4 Unique Features of Monero That Make It Stand Out from Other Cryptocurrencies
News | February 24, 2022, 13:01 PM | The content is supplied by a Guest author
Cryptocurrency, a type of digital asset developed using cryptographic technology, has taken the investing world by storm. A large part of crypto’s appeal lies in the fact that its value is largely market-determined and not easily controlled by external authorities like banks and governments. Because cryptocurrency can’t be printed, taxed, or seized by these bodies, it’s generally considered a safe store of value that’s well-insulated from financial setbacks like inflation.
Thousands of different cryptocurrency types are now available for purchase and trade. The biggest, most dominant players in the crypto industry include Bitcoin (BTC), the first cryptocurrency ever developed, and Ethereum (ETH). Newer coins, however, have been gaining ground in the market in recent years, claiming to have significantly innovated and improved upon the original technology utilized by their predecessors. One of these is the privacy coin Monero, abbreviated as XMR.
Since it was invented in 2014, Monero has enjoyed a promising growth trajectory and currently holds a market cap of USD 3.1 billion. As you’ll soon see, there are many compelling reasons to add Monero to your investment portfolio over other cryptocurrencies—even those that appear to be bigger and more popular. Read on for four unique characteristics that distinguish Monero from its competitors.
Complete Anonymity and Untraceability
Monero is the first privacy-focused cryptocurrency, and to this day it remains the most widely used. XMR’s primary claim to fame has always been that any two parties in the world can enjoy fast, untraceable, fully anonymous transactions with the coin. All a user would need is a device with internet access, a dedicated Monero wallet, and the currency itself. This makes Monero an ideal cryptocurrency for users with urgent privacy concerns.
In contrast, most popular cryptocurrencies offer only pseudonymous transactions instead of fully anonymous ones. Transaction information for these coins, such as the wallet addresses of the involved parties, is usually available for public viewing via their blockchain’s distributed ledger. From there, it’s usually not difficult to uncover the identities of the particular users behind these transactions.
To achieve full anonymity, all Monero transactions use one-time wallet addresses. These unique single-use addresses are recorded on the transaction receipts stored on the network’s blockchain in lieu of the participants’ real wallet addresses. Other identifying information, like the participants’ names and even the transaction amount, likewise does not appear on the Monero blockchain. As an additional obfuscation measure, the Monero network also generates multiple false transactions alongside every valid transaction, making it extremely difficult for hackers to pinpoint and track legitimate exchanges.
Well-Developed Security Features
As a privacy-focused coin, the security technologies Monero incorporates are among the best and most sophisticated available. Monero’s ring signature system, for instance, combines the signature of a user sending Monero with a group of signatures from other users on the network, thereby obscuring the identity of the true signer. XMR transactions are also protected by RingCT technology, a mechanism that hides transaction amounts from all parties except the official sender and receiver.
Overall, Monero takes user security more seriously than any other cryptocurrency. Thus, in comparison to users of other cryptocurrencies, users who invest in XMR can be more assured that their sensitive information is well-protected and that their transactions are safe from interference.
Monero is a fully fungible asset, which means that one XMR coin can be exchanged for another without any decrease in value. This quality differentiates Monero from assets like fiat currency, which may be interchangeable in terms of value but is still marked with identifying signs like serial numbers to distinguish individual bills. Once authorities learn the serial number of a particular bill, they can investigate and follow the transactions it has been used for without much difficulty.
Like traditional currency, many cryptocurrencies are not truly fungible in that the histories of individual coins can be traced through the transaction records on the public blockchain. If a particular coin is found to have been used for illegal purposes, merchants and centralized exchanges can refuse to accept it, effectively “freezing” the asset. Monero’s anonymization features, in contrast, make it much harder to trace than other cryptos, allowing users to spend the coin without fear of reprisal.
No Block Size Limit
Cryptocurrency transactions are documented on public blockchains, which are divided into individual units of data known as blocks. Many cryptocurrencies work with limited block sizes, which means that only a set amount of data can fit into the blocks being mined on the currency’s network. If many users are attempting to transact with that particular currency at once, those that can’t fit into an available block have to wait for new blocks to be mined before their transactions can be recorded and verified.
Unlike other cryptocurrencies, however, Monero’s blockchain does not impose a particular block size, and it creates new blocks around every two minutes. This means that the Monero network can accommodate higher volumes of transactions at faster rates than other cryptocurrencies, and it can also do so at a relatively low cost. Because Monero can easily scale up in this way, the network can accommodate large surges in growth—an exciting quality for potential investors to keep an eye on.
While all cryptocurrencies are relatively new technologies and therefore highly speculative investments at present, many experts agree that Monero is a sound investment choice for aspiring crypto traders. Its privacy, security, and promising growth rates help set it apart from other coins and distinguish it as an asset with considerable potential value in the long term.