Crypto Academy Season 2 Week 8 Homework Post for (@levycore) - Privacy Coin [Monero]

It is no doubt that Bitcoin prevents the identification of individuals directly as it does not disclose the real name of the person sending it, since there is no need for adding personal information for the sake of privacy but then, these transactions can be traced. For instance, If a company decides to buy $1 billion worth of BTC and then announce it on their handle, it is very easy for people to trace the transactions not because the company's name is written on the transaction memo but because the transaction is broadcasted on a public blockchain following the transparency feature of Bitcoin. We cannot say that the transaction didn't secure the user's privacy since no name was included but we could say it wasn't private enough. Bitcoin and many more cryptocurrencies are pseudonymous (they use characters to represent wallet addresses instead of names) but not completely private. In this light was where privacy coins came into existence.

Privacy coins do well to keep transactions private and away from the eyes of the public. Privacy is required as a part of human rights if I am not wrong, so this would be the very reason for privacy coins. There are a few privacy coins that are very well known, these coins are Monero, Zcash, Verge, and many more. In this post, I will be focusing on Monero as a privacy coin.

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Choose a Privacy Coin and perform a fundamental analysis of the coin in detail.

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Basic Understanding of Monero

Launched in 2014 as an open-source, privacy cryptocurrency built on the blockchain, a fork of Bytecoin, Bitmonero was brought to life. Compared to cryptocurrencies like Bitcoin and Ethereum that preaches transparency, it aimed at providing privacy.

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Monero has three main purposes, Security, Privacy, and Decentralisation. Monero is completely private as it uses one-time created addresses that are not linked to the addresses of the sender or receiver and ring signature. As part of Monero privacy process, it handle transactions by splitting the amount transferred into smaller amounts before transferring, making the transaction difficult to trace.

Mining Monero

Monero can be mined on a personal computer with OS such as Windows, macOS, and Linux with no need for a complex mining hardware but based on preference, it can be mined using GPU and application-specific integrated circuits (ASICs). Mining can be done by joining pools as well. Monero uses CryptoNight Proof of work algorithm when mining.

Monero Scalability

Monero, is very scalable compared to Bitoin. As a privacy coin, it is capable of processing 1000T/S when fully functioning. It takes 2 minutes/18 connfirmation to validate a transactions and add new blocks.

Buying and Exchanging Monero

Monero can be purchased on a cryptocurrency enable ATM machine, or on exchanges. Monero is listed in several major exchanges including Binance, Kraken, Poloniex, Huobi, HotBit and so on.

Market Overview

Monero is currently ranked 26th on coinmarketcap (this ranking is based on market capitalization), it is currently traded at 294.01, a Circulating Supply of 17,923,422.95 XMR, a 24 hours volume of $307,279,418 and a market cap of
$5,269,607,578.

Describe the steps in creating a wallet for the Privacy Coin of your choice. (Screenshot required)

• To create a Monero wallet, I logged into https://www.getmonero.org/

• On the homepage, click on downloads to see the wallets that can be downloaded.

• Click on Gui Walle, to get wallets for PCs

• The GUI wallet section appears after which windows installer is clicked on.

• After clicking on the Windows 64bit Installer, it begins to download.

• Once download is complete, you launch the exe file and click on next on the monero installing page.

• After the installation is done, click on finish.

• Launch the Monero Wallet Application and click on continue as the language is set on default, although you can change the language.

• Click on the mode of wallet you prefer, for me, i chose the simple mode option

• Agree to the privacy policies and other policies on the Monero wallet app and click on Next.

• The wallet creation page appears and I choose the "create a new wallet" option.

• The wallet information is displayed, including the name of the wallet and the mnemonic of the wallet. Wallet should be saved securedly.

• Set password for wallet and click on Next.

• The summary of the wallet appears. Click on the create wallet.

• Enter password to log in successfully into the Monero wallet.

• The wallet is created fully.

Explain the reason you chose the Privacy Coin. (State the advantages and disadvantages)

There are several reasons for people choosing coins but for me, I chose monero for reasons such as

• Ther are no previous mining before the project began.
• Privacy of Funds, addresses and balance at all time.
• Approximately 2 minutes to confirm transactions.

Advantage of Monero

• It guarantee highest level of privacy, anonymity and security as transactions are not tracable.
• it is fast and transactions are comfirmed in 2 minutes on a average.
• Monero is scalable and can perform large transactions.

Disadvantage of Monero

• It can be used for illegal transaction
• It can be used to launder money
• It is supported by by a few wallet and a few exchanges do not have it listed on their platform due to privacy.

Conclusion

In the future, there is a possibility that the governments of countries would be up agaisnt privacy coin but currently, Monero privacy coin is solving a lot of privacy infringement issues and this has made it hold a strong position in the crypto market. I hope it does well in the near future.

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Cc: @levycore