In this week's class, professor
@levycore took us through the strategies and the operations of privacy coins, we looked at the types of privacy coin wallets and how to install and create one. Privacy coins also have advantages and disadvantages which we also looked at that.
As usual, a homework task was given and I tried my hands on the questions and it solved presented below.
Choose a Privacy Coin and perform a fundamental analysis of the coin in detail.
Before proceeding to answer the main question, let's try to understand a brief overview of what a privacy coin is.
What are Privacy Coins ?
As the name connotes, these are a type of cryptocurrencies that is purposely designed to give its users the value of privacy or anonymity after performing transactions on the blockchain by hiding their origin and destination through some privacy features called strategies. Unlike the typical blockchain modus operandi where transactions are transparent to all players on the blockchain, privacy coins are meant to go against the normal by privatizing its transaction from the third player or user. This has raised a lot of concerns and backlashes from some industry players and regulators about the secretive nature and the absence of sharing user identification information when performing a transaction or transmitting funds. As a result, some crypto exchange platforms such as CoinCheck, Bittrex, etc. have delisted some privacy coins. The notable privacy coins that come to mind are Dash, Monero, Zcash, Beam, Grin, etc. But for the sake of this assignment, I will be doing my analysis on Monera.
source
Brief history on Monero (XMR)?
Monero is one of the popular privacy coins in the crypto markets, it was initially released on 18 April 2014. The brain behind it was Nicolas van Saberhagen and the main aim was to design it for use with cryptocurrencies to solve some specific problems identified in bitcoin of which include the traceability of transactions, the Bulky script, irregular emission, etc. Monero is an open-source protocol with cryptoNote as its whitepaper, cryptoNote is an application layer or an abstraction level that specifies any shared communication protocols and methods used by hosts via a communication network. This is a way of hiding all operations details of a system to enhance the anonymity of transactions. Monera continues to grow with its priority of privacy and security first.
The usage of privacy features
To efficiently roll out its topmost priority, that is, privacy and security as stated above, monero employs an array of different privacy features or strategies to preserve its anonymity and untraceability. Monero is presumably the best anonymous cryptocurrency in the market today because of the usage of some powerful and resilient privacy features such as stealth addresses, Ring signatures, RingCT.
Stealth addresses: This privacy feature generate a new and different address for every transaction performed in order not to disclose the identity of the receiver and the sender, monero uses a version of the stealth address called the dual-key stealth address protocol (DKSAP). This version of the stealth address uses two pairs of cryptographic keys to generate a one-time payment address for every transaction.
Ring Signature: Ring signature as a privacy feature or strategy used in monero is set in minimum sizes to make all transactions private by mandate. This feature is a digital signature signed by an anonymous member of the group or a ring of members with a key. As part of the privacy feature, it should be computationally impossible to know which ring's member key was used to generate a signature.
RingCT: The introduction of the Ring Confidential Transactions (RingCT) feature is to hide the transaction amount. It allows for amounts used in transaction, origin and destination of all transactions to be hidden.
Mining Monero
Monero (XMR) just like Bitcoin uses the Proof of Work (PoW) consensus algorithm blockchain, but when it comes to the hashing algorithm, Monero employs RandomX. This is an ASIC (application-specific integrated circuits)- resistance but a CPU- friendly PoW consensus algorithm, a new block is created every two minutes and there is no maximum block size. But a block reward penalty and a dynamic block size encourage dynamic scalability.
Market Statistics of Monero (XMR)
Below are the market price statistics of Monero taken from coinmarketcap as of the time I was writing this task.
| Monero Price | $308.26 |
|---|
| Price Change 24h | $15.05.13% |
| 24h Low / 24h High | $268.87/$312.31 |
| Trading Volume 24h | $388,365,915.26 |
| Volume/Market cap | 0.07691 |
| Market Dominance | 0.31% |
| Market Rank | #26 |
| Market Cap | $5,049,558,758.89 |
| Fully Dilluted Market Cap | $5,049,558,758.89 |
This is the current price chart of monero, screenshot from coinmarketcap trading view
Some crypto exchange platforms that trade monero include;
Binance
Huobi
OKEx etc.
Describe the steps in creating a wallet for the Privacy Coin of your choice. (Screenshot required)
To create a wallet for Monero, I will first log in to the official website of monero by searching https://www.getmonero.org/ on my search engine.
I will then select Downloads from the top left corner of the home page.
I will choose GUI Wallet as the wallet type for my demonstration.
I will choose the Windows 64-bit (installer) download option because it matches my device.
I will exercise patience for the wallet installer to finish downloading.
I will then open the installer after the downloading is complete and install it by following the necessary steps given.
After the installation process is complete, I will open the wallet application and select the language I prefer and click on Continue.
I will now select the simple mode.
I will read the information about the simple mode and agree to the terms by marking the small box and click on next to continue.
I will now select Create a new wallet to start my wallet creation process.
I will give a user name for my wallet and save my Mnemonic seed and the Wallet restore height after and click on the Next option to continue.
I will input a strong password I want for my wallet. and click on the Next option.
At this stage, I will now click on the Create wallet option to create my wallet.
I will now enter the password I created for this wallet to access my wallet. and click on Ok
finally, I have successfully created my privacy coin wallet with monero.
Explain the reason you chose the Privacy Coin.
Monero has a very powerful and resilient privacy feature which makes it stands out among its counterparts, its privacy strategies used makes it computationally impossible to break via its walls, hence I am 100% sure that my transactions are in safe hands and not to worry about any third party issues, also, it has no optional privacy feature and it is fully private centered. This makes me love Monera, also, it has dynamic scalability. Unlike other types of privacy coins with a fixed scale, monero scalability is flexible, that is, it adjusts according to the number of blocks created and this makes it more preferable. Monera is one of the most popular privacy coins in the market, this is very good for trading since it will catch much attention.
Advantages of Monero
It has a very fair process of mining since unlike Bitcoin which uses ASIC mining hardware to mine, monero requires no special mining equipment. This means that one can easily mine by just downloading a monero wallet onto their laptop computers.
Monero uses less block time when creating a block as compared to its counterparts, it takes only two minutes.
It is a private coin with a very high privacy feature, it uses the best privacy features to preserve its anonymity. This makes it the most acceptable privacy coin in the market and even in the dark market.
Disadvantages of Monera
Because of the powerful privacy features of monero, it can be used to perform malicious transactions in the dark market.
Like all privacy coins, monero is still facing some legality issues and regulatory problems in some countries.
Because of the legality issues confronted by monero, it makes it geographically limited. Regions such as Africa, Asia, South America have not fully adopted it.
Conclusion
Monero is being criticized by some industry players that it promotes dark marketing and can be used for terrorist activities and payments because of its total anonymity feature, but on the other side of the coin, some say that privacy is a right and people may want to genuinely be secretive of their transactions. Anonymity does not mean one is doing malicious activities, but monero seems to be accepted by the majority and it is becoming popular and increasing in volume day by day and some even prefer it to the almighty Bitcoin. Some influential peoples including Elon Musk have even joined to advocate for the use of this kind of cryptocurrency, the crypto world is becoming interesting and I can not wait to see where it will end.
Thank you so much professor @levycore for this wonderful class, I have learned a lot, my regards to professor @alphafx.
You have been selected for 500SP Minnow Support Program and will be supported by Booming Curation Support. For more details about this program please check this post 500SP Minnow Support Program for Newcomers(Revised Edition) updated on 24/5/2021
Don't forget to attach your Achievement 1 post link to every of your post published in this Steemit Nursery community.
Hi @albertodecrutor, Thank you for taking my class in the 8th week.
This is the detailed assessment that you get from the results of writing the homework that you have created:
Review dan Feedback:
Your fundamental analysis is good, but it could be improved by adding some supporting pictures from your explanation.
Explanation of wallet creation is complete.
The way you explain is good and easy to understand.
Thank you!
thank you for reviewing my homework.