as a noteworthy asset for those navigating the dynamic world of digital currencies.
For readers seeking guidance on Monero as an investment, it's crucial to conduct thorough research, considering both market trends and the specific characteristics of the cryptocurrency. As the crypto market is inherently volatile, a comprehensive understanding of the risks and rewards is essential for informed decision-making.
