Monero (exchange code XMR) is an interesting currency, to say the least.
It’s different in many ways from anything else you can mine, buy, or exchange. And, in many ways, it looks like the natural progression from the oldest and most well-known cryptocurrency, Bitcoin.
Let’s have a look at 5 things you probably didn’t know about Monero and
mining it, and how they have influenced the growth of this cryptocurrency.
Monero’s Endless Supply
Monero is becoming more and more popular. Part of this is due to the affordability of Monero mining gear. And part of it is the anonymity factor. But there’s one more thing that is making this cryptocurrency more appealing than Bitcoin in some cases.
Everyone knows by now that Bitcoin has a finite supply of coins. A couple of years from now, once the last Bitcoin is mined, who knows what will happen to its market value. It possible that it won’t be as high as it is now and the coin won’t be as appealing to people since there will be a limited investment opportunity. But then a more limited supply can also drive up the price.
Monero has an entirely different strategy. 18.4 million XMR will be the total amount of coins in circulation once the mining stops. However, unlike Bitcoin, Monero doesn’t have a finite supply.
After the mining is over, 0.3 XMR will be added to the pool every minute. This means that Monero is better suited for speculative investment in the long run. Therefore, the inflation rate will also be more reasonable as the cryptocurrency will be sustained by the continuous supply.
The concept of ring signatures is nothing new. In fact, it’s nearly two decades old. It is also the reason why Monero is considered and proven to be an untraceable cryptocurrency. Here’s what ring signatures mean.
When the money is sent, it is seen as a group of randomly picked ring signature transactions of equal amount. Out of all of them, of course, only one signature is that of the real sender.
This enables something called transaction mixing. Because each member within the group of transactions could be the actual sender, it is almost impossible for authorities or other third parties to determine the actual sender.
How does one benefit from stealth address, you might ask? First of all, you should know that stealth addresses don’t influence Monero mining in any way.
What you earn will still be sent to your real address and not someone else’s.
Stealth addresses used in Monero transactions have a different role. They essentially help to hide your account information.
Once you complete a transaction with someone, they know your account number but that doesn’t mean they can get further financial information on you.
The way this works is by creating a new address for each transaction which is not linked to your public address. The addresses created are a one-time deal. Once they’re no longer of use they go away without having an impact on your public address.
Say you’re into mining Monero but you don’t want people to know how much you spend or what you buy with your earnings. That’s the basic charm of cryptocurrencies but Monero’s transactional privacy goes a step further by hiding the amount of XMR transacted on the blockchain.
The IP addresses are also hidden during transactions with the help of another open-source technology called Kovari. This technology, long story short, uses encryptions and routing techniques to hide IP numbers and geographical locations.
This gives you another layer of security and privacy when conducting business in Monero.
You probably already know about Bitcoin mining and how it did a number on the GPU gaming market. Well, Monero mining can rely on both GPUs and CPUs. There’s no need to invest in expensive ASIC miners that can burn your house down.
It can be done with GPUs quite efficiently. A big part of this is the actual algorithm used. Another is the block time.
Where Bitcoin has a block every 10 minutes or more, Monero generates one every 120 seconds. GPU-based Monero mining has a better chance of showing you returns these days with a minimal investment, whereas Bitcoin requires serious funds to start up.
It’s not Mainstream
Despite the success and the ease of Monero mining, this cryptocurrency is not what you would call mainstream. It enjoys a lot of success on darknet marketplaces due to its completely private transactional nature.
Of course, this also means that it’s primed for investment. Although the gains haven’t been as impressive as those of Bitcoin in the past few years, Monero is nonetheless on the rise.
And, unlike Bitcoin or other cryptocurrencies, you can pretty much do whatever you want with it. It’s likely that the demand will steadily increase as there is no real limit on the supply and its use.
There’s one more thing to note. Monero is quite unique. It has a different algorithm, policies, privacy standards, and supply plan. These factors alone make it so diverse and different from all other cryptocurrencies that the novelty alone makes it almost worth investing.
Is Monero worth more than Bitcoin? No, it isn’t and it won’t be for a long time. Can it be better than Bitcoin in the long run? That’s possible.
Mining Monero has proven to be more cost-effective than what everyone else in the world is mining. While there’s plenty of Bitcoin to go around still, the relative number of shares you can get using the same Monero mining gear is almost laughable.
Given the total privacy and endless supply, Monero may have a better chance of becoming the true coin of the future.