Monero is a privacy-oriented cryptocurrency. The cryptocurrency, introduced in 2014, focuses on fungibility, data protection and decentralization in transactions in the blockchain. The blockchain is intentionally configured to be opaque.
While anyone can use the Monero blockchain to send and receive money, no outsider or third party can identify the source of any particular transaction or its destination. Likewise, the crypto project has found great use among people seeking financial privacy as everything remains completely hidden on the network.
How Monero improves data protection in crypto transactions
The Monero crypto project uses ring signatures and stealth addresses to improve network privacy. In this case, ring signatures ensure that the identity of the participants is hidden in the network. The anonymous digital signature does not reveal the member who signed a transaction, or the recipient in this case.
The Monero platform generates the ring signatures using the sender's account keys and combines them with public keys, making them unique and private. By merging private and public user keys, the identity of the sender is better hidden, since it cannot be determined which keys of the group members were used to calculate the signatures.
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Stealth addresses provide another level of privacy. Addresses on the Monero blockchain are generated randomly and created for each transaction. The addresses erase the actual address of a transaction and hide the identity of the recipient.
The creation of Monero coins is done through a process called mining, where participants are rewarded for recording transactions on the blockchain. Unlike other crypto projects, Monero Mining does not require any special hardware. Thanks to a proof-of-work algorithm that enables access to a large number of processors, mining can be carried out on all leading platforms from Windows to Android to Linux and MacOS.
Hence, Monero mining is open to various parties and is not limited to large mining pools as is the case with most projects. The mining process takes place in standard computers, where 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 preset total number of Monero coins that will ever be in circulation. The developers decided to increase the total amount of coins by 87% in the first year. The percentage of coins mined has decreased with each new year since then.
What affects Monero price
As a privacy-oriented cryptocurrency, software developments that make a huge contribution to improving privacy functions are significantly influencing Monero's sentiment and giving back their price. Likewise, the strong demand for its platform to facilitate private cross-border payments is a major contributor to the price increase.
Monero is also prone to media hype surrounding the use of cryptocurrencies, particularly in the mainstream financial sector. Positive media hypes significantly accelerate acceptance and, conversely, drive up prices. Regulatory developments in the use of cryptocurrencies are also affecting the price of Monero, as most of these projects are aimed at regulatory approval to expedite adoption.