Monero is a privacy-focused cryptocurrency. Launched in 2014, the cryptocurrency focuses on fungibility, privacy, and decentralization when it comes to transactions on the blockchain. Its blockchain is configured to be opaque on purpose.
While any person can use Monero blockchain to send and receive money, no outsider or third party can tell the source of a given transaction or its destination. Likewise, the crypto project has found great use among people seeking financial privacy, as everything in the network remains entirely hidden.
How Monero Enhances Crypto Transactions Privacy
Monero crypto project leverages ring signatures and stealth addresses to enhance privacy on the network. In this case, ring signatures ensure the identities of participants on the network are concealed. The anonymous digital signature doesn’t reveal the member who signed a transaction or the recipient in that case.
The Monero platform generates the ring signatures using senders account keys and combines them with public keys, thus making them unique and private. A merger of user private keys and public keys enhances the hiding of sender’s identity as it makes it impossible to ascertain which group members’ keys were used to compute the signatures.
Stealth addresses add another layer of privacy. Addresses on the Monero blockchain are randomly generated and are created for each transaction. The addresses cancel the actual address of a transaction in addition to hiding the identity of the recipient.
The creation of Monero coins occurs in a process called mining, whereby participants are rewarded for recording transactions on the blockchain. Unlike other crypto projects, Monero mining does not require specific hardware. Mining can take place on all leading platforms from Windows to Android to Linux and MacOS thanks to the use of a Proof-of-work algorithm that enables access to a wide range of processors.
Therefore, Monero mining is open to different parties and not limited to large mining pools, as is the case in most projects. The mining process takes place in standard computers, whereby miners compute complex mathematical puzzles. In return, they are rewarded for correct answers.
Over 17 million Monero coins have already been mined. Unlike other cryptocurrencies, there is no pre-set total number of Monero coins that will ever be in circulation. Developers chose to increase the total amount of coins by 87% in the first year. The percentage of coins mined has since been decreasing with each New Year.
What Affects Monero Price
Being a privacy-centric cryptocurrency, software developments that go a long way in enhancing privacy features influence Monero’s sentiments a great deal and return its price. Likewise, strong demand for its platform in facilitating private cross border payments goes a long way in driving prices.
Monero is also susceptible to media hype on the use of cryptocurrencies, especially in the mainstream financial sector. Positive media hypes go a long way in accelerating adoption, conversely driving prices higher. Regulatory developments on the use of cryptocurrencies also influence Monero’s price, given that most of these projects are gunning on regulatory approval to accelerate adoption.