Bitcoin is not glittering as much these days, with some of its earliest and most avid fans giving rise to a new kid on the “currency block.” Instead, Monero is fast becoming the new darling virtual currency for those who wish to, or who must, remain anonymous. Apparently, for some, Bitcoin is just not anonymous enough anymore. For them, Monero, which is a privacy coin designed to prevent tracking, is becoming the go-to digital currency.
Only time will tell if its appeal captures the hearts and minds of other cryptocurrency users. But it is not unfathomable, as already, on a percentage basis, its appreciation is outperforming Bitcoin - albeit over a short time span. One reason that it is fast becoming the virtual currency of choice is due to law enforcement’s development of software which enables them to get a handle on Bitcoin transactions.
It seems that analysis firms such as Chainalysis are getting better at unearthing digital hoards linked to crime or money laundering, and are alerting exchanges and preventing conversion into traditional cash. At least, in one regard,Bitcoin's publically available blockchain ledger technology is proving to be an impediment to those who wish to remain totally invisible, thus paving the way for Monero’s popularity. (Editor's note - but please see Bitcoin Privacy – An In-Depth Guide to buying and spending Bitcoin anonymously).
When it comes to cryptocurrency, I may be savvier than the average person, yet I must admit that Monero flew under my radar and snuck up on me. What exactly is it? A privacy coin? A viable cryptocurrency? Good questions. Monero is one of many privacy-focused coins, each offering different security features. It doesn’t just create fake addresses to hide senders, it encrypts their true address. The open-source cryptocurrency came into being in April 2014.
Monero is unlike public-ledger cryptocurrencies such as Bitcoin, where addresses with coins previously associated with undesirable activity can be blacklisted and have their coins refused by other users. Blowing its own horn, Monero unabashedly claims to be "private, untraceable, and optionally transparent." As such, it is the preferred method of payment now for many ransomware attacks.
Monero is also fungible. Purportedly, by virtue of a sort of computer camouflage, Monero cannot become tainted through participation in previous transactions. This means Monero will always be accepted without risk of censorship and/or regulation. Unlike Bitcoin, whose transaction history of individual Bitcoins is recorded on the blockchain, the same isn’t true with Monero. Bitcoins that have been associated with certain events, like theft, could be shunned by merchants and exchanges. This is supposedly not possible with Monero.
By now you may be asking what is necessary to become involved in Monero. Like many other cryptocurrencies, Monero offers interested parties the opportunity to mine blocks. While individuals have the ability to join mining pools, they can also mine Monero by themselves. All it takes is an ordinary computer - no special hardware required, as is the case with Bitcoin.
Be aware that there is the usual considerable volatility with Monero as for other cryptocurrencies, soaring about 70% in the last month and over 1300% since it began trading on CoinMarketCap. Since inception in 2014, the cryptocurrency has fluctuated between roughly $0.25 and close to $60 (in May 2017). But just in the last two months of last year, it quintupled in value to well over $300. So it would appear to be an opportunity to “play” for quick capital gains- and of course furtive transactions. There is no marketable technology underpinning it such as blockchain.
It appears that, for now, Monero is gaining traction (and appreciation) due to its appeal as a facilitator of illegal transactions. However, when the average citizen gets on board with it, this will likely change, as everyday people grow concerned about privacy and surveillance. So, the value of virtual currencies may be a matter of conjecture but the future direction of surveillance is not. It is only likely to get worse and increase the appeal of virtual currencies like Monero.