Crypto Academy Week 16 | homework post for @levycore | privacy coin | by @loveth01.
.jpeg)
PRIVACY COINS
Like the name implies, these coins are cryptocurrencies that differ from the conventional cryptocurrencies that most persons are used to in which transactions processes and details of users are made public and the transactions can easily be monitored by an external body to ascertain the transactions a user carries out.
The privacy coins however are different as they provide topmost security and privacy for their users. The transactions carried out on the privacy coins are always kept as a secret from external bodies. These coins hide the identity and addresses of their users and it is also impossible for anyone to monitor or ascertain transactions carried on this platform. Although the privacy coins are not as pronounced and popular amongst people as other public cryptocurrency coins, the users of the privacy coins are at ease when carrying out a transaction as they would be sure that the entire transaction details is kept under tight security and will not be disclosed to any outside party.
The private behavior of these coins has overtime raised suspicions from some government agencies into thinking that the reason behind its privacy system of carrying out transactions is to carry out fraudulent activities like money laundry, evasion of tax payment and so many as that. This has made those government agencies to delist (remove from the list) these coins, this is the major reason why these privacy coins can not be found in most exchange platforms.
The privacy coins are not wide spread and so many traders do not even have any idea on what this coin is all about, We have several privacy coins like Monero, Zcash, Dash, Verge, Horizen, Beam and so many others like that but we will be taking s look at one of these privacy coins to analyse its details carefully.
MONERO
Bitcoin is the boss when we want to take a look at cryptocurrencies that practice the public system of carrying out transactions i.e transactions that its processes and details can be seen by anyone. In like manner when we are looking for the boss of cryptocurrencies that practice the private system of carrying out transaction, one coins name that comes into view is the MONERO and that is the name of the coin we will be analyzing in this article.
This was launches in the year 2014. The developers of Monero developed this block chain to be able to keep all informations and transactions of the users of this coin as private and confidential. It use proof of work and always have it in mind that any transaction of the Monero blockchain can't be traced. The developers of the Monero coin actually to me had a unique way of thinking which to many will be considered as unprofessional, not profiting and to some a foolish way of thinking, the developers after coming up with this coin didn’t keep any stake for themselves (am sure you would agree with me that this is actually strange) but instead they would rather want to depend on the aids and donations made by several individuals to be able to keep Monero running.
Monero is based on the idea that all humans are equal in fundamental worth and should be accorded exactly equal right you might be thinking where can I get Monero you can buy Monero through the ATM.
As at 1:49pm on 2nd June 2021 on coinmarket cap.
Monero price :$277.83
Trading volume :$269,139,579.05
Volume|market cap :$0.05421
Market Dominance :0.30%
Market rank :26
Market cap :$4,964,419,660.13
Fully diluted market cap :$4,964,419,660.13
The Monero coin makes use of two important concepts to keep the block chain private.
These concepts are the ring signature concept and the stealth address concept. We will be taking a look at how these concepts works one by one.
1 . RING SIGNATURE CONCEPT: this concept refers to the concept of signing a digital or virtual signature by any member of the group of people who possess keys referred to as private keys. How this ring signature functions to privatize user details is that it makes use of the users account key and then join it with a public group’s keys, this makes it quite difficult for the identity of the user to remains hidden and private, other than the ring signature concept, the Monero coin also employs the use of the stealth address concept.
2 . STEALTH ADDRESS CONCEPT: This stealth address is another strategy by the developers to conceal the identity and details of their users. How the stealth address works is that it generates a public address that is only useable once for any transaction. Since transactions will not involve the use of personal or private address, the identity and informations of the users are successfully concealed from the eyes of the public.
Now let’s look at the characteristics of Monero that makes it a unique coin.
1 . IT’S FUNGIBILITY: Wondering what fungibility is all about? Let us take a look at a little illustration that will aid our understanding of what fungibility means. For instance, if Ade borrows N1000 from his friend, as far as he is able to pay the N1000, it will not be a problem, if he likes he can pay with two N500 or five N200, it means that the money is fungible. But take for instance if I borrow a friend’s motorcycle and then returns it with another person’s motorcycle, it will definitely be a problem, the coin being fungible means that it can be traded with another coin of similar value as it is.
2 . TOTAL CONTROL: in the Monero private coins you have total control over your coins, your transactions are kept private, you are not being monitored, nobody know how much you spend and what it is spent on, is that not a great quality, you can leave in the world of your own, free from prying eyes.
3 . IT HAS MANY KEYS: like we looked at in the concepts used by the Monero, the Monero has more than one keys, This gives transactions an air of mystery as no users details is known by another user or an external body.
THE WORKING PROCESS OF THE MONERO PRIVATE COINS
Transactions that are made on this platform are processed by a group of persons referred to as the miners, the work of these miners is to take care of the privacy system of the coin and to validate the transactions that are carried out on this platform.
HOW YOU CAN CREATE A MONERO WALLET
Haven gone through this article, am sure you must be fascinated by the Monero coin, you might want to own a wallet yourself, if that is the case, then this part of the article is for you; I will be showing you how to create your own Monero wallet.
STEP 1: The first step is to open your browser and set it to incognito mode.
STEP 2: open the website on your phone on your computer (www.mymonero.com)
STEP 3: after you login to the website, you will be given a private key, this key would be used before you can have access to your account. If possible save it somewhere, write it down or something but make sure that it is kept safe and somewhere not accessible to others.
STEP 4: After noting the key down, select the login button and it will carry you to the new account you just created
Congratulations, you have successfully created a Monero account, now you can use it to send funds, receive funds and perform other transactions.
NB: once you have successfully created the Monero account, you will three buttons; Transaction, Send and Receive, once you open transaction button it will open a fresh page, notice that in this page you will see mixin, mixin is the number of the other signatures we spoke about in the stealth signature concept.
WHY I CHOSE THE MONERO PRIVACY COIN
I chose the Monero privacy coin because of its wonderful features as discussed above, like I said before, the Monero coin can be referred to as the boss of the privacy coins, these coins offer an excellent security system and also keeps a high confidential system. Having a transaction system that affords you this type of high security gives you are cool sense of satisfaction especially for individuals you love to live their lives privately and out of the public’s eye.
ADVANTAGES OF THE MONERO PRIVACY COINS
The transactions are private and are not controlled by certain government bodies like the central bank.
The transactions process is very fast.
DISADVANTAGES OF THE MONERO PRIVACY COINS
It could be a platform that could be used to carry out illegal transactions, the activities of this coin cannot be monitored by relevant security agencies and so hoodlums can make use of this opportunity to carryout illegal activities.
The Monero coin is not accessible on many exchanges .
IN CONCLUSION,
Not everyone enjoys having their financial affairs being marketed to the world for reasons best known to them. This has made some persons reluctant about the idea of venturing into the crypto market, for this type of persons, the privacy coins are the best go, and you can make your transactions as quite and as secretive as you wish without fear of being discovered by an external body.
The privacy coins are nice coins if we use them in the right manner, am sure that from this article we have successfully understood to a large extent what the Monero coin is all about
Thanks to professor @levycore this is my homework post.