Monero is another unique cryptocurrency that is focused on maintaining the privacy of its users and the privacy of the transactions that occur on its network.
Nevertheless, Monero is quickly catching up and has serious potential to become a widely used digital currency. Its main competitor is another recently introduced cryptocurrency that focusses on preserving the privacy of transactions, namely Zcash which you can read more about here.
Advantages of Monero
Monero is often regarded as the closest digital currency to cash, and obviously, the key advantage of Monero compared to Bitcoin or other similar digital currencies is the technologies it uses that keep transactions private.
The way in which that is accomplished is by using ring signatures to hide the amounts involved in a transaction as well as the addresses of the sender and receiver. Monero encrypts this information on its blockchain by generating fake addresses to conceal the real ones. The technology is so powerful that it’s impossible for anyone to track the real origin or destination of the money.
Another important advantage of Monero over other crypto coins is its mining algorithm.
Unlike Bitcoin, which utilizes specialized chips (called ASICs) to maximize the mining process, Monero can be mined quite efficiently using just a normal PC because the algorithm that Monero uses was designed to work efficiently with normal consumer grade hardware. This is important because it enables just about anyone to join the crypto revolution and start mining Monero. It can also contribute to making the whole network safer and speed up the development process as more and more people are able to participate.
The adaptive block size limit is another big advantage for Monero. As you may already know, the blocks on the Bitcoin blockchain have a maximum size. Once the size of the block is near the limit, pending transactions may be delayed because there is no room on the block.
Monero can adapt the size of the block and thus such delays in completing transactions do not occur. The average time that a new block on the Monero network is created is 2 minutes.
Disadvantages of Monero
It can be said that Monero is an example where its advantages can turn into a disadvantage.
Because of the excellent privacy that Monero offers, it has turned into one of the favorite cryptocurrencies used by criminals. Although this is not a disadvantage in terms of the usability or security of Monero transactions, it makes it more vulnerable to Government crackdowns or regulations which could potentially affect its price.
Being a relatively new cryptocurrency, Monero too has to cope with the reality of limited adoption and use in the real world. There are still only a few places where Monero is accepted and most of the transactions are either for speculative purposes or to conceal other transfers of money.
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