December 28, 2020

Monero (XMR) Analysis

Monero (XMR) Analysis

Monero is not such a popular cryptocurrency but it is a very promising token. There are a lot of advantages and disadvantages to it that we will go over later. What is this cryptocurrency? Is it a good investment or not? Beginners usually ask a lot of questions, and we are going to answer the most popular among them. Let’s start!

Monero (XMR) Analysis

Monero cryptocurrency: Description

New cryptocurrencies are created regularly. Some of them aren’t popular and others take higher positions in the leaderboards thanks to the unique features that developers made. Monero isn’t very popular but people in the cryptocurrency sphere heard about it. The market capitalization of this token is significant. To prove these words, let’s look at the leaderboard. Monero is among the top 20 digital currencies.

The official name of this cryptocurrency is BitMonero. The first part of this word was taken from Bitcoin and the “monero” part is translated as a coin from the Esperanto language.

The first block of this cryptocurrency was generated in the middle of April, 2014. In September, it was attacked but it stayed alive. According to the specialists’ opinion, the source code of this cryptocurrency wasn’t protected very well. Yet, this situation helped developers to improve the mechanisms of token’s work.

Monero is a fork of ByteCoin. We should not confuse it with Bitcoin. At first, this coin didn’t even have an understandable for an average person user interface. All interactions occurred with a command prompt. Only at the end of 2014 creators gave a wallet for this goal.

In the core of Monero is the CryptoNote protocol and the CryptoNight algorithm supplemented it. The basic principle of XMR work is Proof of work that is similar to other popular cryptocurrencies. There are some advantages that make this cryptocurrency popular:

  1. The source code is open.
  2. The main feature of this cryptocurrency is existing digital signatures that can be used for protecting payments from spying. Users of other cryptocurrencies can also use this feature but in the vast majority of transactions, they need to use special services. If you use Monero, you don’t need to do it. For this reason, the token is highly protected and anonymous.
  3. One more feature of this cryptocurrency is the existence of Stealth-addresses. They use two private keys. One of them is created for viewing the information about the wallet and the second is needed for spending coins. The first is used for finding incoming payments in the Blockchain and the second – for signing transactions.

Therefore, Monero, like Bitcoin, is a totally decentralized system. However, if BTC gives the information about the amount of money that was sent to a certain address, XMR hides this information. It makes Monero more protected than Bitcoin.

The main cryptocurrency emission is 18 million 400 thousand coins. It is going to take 8 years and will be done by May 2022. Yet, this fact will not stop the coin production because, in the future, miners will get 0,6 XMR per every block. This action is needed to support an interest in the system and continue maintaining its work.

Monero (XMR) Analysis

Monero advantages and disadvantages

Like any other cryptocurrency, Monero has its positive and negative sides. We can name these advantages of Monero:

  1. Decentralization based on Blockchain technology.
  2. High level of anonymity.
  3. Highest level of security.

We need to mention that there are some time gaps between block creation. Usually, they take about 2 minutes.

Also, we need to talk about the disadvantages of this cryptocurrency. They are the following:

  1. The volume of Monero transactions is 8 times higher than in the Bitcoin system.
  2. Lately, experts have argued about the maximum anonymity of this cryptocurrency. For example, Zcash developers said that we can see transactions of people if we want and have certain skills. XMR creators said that this research was bought by Zcash creators because it is very profitable for them to do it. Also, there are talks about the ability of certain people to deanonymize the network if some circumstances arise.

How to mine Monero?

If we want to mine Monero, we need only a graphic card or a processor. Therefore, we can use a regular computer. Since Monero isn’t a fork of Bitcoin, it is impossible to mine XMR using ASIC. This makes this cryptocurrency more attractive for an average person. Also, the CryptoNight algorithm, in contrast to Scrypt, gives an opportunity to make computing cheaper without power losses. Moreover, the coin emission is decreasing with time and that’s a very big advantage of this coin.

What do we need for mining?

  1. Powerful graphic card and a processor.
  2. Special application for mining.
  3. Cryptocurrency wallet.
  4. Convenient pool.

If you are interested in mining on a processor, you can get the maximum effect from the models i5 and i7. It is a great option for those people who want to save electricity.

Mining using a graphic card is significantly faster, but you need to pay more money for electricity. For example, very popular graphic cards for mining are Radeon HD6870, HD 6990, etc.

To increase the productivity of mining, you can use both GPU and CPU. This would also save your computer equipment. To set up Monero mining, you need to download a special application from the official website, launch, and use it. Also, you can download other clients, it doesn’t matter.

To sum up, XMR is a good investment, but don’t forget about using other cryptocurrencies in your investment portfolio.