What is Monero?
In this review I will cover the Monero blockchain and its native XMR coin. Monero is an open source blockchain platform that focuses on privacy and transactions being untraceable. This provides security and confidence for users on the network when it comes to the trading of their funds. The maximum supply of XMR is limited at 21 million, just like Bitcoin’s max supply, but there are regulations involved that will activate at a certain milestone. When the supply reaches around 18 million the halving of block rewards will stop at 0.3 XMR coins issued per minute. This is to keep the incentive for miners to remain active on the network as well as maintaining Monero’s value on the market. It is also one of the first networks to use bulletproof technology that reduces the transaction fees on the network. If within 6-12 months it doesn’t show any issues, it will be added as a Bitcoin-Improvement-Proposal (BIP) and voted on by the Bitcoin network for implementation.
Advantages
As I mentioned above, Monero offers the unique ability for users to not be tracked when they are making a transaction. This also involves:
- Transactions are not possible to be linked to a person and it is possible to choose who can see your transactions and only them
- The algorithm changes every 6 months preventing the creation of ASICs
- Transtaction speed is near instantaneous
Disadvantages
Of course, even Monero has its shortcomings. One of the main disadvantages is that eventhough the network is ASIC resistant, a large portion of the hashrate (about 43%) belongs to just three pools. Some of the other notable disadvantages are:
- Limited hardware wallet support – Ledger Nano S can support Monero, but needs to be forced, which is not recommended
- No real voting system – suggestions can be posted on the official forums, but the developers make the decisions themselves
History and Evolution
The Monero blockchain network was created back in April 2014 by Nicolas van Saberhagen as a hard fork of Bytecoin. The project was started as a grassroots movement that did not include pre-mining or VC funding. Recently Monero’s popularity has been on the rise due to its privacy-oriented nature. The main protocol that is the foundation of the Monero network is called CryptoNote. It was launched in October 2013 by Nicolas van Saberhagen, which is just a pseudonym just like Satoshi. This protocol was revealed by him in an online forum under the name ‘thankful today’. In the beginning the team consisted of just 30 developers but over the years over 200 other developers have played significant roles in shaping what Monero Is today. The current stage of development that the team is at is implementation of the KOVRI protocol. It will increase the security of the network severely, as the protocol encrypts your messages using Garlic encryption, which allows to encrypt multiple messages together and makes it harder to analyse the traffic of the system.
Monero’s Future
Currently, Monero’s development team do not have an official roadmap. Instead they focus on certain goals that are important for future milestones. Hard forks happen roughly every 6 months, so the community knows when to expect the more major network updates. The team in short intends to provide more security and even faster transactions, which will make both the community and investors happy. What is roughly planned for the near future: Ledger Hardware wallet support, Zero protocol implementation, Kasisto Point of Sale app, bootstrap daemon for faster setup of new wallets, GUI wallet with multi-sig capabilities and thousands of other smaller updates and fixes.
Monero Blockchain
The Monero blockchain is a decentralized peer-to-peer network using the CryptoNight Proof of Work consensus algorithm. Miners confirm transactions and blocks in the network and are incentivised with block rewards consisting of newly issued Monero coins. The rewards get reduced by 60% of its current state each year. After it reaches 0.3XMR per minute, the decreasing will seize, and the total emission of coins will forever stay at 157,680 XMR per year. On the other size, there is no real hard-coded limit to the block size and the average block time is about 2 minutes. It is also worth to note that the network difficulty adjusts every block, making sure that parties with large hashing power don’t try to disturb the system.
Monero Nodes
You may already know, but nodes are maybe the most important aspect of any blockchain network because everyone on the network refers to them almost constantly. There are several node types in the Monero network, which are Standard Monero Node, Remote GUI Monero Node, Remode CLI Monero node and Geo Located Monero World Nodes.
- Standard Monero Nodes – they participate in the network securing transactions and enforcing the rules. They will require a full download of the blockchain transactional history
- Remote Monero Node – This can be considered a light node. It does not require a full blockchain history download and do not contribute to the consensus. They refer to the standard nodes for validation.
Monero Additional Features
As Monero is a privacy-oriented cryptocurrency like many others, one could speculate that implementation of an upgrade like Lightning network is to be expected, but before it comes to that, the development team needs to do some key updates. Still, it looks like the team will be currently focusing mostly on the possibility of atomic swaps technology being added to the network, but unfortunately the Monero cryptocurrency will never support smart contracts since they disclose private information and just go against the ideals of the network.
Forks or Tokens Based on Monero
Monero is a hard fork of the cryptocurrency Bytecoin and after that it had its own hard and soft forks.
Hard forks
- MoneroV forked at block number 1564965 on 30th April 2018
- Monero Classic forked at block number 1546000 on 6th April 2018
- Monero Original forked at block number 1546500 6th April 2018
Recent soft forks
- Release of Monero CLI and GUI v0.13.0 on 11th October 2018
- Monero Network upgrade on 18th October 2018
How to get Monero
So, how do you obtain XMR coins? Well, there are two options. You can either mine it with the necessary hardware or you can just straight up buy it from an exchange that offers it.
Where to Buy Monero
Exchanges are platforms where users buy and trade cryptocurrencies. Currently there are no exchanges that offer trading of Monero coin (XMR) in a pair with fiat currency like USD or EUR except for BitFinex, which also allows bank transfers as payment for crypto coins. Otherwise, you can easily just buy another type of cryptocurrency that is offered in a pair with fiat currency and trade the coins for XRM either on the same or a different exchange. Almost every cryptocurrency on the market experiences volatility, meaning very sharp and quick fluctuations in price. While this is not liked by many people, an opportunity for traders is opened to make a great profit.
| Exchange | Cryptocurrencies | Fiat Money | |
|---|---|---|---|
|
Bitfinex
|
Bitcoin | USD, EUR, JPY | Trade now |
|
Poloniex
|
Bitcoin + 7 more | – | Trade now |
|
Binance
|
Bitcoin, Ethereum | – | Trade now |
How to Mine Monero
The Monero network stands out from the crowd of other cryptocurrencies because it changes its algorithm every 6 months. This ensures that ASICs for Monero cannot be created in an efficient manner, thus evading centralization of mining. Monero coins are mined with both GPUs (Graphical Processing Units) and CPUs giving users a good level playing field. Of course, if you would like to be as efficient and as profitable as possible, I recommend going with the GPUs as they are the best bang for your buck. The most efficient GPU you can use currently is the AMD RX VEGA64. If you would like to know more about mining XMR, you can go ahead and click here.
Wallets for Monero
No matter how much you try to get your hands on some XMR coins, you will need a wallet. They are software programs that are used to hold two keys – the private and the public key. The private key is used to access your funds, while the public key is for receiving crypto coins. Monero have their own official wallet, which you can find on their official webpage here. The wallet supports most types of OS like Windows 32/64bit, Linux 32/64 bit, OSx 64, ARM v7 or v8 mobile and hardware types. A 64 bit OS and system are highly recommended. At the time of writing this article 4GB or RAM should be sufficient and about 50GB of hard drive space where the blockchain transactional history will be stored. Please make sure to have extra space just in case. You can find a guide on how to install it on:
Alternative Wallets
What are alternative wallets? Well they are developed and overseen by 3rd parties. Alt wallets offer many different features that are sure to satisfy at least one need of any user. The features include anything from a better user interface to multi-coin support, which gives the ability of holding more than one type of cryptocurrency. There are several types of wallets which are desktop, mobile, web and hardware wallets. There is another type called Paper Wallet that is less popular, but quite useful and secure. You can download a program that randomly generates public keys from your wallet private key and prints them out with a QR code that you can give to someone else that would like to send coins to you.
Desktop Wallets
Online Wallets
Mobile Wallets
Hardware Wallets
Monero Security / Network Security
It is no secret that the Monero network is not going through a great period as there are increasingly more security breaches that may affect the confidence of the community in the project. Malicious users are getting craftier with their methods and people are wondering just how safe is the network currently? Well, according to a recent Weiss Ratings survey, Monero is still the pack leader when it comes to privacy coins and it is still considered the first choice for about 65% of the community.
News and Useful Links
If you would like to be always informed about the newest events and updates regarding the Monero network, you can go ahead and visit their official website and follow them on social medias.