Monero’s XMR is a decentralized cryptocurrency that facilitates fast and inexpensive payments globally. Monero was created to free users from long-holding periods and capital controls that limit the flow of fiat currencies, with the advantage of being a secure and private cryptocurrency.
Monero’s XMR is considered a true cryptocurrency and competes with Bitcoin and other true cryptocurrencies to become the alternative of choice to fiat currencies and electronic payment systems.
Unlike the majority of cryptocurrencies, which have a transparent blockchain, the Monero blockchain uses cryptography to shield sending and receiving addresses, as well as transacted amounts.
Each Monero transaction conceals sending and receiving addresses and amounts, delivering constant privacy to Monero user activity that differs to the selectively transparent cryptocurrencies such as ZCASH and transparent cryptocurrencies, such as Bitcoin.
Three key technologies deliver Monero’s privacy capabilities, these being Ring Signatures, Stealth Addresses, and RingCTs:
- Ring Signatures: Conceals the source of funds.
- Stealth Addresses: Conceals the recipient address.
- Ring CT: Conceals the amount
Monero was launched in April 2014 following a Bytecoin fork and unlike a large number of cryptocurrencies, does not have a finite number of coins at launch.
The creation of Monero coins is based on an Emission Curve:
- First main curve: Approximately 18.132m coins by the end of May 2022.
- Tail curve: 0.6 XMR per 2-minute block, kicks in once the main emission is done, equivalent to less than 1% inflation decreasing over time.
- The constant tail emission ensures that at some point in the future the amount of yearly lost Moneros will exactly balance out the amount of newly emitted Moneros. Monero will eventually be inflation-free, unlike fiat currencies that are designed to inflate exponentially.
The creation of each individual Monero coin comes from mining, which is a reward mechanism for users involved in the verification of transactions on Monero’s blockchain.
Monero’s proof-of-work protocol means that mining for Monero coins is with computational power, with miners able to use either CPUs or GPUs for mining, while Monero is ASICs resistant.
Some distinct differences and characteristics of Monero include:
- There are no physical Monero, only virtual.
- Monero does not have a hard block size limit. Instead, the block size can increase or decrease over time based on demand. There is a cap on the growth rate to prevent outrageous growth.
- Unlike the majority of true cryptocurrencies, there are not a finite number of Monero XMR coins.
- A new block is generated on the Monero blockchain every 2 minutes, which is 5x faster than Bitcoin.