What is Monero?
The cryptocurrency where privacy matters most
Privacy wasn’t one of Satoshi Nakamoto’s main concerns when he created Bitcoin. It was only covered briefly in the original Bitcoin Whitepaper, where he wrote:
… but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous.
In other words, every Bitcoin transaction is public – you can see which address sent Bitcoin to another address – but you don’t know who owns those addresses unless that person announces it to the world. However, a determined researcher can learn a lot about who owns an address, if they’re willing to devote time and effort. For instance, investigators were able to crack the Mt. Gox hack by tracing the use of a wallet owned by one of the suspects.
Monero – Focus on Privacy
Monero was launched in April of 2014 with the goal of developing a truly private cryptocurrency. Unlike many second-generation cryptocurrencies, it wasn’t a fork of Bitcoin. Instead, it was based off a new protocol called Cryptonote, which allowed for the privacy features the development team was looking for.
By default, all transactions in Monero are untraceable, meaning it isn’t possible to determine who sent payment to whom. In fact, unless you’re involved in the transaction, you can’t even tell how much Monero was sent.
Fungible and Untraceable
Because Monero transactions are opaque to anyone not involved, Monero is considered to be “fungible”, which means you can’t tell anyone Monero apart from another, or who had previously owned it. With Bitcoin, it’s possible to trace the life of a Bitcoin back to every previous owner. In some cases, that traceability has lead to Bitcoin gained through hacks or scams being “blacklisted”, meaning that some cryptocurrency exchanges won’t let you use those Bitcoins. If you happen to unwittingly end up with blacklisted Bitcoin, you may be out of luck. That scenario just isn’t possible with Monero.
Every time you receive Monero, your wallet automatically generates a new address that can be used only once. This helps eliminate the problem of address reuse found in cryptocurrencies like Bitcoin, which make unmasking the owner of an address much easier.
When you send Monero to someone, your transaction is automatically mixed with many other transactions, called a Ring, and signed by one of the senders in that Ring. It’s impossible to know who signed the Ring, so it makes your transaction untraceable.
Monero and the Darknet
Darknet markets such as Libertas have started moving away from Bitcoin and towards using Monero exclusively. When the Darknet market Alphabay was shut down by authorities, they were able to determine how much Bitcoin, Litecon, and Ethereum the owner had – but not Monero. Because of its privacy features, they couldn’t even tell how much Monero he had.
How to buy Monero
Unfortunately, Monero isn’t as easy to purchase as Bitcoin. You can’t buy Monero with a credit card, so you’ll have to use one of the cryptocurrency exchanges to buy Monero using Bitcoin.
Buy Bitcoin at Coinbase
To start, if you haven’t already, head over to Coinbase and sign up. Coinbase will let you use a credit card to buy Bitcoin, which is what you’ll be using to purchase Monero.
Sell Bitcoin for Monero at Binance
After you’ve purchased Bitcoin, you’ll need to sign up for a cryptocurrency exchange – we recommend Binance. It’s fairly easy to use, has good uptime, and is responsive to customer issues. After you’ve signed up, you’ll send the Bitcoin from Coinbase to Binance. Head to the Binance deposit page, find BTC in the list and click on the Deposit button to get your deposit address. Put that address into the field on Coinbase that lets you send Bitcoin.
After your deposit arrives on Binance, you’ll be able to head to the Binance XMR/BTC market where you can Buy XMR (the token name of Monero) using the Bitcoin you deposited.
If that all sounds too complicated, however, there may be some good news – there are good reasons to suspect Monero may soon be added to Coinbase, which would allow most people to purchase it with a credit card.