What Is Monero & How Does It Work?

Monero (XMR) is one of the most privacy-conscious cryptocurrencies in existence, using enhanced privacy technology to obfuscate all transactions, which provides a high degree of anonymity and fungibility. It has the third-largest community, sitting behind only Ethereum and Bitcoin for support.

Detailed below, we will take you over the will technology stack, why Monero is a great cryptocurrency for investment and use, and cover questions around mining Monero.

Some believe that Monero has the potential to be a better cryptocurrency than even Bitcoin, and we’ll go over those details so you can decide for yourself.

• —  Who Created Monero?
• —  How Does Monero Work?
• —  How Does Monero Improve Privacy?
• —  What Algorithm Does Monero Use?
• —  Why Should I Use XMR?
• —  How to Mine Monero
• —  How Much Monero Can I Mine in a Day?
• —  How Is Monero Different from Bitcoin?
• —  Why Monero is Better than Bitcoin?
• —  How Do I Buy Monero?
• —  Is Monero a Good Investment?

Who Created Monero?

Who is the founder of Monero?

Monero was created in April 2014 by a group of seven individuals that used a cryptography protocol called CryptoNote.

The Cryptonote protocol’s whitepaper was created in 2012 by an anonymous writer going under the pseudonym Nicolas van Saberhagen, and it details a method of only showing an approximation around transactions, rather than showing the full transaction details, which makes it more anonymous and private than most other cryptocurrencies.

Shortly after the creation of Monero, which was called Bitmonero at the time, the creator ignored calls for changes due to issues that users saw, which included:

• —  The block reward was too high when mining XMR;
• —  One-minute block times were considered a problem due to orphaned blocks;
• —  There were issues with the tail emission which were not being addressed and would cause issues in the future.

After the concerns were not addressed, the community forked the coin, and the newly minted cryptocurrency fork was called Monero, which is now one of the largest crypto coins being backed by a fantastic team and community.

The original creator, who only went by the name “thankful_for_today” has since disappeared and likely goes by another online name.

How Does Monero Work?

Monero (XMR) is an open-source and privacy-focused cryptocurrency; unlike other cryptocurrencies that provide a transparent ledger that shows all transactions through the blockchain, Monero obfuscates transactions so that you never know how much is in each transaction and you don’t know the origin or destination of the transaction.

Monero uses the CryptoNote cryptography protocol that allows transactions to complete with only an approximation of details which helps support Monero’s ideology of being a privacy-first cryptocurrency that is fully decentralized.

It’s currently impossible to trace transactions on the Monero blockchain, which provides the extreme privacy that many hope to gain in the Web 3.0 world. It also means that everyone using Monero is equal, and there is no chance of rejection or being blacklisted, or even traced for your transactions.

A major component of Monero’s technology are Ring Signatures, which take a real signature and then mixes it with a number of other signatures not involved in any transactions, these are called mixins, and you can’t know which is the real one, which is part of the obfuscation of transactions.

How Does Monero Improve Privacy Over Other Coins?

Monero coders always put privacy as part of their ethos so that functionality is important but not at the expense of exposing transaction data.

All transaction details are obfuscated so that you never know the true amount, destination or original address, or anything else about the transaction. With the ring signatures, you also can’t track ongoing transactions by a specific user.

Anybody interested in private cryptocurrency transactions the way they were meant to be, loves the idea and functionality behind Monero, which is why it’s preferred by privacy enthusiasts.

The primary privacy features of Monero that have been rolled out over the years include:

• —  Ring Confidential transactions, which have hidden the amount of each transaction were introduced in 2017.
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• —  Stealth Address hides the origin and destination accounts for transactions. It works by creating a one-time address for each transaction, and that is never used again for the same sender or recipient, so you can’t track ongoing transactions
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• —  Dandelion++ is used to hide the IP address of any device used to create transactions, which further hides the sending party.

What Algorithm Does Monero Use?

Monero uses a proof of work algorithm, RandomX, when validating transitions. It’s a new algorithm as of 2019 that replaced CryptoNightR. Both algorithms are resistant to ASIC mining, which is a common method to mine other cryptocurrencies like Bitcoin.

Why Should I Use Monero?

Monero is a privacy-focused cryptocurrency, so if privacy is a concern or even an interest in your crypto transactions, it’s one of the best methods to keep your transactions private, even going so far as to stop people from even tracking your Monero address, thanks to the privacy features.

Due to the privacy features, Monero is one of the top crypto options on the DarkNet or similar types of networks or websites. The privacy features of Monero assist Darknet sellers and buyers in remaining anonymous, even from each other.

The key benefit for users is that Monero or XMR is a fungible coin, which means that nobody can tell which coins were used for what purpose, so it’s impossible to track users or even see which specific coins were used in which transactions after the fact.

It’s not possible to trace users or track coins, which means whether you’re involved in illegal or legal activities, nobody is able to follow what you’re doing or what you’ve done, which for many is a major benefit, even for legal purposes.

How Do You Mine Monero Coins?

Monero (XMR) has used a proof-of-work algorithm called RanxomX to validate transactions on the blockchain since the end of 2019.

One of the major factors you need to know about mining Monero is that it’s ASIC resistant which rules out ASIC hardware-based mining.

You will need to use CPU or GPU-based mining for XMR coins.

• —  Block Reward: 1.16 XMR
• —  Block Time: 2 Minutes

According to current Monero rules, the block reward can’t drop to zero, and in May 2022, the last halving will happen, and the block reward will become static at 0.6 XMR.

How Much Monero Can I Mine in a Day?

Mining Monero isn’t a fixed figure each day, but you can make calculations and then get appropriate hardware to mine Monero based on those figures.

A block is mined every 2 minutes, which is 720 blocks per day. You’ll then need the Monero hash rate and the block reward to make the below calculation:

How Is Monero Different from Bitcoin?

Both Monero and Bitcoin encrypt their transactions and provide anonymity; however, it’s possible to trace a Bitcoin address to uncover historical transactions and the identity of the owner of the Bitcoin address.

Monero, on the other hand, is not only encrypted but is considered a “privacy coin” which completely hides the transactions, including sender and receiver, as well as the amount of each transaction.

The other major difference between Monero and Bitcoin is that Monero is fungible or nontraceable, so it now has a reputation as not only a “privacy coin” but also heavily used on the DarkNet that some people don’t like but shows Monero’s value in that type of space.

A general comparison of Monero vs Bitcoin is below:

Why Monero is Better than Bitcoin?

Monero and Bitcoin have their own places in the crypto world. Bitcoin certainly has a wider distribution and use, as well as being an excellent investment coin.

Monero, on the other hand, has some real-world practical uses, especially as Web 3.0 focuses on real decentralized currencies and anonymity, which Monero is better suited for.

Your major advantage of Bitcoin vs Monero is that it’s highly private and can’t be traced; even the actual coin used in transactions can’t be traced, so it’s extremely difficult to gather any information on Monero transactions.

How Do I Buy Monero? How to Buy Monero?

Monero is a great cryptocurrency to invest in, and you may need to use it for certain transactions that require privacy. In addition, the benefits of Monero and why you should consider buying are:

• —  Monero continues to improve and add enhanced privacy features
• —  Privacy is the cornerstone of everything about Monero
• —  If you require anonymity, then Monero is your best choice

Monero can be purchased at a number of exchanges, but if you’re trying to find the best price, as well as the best exchange to keep anonymous, then CardtoCrypto is your best crypto aggregator to find all of the possible options on buy Monero with credit card. The question remains where to buy monero.

To get started on your Monero purchase, follow these steps:

• —  Go to CardtoCrypto.io
• —  Select the Crypto you want to buy (Monero)
• —  Select your purchasing country (where you are)
• —  Select the currency you want to purchase in
• —  Input the amount of that currency you’d like to use in your transaction
• —  Click Search
• —  You can now filter the results based on your requirements, Aggregated, Best Rate, Fasted, Best Rating
• —  Decide which to buy and select Buy Now

Follow the instructions for the exchange you’re selected to get your Monero (XMR) coins. Even if you purchase your coins with a credit card or traceable payment method, once you have XMR, your purchases won’t be traceable.

Is Monero a Good Investment?

Monero Price Prediction

While Monero is a functional “privacy coin,” it can still be used as a pure investment due to the heavy use and increased mining of the coin, making it more popular than ever in 2022.

In 2021, XMR hit $517 per coin, which was an all-time high for top privacy coins. However, in 2022 the overall cryptocurrency market is in decline, so XMR may be a good investment to get now and hold until the market starts to stabilize and move back up.

If you had invested $100 in January of 2021, each coin was worth $46. By September 2021, each coin was worth $517, which is a significant increase and could have netted you a good profit.

You’d need to note current prices and trends with XMR to determine the best time to purchase; however, as of April 2022, each coin is worth around $273. So if or when XMR rebounds, there are significant profits to be made.

Disclaimer: Remember that this article is not financial or investing advice; it’s the author's opinion on a specific topic. You should not invest or buy anything without doing your own investigation and due diligence.

There is no warranty given on the completeness or accuracy of the information contained in this article. Cryptocurrencies are highly volatile from day to day, so even with complete and accurate information today, that may change quickly.

You must research your own investments in cryptocurrency and not use this article as your sole source of information on investing or not investing in a cryptocurrency or anything else.