Planning To Trade Monero Cryptocurrency? Here are the basics to get you started

One of the core principles of blockchain technology is to provide users with unwavering privacy. Bitcoin as the first decentralized cryptocurrency relies on this premise to sell itself to a wider audience that previously needed a virtual currency without government interference.

Unfortunately, in the long run, Bitcoin proved to be full of many weaknesses including non-scalability and mutable blockchain. All transactions and addresses are recorded in the blockchain thus making it easier for anyone to connect the dots and reveal the private details of users based on their existing records. Some government and non-government agencies are already using blockchain analytics to read data on the Bitcoin platform.

Such flaws have led developers to look at alternative blockchain technologies with improved security and speed. One of these projects is Monero, usually represented by the XMR ticker.

What is Monero?

Monero is a privacy-focused cryptocurrency project whose main goal is to provide better privacy than other blockchain ecosystems. This technology protects users’ information through Ring’s hidden addresses and signatures.

A stealth address refers to creating an address for a single transaction. No two addresses can be pinned to one transaction. The coins received go to a completely different address which makes the whole process opaque to an external observer.

Ring signature, on the other hand, refers to combining account keys with public keys creating a “ring” of multiple signers. This means that a monitoring agent cannot link a signature to a particular account. Unlike cryptography (mathematical method of securing crypto projects), ring signature is not the new kid on the block. Its principles were explored and documented in a 2001 paper by The Weizmann Institute and MIT.

Cryptography has certainly won the hearts of many developers and blockchain aficionados, but the truth is, it is still a new tool with few uses. Because Monero uses Ring’s proven signature technology, it sets itself apart as a legitimate project worth using.

Things to know before you start trading Monero

Monero’s market

The Monero market is similar to other cryptocurrencies. If you want to buy it then Kraken, Poloniex, and Bitfinex are some of the exchanges to visit. Poloniex was the first to adopt it followed by Bitfinex and finally Kraken.

This virtual currency is usually seen pegged to the dollar or against associated cryptos. Some of the available pairs include XMR/USD, XMR/BTC, XMR/EUR, XMR/XBT and many more. The trading volume and liquidity of this currency are very good statistics.

One of the great things about XMR is that anyone can participate in mining it either as an individual or by joining a mining pool. Any computer with very good processing power can mine Monero blocks with few hiccups. Don’t bother going with ASICS (application-specific integrated circuits) which are currently mandatory for Bitcoin mining.

Price volatility

Despite being an awesome cryptocurrency network, it is not special when it comes to volatility. Almost all altcoins are extremely volatile. This shouldn’t worry any avid trader because this factor is what makes them profitable in the first place—you buy when prices are on a downtrend and sell when they’re on an uptrend. a trend a trend a trend trader because this factor is what makes them profitable in the first place—you buy when prices are in a slump and sell when they are in an upward trend.

In January 2015, XMR was worth $0.25 then jogged to $60 in May 2017 and now it is bowling above the $300 mark. The Monero coin recorded its ATH (all-time high) of $475 on January seventh before it began to decline along with other cryptocurrencies to $300. At the time of writing, almost all decentralized currencies are in a price correction phase with Bitcoin teeter-tottering between $10-11k from its glorious ATH of $19,000.

Fungibility and adoption

Thanks to its ability to offer reliable privacy, XMR has been adopted by many people making its coins easily exchangeable for other currencies. In simple terms, Monero can easily be exchanged for something else.

All Bitcoins in the Bitcoin Blockchain are recorded, and therefore, if an incident such as theft occurs, each coin involved will be prevented from operating without being exchanged. In monero, you cannot distinguish one coin from another. Therefore, no seller can reject any of these because it is linked to an adverse event.

The Monero blockchain is currently one of the trendiest cryptocurrencies with a large following. Like most other blockchain projects, its future looks bright despite the looming government crackdown. As an investor, you should do your due diligence and research before trading any Cryptocurrency. If possible, seek help from financial experts to get on the right track.