What You Need To Know About Monero; A Cryptocurrency Altcoin

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MONERO (XMR)

Monero is part of the group of fast-growing cryptocurrency altcoins. Altcoins are the alternative crypto currencies to Bitcoin. Since its start in 2014, XMR has gained major milestones both in price and acceptability.

Unlike other currencies, Monero was specifically made as a privacy coin. It allows the transfer of funds between individuals in complete privacy and anonymity.

This is one of the reasons Monero has gained a lot of interest. The interest is not only by investors but also by criminals. It is actually one of the most used channels by hackers to transfer funds that have been stolen and ransom.

Below is a price graph of Monero’s price that enables us to appreciate its price growth curve.

Courtesy: Yahoo finance.

In the first five months of 2021, Monero has gained value by over 400%. It is currently valued at around 7 billion dollars indicating growth in interest in the coin.

According to Cryptwerk, there has been an increase in the number of merchants accepting Monero over the years. In 2020, there were around 900 merchants compared to 40 in 2018.

Within the same period, transactions on the Monero network went up to around 23,000 per day.

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CHALLENGES

As highlighted, Monero’s concept of privacy has allowed criminals and launderers to exploit the network with minimal repercussions.

This makes it one of the most preferred channels for moving illicit money. This opaqueness has caught many government’s eyes and some are starting to act. Australian and South Korean governments have called on the removal of Monero from trading exchanges.

This has in turn caused a huge blow to the traders in those countries. Actions by the regulators are expected to continue as illicit money continues to cause a challenge across the globe.

Having a free and unrestricted channel to move illicit funds acts as a motivator for criminals to continue with their activities. The channels make them feel safe.

I firmly believe that soon there will be more governments acting on the coin. This will be done by totally banning or lobbying for more openness of the coin.

This in turn will make the users look for other avenues. Broad and punitive actions by governments could reduce the attractiveness of the coin. In turn, this will erode the gains it has gotten so far.

STRENGTHS

As there is always a good and a bad side to everything in life, Monero has its bright side. One is on privacy. Monero technology is based on privacy and confidentiality.

A key parameter in the financial space. Through enhanced security, funds movement through the network has become safer. This is important because it makes it difficult for hackers to gain access.

It also facilitates global commerce. Also, an increase in the number of merchants offering the service has ensured there is more accessibility and choice.

This makes people use the coin more. Increased inclusivity has resulted in the growth of demand for the coin resulting in increased returns for the investors.

Traditional channels could also ride and gain knowledge from the Monero technology. They can do this by ensuring they have safer and up to date systems.

CONCLUSION

It is still very early to determine the direction Monero will take into the future. Its underlying concept of being a privacy coin has pros and cons.

In the future, there might be increased scrutiny by the regulators with the intention of limiting the movement of illegal funds. This may occur in form of enhancing due diligence processes for the users of the platform.

An alternative is that there could be a complete ban as has happened in some countries. These actions could keep off the illicit money movers (some of the biggest users of the technology).

This will result in a decline in the value of the coin. Alternatively, financial institutions might take interest in the concept of a privacy coin. In turn, they may bring some of their mainstream business to the network.

If this happens, then Monero has a possibility of becoming the money movement channel of choice. This will result in its growth in value hence offering good returns to its investors.

In the short term, Monero continues to grow and promise great returns. Have you heard of Monero? What are your thoughts on it? Let me know in the comments section below.