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What is Monero?

Moreno (XMR) is a secure, private, untraceable currency. With Moreno, you are your own bank. Only you control and are responsible for your funds, your accounts and transactions are kept private from prying eyes.

Monero is an open-source proof-of-work (PoW) cryptocurrency that is freely avalaible to everyone. It runs on Windows, Mac, Linux, and FreeBSD.

History of Monero

Monero was launched in April of 2014 originally under the name BitMonero. Bit (as in Bitcoin) and Monero (literally meaning “coin” in Esperanto). Five days later, the community opted to shorten the name to just Moreno. Moreno represents the first fork of the CryptoNote-based currency Bytecoin, with two major differences – target block time, and emission speed.

The Moreno Core Team discovered numerous incidents of very poor quality code that was subsequently cleaned up and improved during that first hard fork.

On September 4, 2014 an unusual and novel attack was succefully executed against the Moreno network.
The attack partitioned the network into two distinct subsets which refused to accept the legitimacy of the other subset. This left the attacker with a short window of time during which a sort of counterfeiting could occur.

The privacy of Monero transactions were further strengthened with the introduction of ring signature algorithm (RingCT) via Gregory Maxwell’s Ring Confidential Transactions (started at block #1220516).

RingCT provides an additional layer of confidentiality by not displaying the amounts implicated in a transaction to someone who did not directly take part in it. By early February, over 95% of all non-Coinbase transactions used the optional RingCT feature.

It is still possible to send a transaction without RingCT – after the next hard fork in September 2017, this will no longer be the case. What gives Moreno value?

At the time of this writing, Monero was trading at $44.26 each, with a total market capitalization of $650,655,127 million making it the 11th highest valued cryptocurrency on coinmarketcap.com.

So what gives it value?

Fungibility

Fungibility is an important function of currency, it’s considered by many to be an extremely important aspect for the future of cryptocurrencies. Because Bitcoin is pseudo-anonymous, the altcoin space is trying to fill the role of proivate zero-knowledge transactions.

Monero is considered by most in the cryptocurrency community as a truly fungible coin.

Privacy

Monero allows you to send and receive funds without your transactions being publicly visible on the blockchain. This ensures your purchases, receipts, and other transfers remain private by default.

The Moreno daemon utilizes CryptoNote technology which uses ring signatures to ‘cloak’ transaction data. Moreno says to have improved upon the CryptoNote feature by offering an opaque blockchain system called viewkey – this makes the system optionally transparent when completing transactions, the private view key is required to view all transactions related to the account.

Monero Mining

Decentralization

Monero is strictly powered by the CryptoNight PoW algorithm – this mining algorithm is specifically designed for use in ordinary CPU’s. This means it has the potential to be efficiently tasked to billions of existing devices.

This smart mining feature allows transparent CPU mining on the user’s computer – this is in stark contrast to the de facto centralization of mining farms and pools found on the Bitcoin network.

Scalability

Monero doesn’t have a hard coded maximum block size . This means that unlike Bitcoin, it does not have a 1 MB block size limit preventing scaling for mass adoption. Since there is no maximum block size limit, a block reward penalty mechinism is built into the protocol to disincentive excessive block size’s.

By default, the Monero system promotes and permits net neutrality on the blockchain; this means miners cannot become censors, since they do not know where the transaction goes or what is contained within it while still permitting auditing when desired.

How to Buy Monero

At this time, Monero is availableafor Bitcoin through five primary exchanges:

1. Shapeshift

2. Poloniex

3. Bittrex

4. Bitfinex

5. Bitsquare

Buy Monero directly with fiat currencies EUR, GBP, USD, CAD, CNY at MoneroDirect.

Shapeshift

Shapshift is currently the easiest way to buy Monero.

Follow the steps at this link in order to complete a successful transaction.

Poloniex, Bittrex, and Bitsquare

If you would like to buy Monero through Poloniex, Bittrex, or Bitsquare follow their instructions for setting up an account and depositing funds.

Each offers a different environment for acquiring Monero in that you must buy it by fulfilling other traders’ sell orders. This means that prices may vary, sometimes widely.

Bitfinex

On November 30, 2016, Binfinex opened trading for XMR/BTC and XMR/USD pairings, making it the first exchange to support a fiat-XMR pair.

Kraken

On January 2, 2017, Kraken opened trading for XMR/BTC, XMR/USD, and XMR/EUR.

Monero Wallets

Monero is stored on a an account, which is based on two distinct cryptographic keys: the spend key and view key . The spend key is the only key required to authorize the transfer of funds of a Monero account. The view key grants access to view (but not spend) the balance of an account and can be handed over for the purpose of an audit. Both the spend and view keys are 64 characters long.

In addition to the spend and view keys, your Monero account also consists of a public address and mnemonic seed. A public address is what you share with others in order to be able to receive Monero. A mnemonic seed is a of 13 or 25 words that you receive when you first create a new Monero account.

This seed can be used to backup or restore your account. It is absolutely imperative that you write it down and keep it in a safe place.

Storage Options

MyMonero

The easiest way to store your Monero is via the online-wallet MyMonero, which works within your computer or mobile internet browser and doesn’t require any installation. However, it’s important to note that MyMonero’s servers (can see but not spend) your Monero balance. Thus, you do run the slight risk of a loss of privacy.

MyMonero is owned and operated by Riccardo Spangi, one of the Monero core team members.

Full Node

If you would like to run a full Monero client while also contributing to strength of the network, consider running a full Monero node. Doing so helps keep the network stable and robust, affords you the maximum privacy Monero has to offer, while still allowing quick access to your funds.

A large amount of processing power on your computer is not necessary, athough you will need a few gigabytes worth of disk space. Instructions (English only) on how to run a Monero node may be found here.

GUI

There is an official GUI wallet for Monero, but it is currently in the beta stages of development. The 3rd party Exodus wallet will supposedly add Monero support in the near future.

Paper Wallet

For absolute security, you may consider storing your Monero on a paper wallet, effectively moving the funds offline and into what is commonly referred to as “cold storage”.

In order to remove your funds from the paper wallet and back online, you can either enter your mnemonic seed at MyMonero (which requires a 1 Monero fee) or by inputting the seed into your Monero client.

An offline wallet generator may be found here, and an example of a paper wallet on which you can write your keys.

Hardware Wallets

We always recommend using a hardware wallet like the Ledger Nano S or the TREZOR.

TREZOR

While an exisiting unofficial TREZOR Monero firmware was released , it’s not being maintained and will be compatible once the network hard-forks to make RingCT transactions mandatory (scheduled for September of 2017).

Ledger Nano S

The Ledger Nano S is a good target for Hardware Wallet support. The Chief Technology Officer (CTO) of Ledger has expressed support and willingness to assist in the development of Monero intergration on the Ledger Nano S / Ledger Blue platform.

However, it’s unclear if this effort is still underway – a primary developer working on Monero Hardware wallet support seems to be needed to make the final push to make this a reality.

Monero vs. Bitcoin

One of the more annoying side effects of transacting in Bitcoin is your wallet address essentially also compromises your privacy.

If you give me your Bitcoin wallet address to send you a payment, you immediately compriomise the privacy of that particular wallet amount. Because Bitcoin’s blockchain is a matter of public record, I can see the corresponding wallet’s balance, both now and in perpetuity.

The Bitcoin community has attempted to solve these problems by introducing ‘mixing’ features. A more detailed explanation can be found here.

Other advantages of Monero over Bitcoin

1. Monero’s mining algorithm

The Bitcoin algorithm runs dramatically faster on custom made mining chips, known as Application-specific integrated circuit chips (ASIC’s) than on standard PCs and laptops. This means it’s pointless for any ordinary computer to attempt to participate in the mining process for Bitcoin, and leads to a relative concentration of miner’s in countries with the cheapest electricity costs.

In contrast, the Monero mining algorithm was specifically designed so ASICs do not have a significant advantage over ordinary computers owned by the general public. This means people all over the world will be able to leave mining software running on their home and work PC’s.

Those that do will earn Monero in exchange for running the software that processes and verifies other Monero transactions. Therefore, if someone else is paying the electricity bill (e.g. An employer or university housing complex), this derives the financial incentive for people to mine Monero using the spare capacity of the computers they already have access to.

Far more people will be willing to casually use existing computers for this task than if they needed to purchase and install purpose built ASIC mining hardware.

2. Monero’s ‘Adaptive block size limit’

Monero’s blocks are produced on average every 2 minutes, while Bitcoin blocks are produced on average every 10 minutes.

Blocks have a maximum size, so if there is no room in your the current block your transaction will be delayed. If you are desperate to have your transaction included in the a block promptly, you can increase the transaction fees that you pay to the network.

Bitcoin blocks are frequently completely full, causing transactions to be delayed and fee’s to increase.

Monero has been designed from the beginning to have an automatically adaptive block size limit. This means it will automatically be able to handle future increases in transaction volume without this argument arising.

3. Increased likeliness of support for microtransactions

To support ‘ microtransactions ‘, Bitcoin and Monero will need to support systems like the ‘ Lightning network‘ in order to radically reduce the cost of small payments in the future.

Currently, Monero has the advantage here, because Bitcoin has yet to implement a support technology called ‘ SegWit‘ to allow for micropayments in a scalable model, this may change on August 1st when the Bitcoin core code signals SegWit activation.

4. Invisible Internet Project (I2P)

This will add even greater privacy protections when transacting in Monero. I2Pwill protect you from passive network monitoring, so that not only are your payments untraceable, but people snooping the network cannot tell you are even using Monero at all.

Monero vs Bitcoin In Depth

Monero vs Bitcoin. Fluffypony’s brainchild vs Nakamoto’s crypto giant. Who comes out on top?

Exchanges

As with all altcoins, it is clear that Bitcoin is more widely exchanged. Although you won’t find any monero ATMs, you can exchange BTC for Monero on the following exchanges: Poloniex, HitBTC, Bitfinex, Bittrex, Krken, Livecoin, BTER, BTC Alpha, Cryptopia, Tux Exchange and alcurEX.

To be fair, this is a very large number of places to trade Monero. But Bitcoin still comes ahead considering that the markets above are all XMR/BTC markets (meaning that you need BTC to trade in the first place).

Winner: Bitcoin

Price

Bitcoin, in terms of price, is the undisputed king of the scene. However, Monero sits at a healthy $50-60 USD with strong growth since the beginning of this year. So if you’re looking to put your money in a stable place, Bitcoin is the place to go. But if you’re looking to speculate on more volatile changes, Monero might just be what you’re looking for. But for now, in terms of price, Bitcoin is well ahead.

Winner: Bitcoin

Speed

Monero, with an average block time of two minutes, confirms transactions at at least on fifth of the time it usually takes a Bitcoin transaction. That’s a significant difference, and proves to be one of the main benefits, other than security, that Monero has over Bitcoin. Keep in mind that this difference might decrease in the future once the Bitcoin community makes progress with regards to the scaling debate.

Winner: Monero

Security

One of Monero’s main selling points is actual anonymity – hence the selling points: Secure, Private, Untraceable. Whereas Bitcoin’s security ends at a point of pseudonimity (concealed vs protected identity), Monero provides actual anonymity. This is done by using ring signatures, which prevent your identity from being singled out, because it is lumped in with a group. Monero is also untraceable because your address never actually appears on the Monero Blockchain, meaning that nobody knows where your money is going to, and that it’s your money in the first place.

Keep in mind, however, that although Monero wins the privacy debate within the security aspect of these currencies, the sheer size of the Bitcoin network make BTC transactions much less likely to be reversed that XMR transactions.

Winner: Monero

Acceptance

It’s very clear that Bitcoin is the most accepted cryptocurrency on the market. Everyone hears of tech companies like Newegg accepting Bitcoin payments (although admittedly decreasing in numbers), but nobody hears of altcoins like Monero being directly accepted on ecommerce websites and the like. However, considering that we have service that takes care of altcoin acceptance for us, like shapeshift.io, this is hardly an issue. It is also worth noting that Monero, due to its privacy features, is traded on darknet markets. This gives room for the argument that Monero is more accepted than other alternative currencies because it has a real-life use-case in terms of marketplace consumption.

But for now, Bitcoin takes the cake.

Winner: Bitcoin

Developers

It’s hard to find a currency that has more reputable developers than the Bitcoin core project. Commentors, however, often opine that Monero comes in as a close second when it comes to the programmers working on the project. For one, the project is entirely open-source. But more importantly, with Fluffypony as one of the main project leads, we find that his honesty instills confidence in Monero users. Also, it has been mentioned on Bitcoin Uncensored interviews that there are multiple PhD level cryptographers working on the privacy aspect of the project. As with the other coins, Bitcoin wins this category, but it’s safe to say that Monero comes in as a close second.

Winner: Bitcoin

Wallets

The support for Bitcoin wallets is unparalleled in the crypto space. As such, Bitcoin clearly wins this category. However, considering that Monero has the unique use-case of providing complete anonymity, we find that there are enough wallets to support your needs.

These range from the full Monero client, to mobile, web and lightweight clients. Mymonero.com is a popular online wallet with widespread use.

Also, it seems that Ledger is planning to integrate support for Monero for their hardware wallets.

Winner: Bitcoin

Liquidity

As with markets, Monero’s liquidity also cannot compare with Bitcoin’s liquidity. After all, most markets require you to trade BTC for Monero in the first place. However, Monero’s market cap boasts a whopping 800+ million, with over 15+ million daily volume, making it one of the most traded alternative cryptocurrencies.

Winner: Bitcoin