Use Cases, Technology and User Experience
What is the use case of the token?
Monero is a cryptocurrency designed for privacy and anonymity. The word monero means coin in the Esperanto language. It completely remains in the dark which transactions a Monero coin went through, while all transactions of a given Bitcoin are traceable since the very beginning. This means that Monero avoids one of the distinctive features of blockchain technology which is audibility of transactions. It is exactly this privacy of transactions that makes the cryptocurrency interesting for its users. The problem is that not only legitimate users may use Monero but also malicious individuals that engage in criminal activities and want to keep their cash flows obscure. Therefore there is the risk that at one point regulatory agencies may restrict the access to the Monero network.
Monero’s use case is very clear: to enable transactions that can not be traced. There is no doubt that demand exists for this use case. In this regard Monero is already much more advanced than other cryptocurrencies since it has a functional product and an obvious use case. Nevertheless Monero does not operate alone in this niche. Other widely used coins that support privacy features are Zcash and Dash.
What does the technology behind look like?
Monero can be considered a CryptoNote based system that uses the CryptoNight hashing algorithm. CryptoNote is an open source protocol designed for privacy oriented blockchain networks.
In order to enable the privacy feature, Monero uses multiple keys that users need to get familiar with. This means users need to deal with private and public keys when sending or receiving tokens. In total a user may need four keys compared to just one public address and one private key with Bitcoin. Other than Bitcoin, Monero has no block size limit.
How is the User Experience?
Monero has recently implemented support on the hardware wallet ledger. The fact that several keys are used make it more complicated for users but this is required in order to enable the privacy features. Monero does not stand out with a clear UX and simplicity of use compared to other cryptocurrencies.
Team & Developer Community
Monero is developed by a partially anonymous community. Only two of the seven Monero core developers are currently known.
Among the known developers is Riccardo Spagni, who is a software developer with a background in IT. Even the known developers of Monero try to keep a low profile and share only few information regarding their background.
The other five Monero core developers are just known by nicknames. In total more than 400 developers have contributed at one point to Monero, which shows the very strong developer community the cryptocurrency has. It is more the successful implementation of milestones than the public credentials of the team that creates trust in the development capabilities of Monero.
Monero is a cryptocurrency that uses a Proof of Work consensus algorithm and is therefore dependent on miners. The mining is mostly concentrated by three large mining pools. Mining rewards provide incentives for entities with computational power to engage in the network and to enable transactions on the network. People that use Monero mostly do this in order to prevent their transactions from being visible. At the same time they may also want to hold the coin, in order to keep their balances obscure. The market capitalization of Monero is dependent on the fact that users not only use the network to transact electronic money, but also use the coin as a store of value.
Progress History, Achievements and Road Map
Monero launched in 2014 on bitcointalk as Bitmonero, before it later on rebranded to Monero. The past years have brought several updates including the fixing of a number of vulnerabilities. In 2018 a new CryptoNote Proof of Work was implemented and the support for Ledger, the hardware wallet, was released. The Kovri beta release is yet expected which enables users to hide their location and IP address. Once Kovri is implemented it will no longer be possible to trace back that users use the Monero platform for sending and receiving tokens. Right now the transactions are invisible but investigators are able to see which IP addresses engage with the network. The market capitalization of Monero has grown tremendously in the past years despite the recent cool down of the market.
Monero counts with a very active Reddit community with more than 141,000 subscribers and typically more than ten posts per day. The official Twitter account has more than 300,000 followers. In addition, Monero has its own Stack Exchange Community, a very old and traditional bitcointalk thread and uses Mattermost for team communication. The community behind Monero is very supportive which is one of the reasons why Monero is ranked among the ten highest valued coins on Coinmarketcap.
As of today Monero is the leading privacy cryptocurrency. It needs to be noted that during the 2018 cryptocurrency meltdown Monero has not lost as much market value as other comparable cryptocurrencies. Monero counts with outstanding features, a strong and enthusiastic community and a clear vision where it wants to be in the future. Despite these positive achievements investors need to consider that many of these milestones are already reflected in the token price. In addition, due to the privacy feature Monero also attracts the anger of the governments and secret services of this world. Since it allows users to effectively hide transactions from government entities, it is at risk that in certain jurisdictions it will be declared as illegal. Being illegal doesn’t mean that users can no longer use Monero. However, it would make it a lot more difficult for adoption to happen since regular exchanges could no longer list the token. This means that the strength and unique feature of Monero is at the same time a threat.
Total Score: 8/10
* The information contained in this article is for education purpose only and not financial advice. Do your own research before making any investment decisions.