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Monero (XMR): the most anonymous confidential cryptocurrency?

Cryptocurrencies like Bitcoin balance privacy and transparency goals. But in these systems, it must be understood that all transactions are in essence public. This allows nodes in a decentralized network to validate them. With Bitcoin and many other cryptocurrencies, certain information can be tied to identities. Something the creators of Monero wanted “ to correct by offering a completely privacy-focused cryptocurrency. Monero aims to be secure, private and untraceable. However, it would seem that this anonymity is a double-edged sword.

Monero, a privacy-focused altcoin

Monero is a confidential cryptocurrency that surpasses Bitcoin in many ways, including anonymity, security, and scalability. The cryptography of its blockchain ensures that all transactions remain untraceable. Monero was born from a hard fork (i.e. a major upgrade) of Bytecoin (launched in 2012). It is one of the first privacy-focused cryptocurrencies that used the Cryptonote protocol. But it had several major flaws.

Monero entered the cryptosphere after this fork was announced by an anonymous user known as “ thankful for today “. The latter had proposed a series of modifications for Bytecoin which was initially called “ BitMonero “. After passing the first stage of the project, he changed the name of the blockchain to Monero which since then has gained popularity. Monero is a cryptocurrency that lives practically in anonymity. Even most of its development team members remain unknown.

Confidentiality, more than an option

Monero was designed to provide its users with the highest level of privacy. Other confidential cryptocurrencies have emerged but show a clear difference with Monero. With Dash (DASH) and Zcash (ZEC) for example, users have the option of choosing anonymity when transacting. Monero includes this feature by default, making every transaction private. The Monero network hides the send and receive addresses, as well as the transaction amount. And this, thanks to the use of three technologies: stealth addresses, Ring signatures and RingCT.

Monero has become one of the most private cryptocurrencies in the industry. Monero transactions cannot be tracked. However, users can, if they wish, share their viewing keys to make the account auditable. The fact that Monero can be audited gives it legal guarantees. It is at this level that cryptocurrency feels its limits. If anonymity turns out to be a real asset, there is the other side of the coin. Monero has become an asset of choice for illicit finance.

A misunderstood anonymity

Privacy coins, and primarily those from the Monero project, have become popular for ransomware payments, dark web criminal transactions, and money laundering. The anonymity of cryptocurrencies worries the authorities, confidentiality complicating their investigations.

Beyond that, more and more exchanges refuse to support Monero. The platforms talk about the increasing regulatory requirements they face. They want to avoid potential standoffs with regulators. By the way, privacy coins have been banned in some countries like Japan or South Korea.

Conclusion

Monero is an alternative cryptocurrency to Bitcoin with unique privacy features. It particularly attracts those who wish to keep their transactions anonymous. In this regard, the project certainly surpasses Bitcoin. Despite threats from regulators and the massive use of Monero in the Dark Web, the cryptocurrency continues to grow in popularity. In May 2021 for example, the price of Monero jumped 30%. This assumes a significant penchant for confidentiality. All expect regulators to continue to scapegoat privacy coins, however. Their acceptance and liquidity will certainly suffer.

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Source: Cointribune

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