Monero is a decentralised cryptocurrency platform which, unlike many others, is not built on Bitcoin, but uses its own CryptoNote protocol. This page will highlight a number of Monero’s particular points of focus, such as its emphasis on privacy, scalability and interchangeability.
Monero (XMR) Chart
Monero values true decentralisation. In the case of Bitcoin and other cryptocurrencies, mining has become such a difficult process that it requires increasingly expensive hardware in other to be performed, which means that mining ability is increasingly becoming limited to a handful of powerful users or companies. This goes against the spirit of decentralisation.
Monero’s mining protocol means that every computer with an x86x CPU is capable of mining and of maintaining the network. In this way, it will remain decentralised, and every user will remain equally influential.
As opposed to Bitcoin and other cryptocurrencies, Monero also uses a “permanent block reward”, which means the reward for mining each block is not decreased dramatically in a way where it will eventually approach zero; instead, it is programmed to never fall below 0.3 XMR per block. Additionally, Monero controls inflation by restricting it to 0.3 XMR per minute, which means the system will know a healthy, but not increasingly sharp inflation. This will prevent the price volatility of other cryptocurrencies and result in a yearly inflation of approximately 1%.
Monero also tackles issues of scalability; this essentially means that it is difficult for many cryptocurrencies to equal the speed of traditional banks or financial tools such as PayPal. Bitcoin, for example, can only process 3 transactions per second per block, blocks are restricted to 1MB in size and block size cannot be increased without a consensus of 95% of users, which, considering the extensive user base, is extremely hard to achieve.
Monero, however, does not have any inbuilt restrictions in terms of block size; instead, it has a dynamic block size limit, which can easily be adjusted based on the traffic.
Monero prides itself on its emphasis on privacy: whereas the transactions of many other cryptocurrencies can be traced to particular users with special software, Monero uses its own security measures to guarantee more anonymity. All transactions on the network are private by mandate; there is no way to accidentally send a transparent transaction.
This privacy also means that Monero is fully fungible as a currency in a way other currencies are not. Fungibility means every coin can be exchanged for another coin (or set of coins) of the same value, which can be a problem when, for example, dealing with a coin that was previously involved in a criminal transaction; in this case, users may be wary to exchange other coins for this “tainted” coin, even if the “tainted” coin is now owned by an innocent user.
Because Monero has such a high emphasis on privacy, however, particular coins cannot become earmarked as previously involved in criminal activity and cannot be individually blacklisted by users, banks, or organisations.