Monero (XMR): Enabling Private and Anonymous Transactions

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Altcoins
Monero (XMR): Enabling Private and Anonymous Transactions

Monero (XMR) addresses the following important functions for the entire segment of crypto tokens: privacy and anonymity. The growing demand for such coins largely reflects people’s preferences of higher privacy protection in the modern world.

What Makes Monero (XMR) Unique?

Monero (XMR) is arguably the most successful crypto project in terms of promoting anonymous transactions. While Bitcoin and most other cryptocurrencies rely on pseudonymous transactions, the transparent nature of blockchain allows effectively identifying most crypto users even without any additional comprehensive techniques. For this reason, a large number of users present a higher demand for tokens that can offer a higher degree of anonymity. Monero uses more complicated cryptographic techniques that enable concealing all identity-related clues in regards to both senders and recipients. Thus, Monero appears to be highly helpful for all users regardless of their technical knowledge and ability to utilize additional identity preservation methods. Monero allows making payments quickly and inexpensively without any censorship-related concerns. Ring signatures are used to achieve obfuscation. For instance, most payments are split into numerous chunks to make it more difficult to identify specific users and parties involved in such transactions. Stealth addresses are also created, and they are used only once.

XMR’s current price is $144.41 with the circulating supply of 18.1 tokens. Monero does not have a maximum supply as its supply is regulated on the basis of complicated algorithms that reflect both the demand presented by users and anonymity concerns. The current market capitalization is $2.6 billion, making it the 44th largest cryptocurrency in the market. Monero’s founders also stress that their cryptographic solutions are superior in comparison with the major competitors such as Zcash because competitors’ solutions are only “selectively transparent”. Monero ensures that different transactions cannot be effectively linked to one another, thus ensuring the proper flexibility of all users. Many governments have offered additional remunerations to hackers and IT specialists who can decode Monero’s code. However, all such efforts have proved to be unsuccessful.

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Figure 1. Monero’s Functionality; Data source – Bitcoin Talk

Investing in XMR: Pros and Cons

XMR has attracted additional interest recently as the growing number of users tend to prioritize the highest privacy and anonymity protection. Due to the growing government and censorship pressure, they prefer using such innovative and reliable systems that may allow them to make imminent and private transactions. From a long-term perspective, it appears that the demand for such privacy tokens will continue to increase because most of the existing crypto tokens do not offer the adequate privacy and anonymity protection for their users. At the same time, the short-term dynamics is more uncertain.

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Figure 2. Price Dynamics of STETH/USD (3-Months); Data source – CoinMarketCap

The observed price dynamics follows the horizontal channel with the price range between $140 and $250, reflecting the general instability in the crypto market. There is a high likelihood of the price continuing fluctuating within the same range in the following weeks. However, investors should abstain from opening any long positions until the price exceeds the level of $250, thus breaking the current horizontal channel and indicating the possibility of a rapid price increase in the future.

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Dmytro Kharkov

Holding a Master’s Degree in Finance (Distinction), Dmytro Kharkov has proven expertise in Business Analytics, Data Analysis, and the crypto market. He has completed online courses on Machine Learning and Data Science from the leading universities and online schools. He closely monitors the latest crypto analytics insights from Glassnode, IntoTheBlock, Santiment, etc.