Crypto Academy Week 16 - Homework Post for @levycore || Privacy coin
Dear Steemians,
I am glad to be part of this week's lesson. Thanks to Professor @levycorefor giving us this excellent lecture on cryptocurrency privacy coins.
After going through the notes and researching this week's topic, I have decided to review what I have learned in my homework task.
I want us to look at what a privacy coin is and some of its advantages and disadvantages.
privacy coins refer to the group of digital coins that has the potential to provide a private and anonymous blockchain transaction in the crypto market, this is done by hiding the true identity of the source of the transaction and its destination. To make the transaction private, the user's real wallet balance and address are kept hidden and mixed with other multiple transactions to destruct data analysis of the accounts.
Unlike Bitcoin and other non-privacy blockchains which makes it possible for anyone to view both the public wallet address and transactions in the blockchain network, making it easy to keep track of people's deposit and withdrawal history. But privacy coins handle deals in both anonymity and untrackable of digital accounts. The anonymity makes the true identity of the person behind a transaction unknown and untrackable prevents the third party from using blockchain analysis to track the trail of the transactions. Some examples of privacy coins are,
- Dash
- Monero
- Zcash
- Beam
- Grim
and many more.
Advantages and Disadvantages of Privacy coins
Advantages of Privacy coins
- Privacy coins provide a high level of security to their holders, this makes them not easily hacked.
- It protects the assets of every user, making it easy for users to be well assured of their assets.
- Transactions made are only know to the user making it more private.
- The user has the full authority to decide when and how transactions should be carried out.
- Most privacy coins have large market caps making them easy to trade on the market.
Disadvantages of Privacy Coins
- Privacy coins are not transparent hence making people reluctant to adopt to make transactions, their assets may be compromised.
- These coins are normally used by hackers and fraudsters for the transaction of drugs and illegal materials.
- Privacy coins need a lot of resources for transactions and also have a slower transaction rate and high transaction fees.
Choose a Privacy Coin and perform a fundamental analysis of the coin in detail.
For the sake of this assignment, I will be analyzing Monero Privacy coin.
Monero is a privacy coin that was launched in 2014 by seven developers which five of them decided to be anonymous. People still believe that Moneo was created by the famous Satoshi Nakamoto who is also the inventor of Bitcoin. The basic goal of the Monero coin is to provide a platform for people to make private transactions and with anonymity. Unlike Bitcoin and other currencies which the transaction can be traced back to the person who did the transactions however Monero coins obscure the sender's and recipients' address by the use of highly advanced cryptography.
The team who invented Monero has privacy and security of blockchain transactions as their main priorities. This also comes with some level of protection for all its users.
Monero uses the egalitarian concept for its mining, with this principle every person considers equal and therefore deserves equal opportunities. The developers did not bank any contribution nor seek community support to further improve the digital coins, this has made it slow in transactions.
As of May. 30, 2021, Monero is ranked 27 on coinmarketcap, and it is trading at $261.62 with a market cap of $4,688,417,348.
Some Monero data on coinmarketcap
Monero all time market price chart
Difference between Monero and Bitcoin
Even though BTC is the most popular currency on the crypto market which uses a set of protocol to generate random name address for its users to protect their real identity yet this method provides less privacy to the user since bot the Bitcoin addresses and transactions are registered on the blockchain exposing it to the public to access. This makes it not private, the users can be tracked if the same address is linked to different transactions making it easy for other people to track the owner's transaction trend and identity.
Bitcoin transaction history is recorded on the blockchain, this makes it easy to identify bitcoin transactions involved in fraud, gambling, or theft hence the account can be easily blocked or suspended. But Monero transactions history are non-traceable this prevents their accounts been blocked or blacklisted by others. This can also lead to high activities of fraud and other illegal activities since the transaction histories cannot be traced.
Describe the steps in creating a wallet for the Privacy Coin of your choice. (Screenshot required)
Follow the steps below to create a Monera wallet.
- Go to the official website of Monero in your web browser and click on the Download button.
- I choose "GUI Wallet" to download
- Select the download option available based on the windows you are using. I am using 64-bit Microsoft windows hence I will select that.
Monero downloarding
- Follow the installation instructions to install your Monero app on your Computer.
Monero installing
- Launch your app and select the language that you prefer to use and click on "Continue"
- Select the mode that best suits you. I will select the simple mode for easy navigation and interaction on the app.
- Read the Terms And Conditions and mark the "Agree" button if you agree with their conditions and click on "Next"
- Select "Create new wallet"
- This page has your Wallet Mnemonic seed and your wallet restore height. Sve them in a secure place and click on "Next"
- Select a strong secure password for your wallet, and confirm the password in the text box.
- This page contains the summary information your wallet, click on "Create wallet"
- Type in your chosen password to log in to your wallet
- My account has been successfully created and ready for use. The home page has a lot of features that you can explore.
Explain the reason you chose the Privacy Coin. (State the advantages and disadvantages)
Monero( XMR) has an untraceable transaction history this feature gives users privacy over the asset transactions. It also helps ensures a safer network which prevents the risk of blocking accounts or blacklisting their units by others.
Monera is a good investment opportunity for investors. The coin has seen an increase in value by 137% between 15th Jan 2020 and 15th Jan 2021. This coin does not cost much to start since no sophisticated hardware is needed.
A normal household CPU can be used to mine it and also works on most operating systems.
Advantages of Monero(XMR)
Monero has a superior mining algorithm as compared to BTC and most cryptocurrencies.
Unlike BTC and most currencies that need highly modified computer hardware to run it, but Monero has made it easy to mine it using a common computer CPU.Monero has an Adaptive block size limit for transactions.
The average transaction time is 2mins and this time is almost constant and there is no delay in transactions, unlike other currencies which require you to pay more fees if you want your transactions to be fast. New Monero blocks are created to accommodate the rising demand hence controlling the transaction time.Monero has a dedicated and strong development and research team with impressive goals.
The Monero project has a great team of developers and more than 180 contributors making it one of the most trusted coins.
Disadvantages of Monero coin
- Monero does not have a lot of DApps, which makes it fewer interactives unlike other coins such as BTC which can be found on most platforms.
- Monero has not been generally accepted by most people.
- Almost 43% of the hash rate is controlled by just three pools, this makes it somehow centralized.
- Criminals can use Monero for the transaction of illegal drugs and also promote illegal activities since the transaction history is hidden and the person behind the transaction can not be traced.
Conclusion
To conclude, Privacy coins have many advantages likewise disadvantages to both the user and the nation. Just like any other currency, Monero has great potential for investments, and a thorough analysis should be done before doing any investment in any privacy coin.
Thank you for time
All the screenshots used for the illustrations are taken by me.
Hi @blessingkasabe, 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 of the Monero coin is already good, but you can dig deeper and add some additional images for proof of your analysis.
Your explanation on how to make a wallet is actually good, but unfortunately you didn't follow the guide to make a watermark on your screenshot. Look more carefully at the rules and guidelines before making the homework.
I want you to explain in more detail about the reasons for choosing the coin, the advantages and disadvantages are only a comparison which will make your statement stronger.
Your conclusion is too short.
Thank you!