Hundreds of cryptocurrencies have been launched with the intention of greater privacy, however many have seen varying levels of success. This is where Monero comes in…
There is currently no way to buy XMR directly. So the only way to buy XMR is to purchase BTC to use on an exchange, and then switch it to XMR.
Step 1: Choose Your Trading Platform
Firstly you will need to decide on your cryptocurrency trading platform and create an account there. The choice of platform isn’t very important as a beginner, what really matters is a trading platform that you are comfortable using..
Choose one of these platforms and complete the follow steps to get started:
Go to Binance and create a new account if you do not already have one.
Once your account has been confirmed, log in to your Binance account and click on funds at the top right, then “Deposits Withdrawal”.
Look in the “Bitcoin” list and click the Bitcoin deposit button. Then a series of numbers appears in the “BTC Deposit Address:” field. You must copy this series for the next step. This is your bitcoin wallet address.
STEP 2: BUY BTC
The second step is to get your Bitcoin, you can do that at a broker such as BTCdirect .
If you’re buying BTC for the first time from these brokers, you will be asked to confirm your bank account.
Upon payment you will be asked to enter a bitcoin address. You must fill in the address that you have copied at Binance.
STEP 3: WAIT UNTIL YOUR BTC HAS ARRIVED
Once you have purchased Bitcoin and entered the correct BTC deposit address with the payment, you have to wait until the BTC arrives in your wallet.
This process can take up to ½ hour, so don’t worry if it’s not immediately visible on the exchange.
STEP 4: BUY XMR
Once your Bitcoin has arrived at your trading platform, it’s time to buy some XMR.
Go to the Binance trading exchange (click the top left on exchange and choose Basic) and use the search function within BTC Markets to find the XMR/BTC trade.
Once on the XMR/BTC trade page you can look in the left box marked with Buy XMR. Here you can decide how much XMR you want to buy using your Bitcoin.
If you then press Buy XMR your order will be placed. When the order is filled you will see your number of XMR on the right-hand box or on your balance page.
Congratulations you’re now the proud owner of XMR.
What is Monero?
While Bitcoin was originally advertised as providing users with anonymity they desired by offering a high-level of privacy by hiding user identities behind alpha-numeric addresses, known as wallets.
However, this approach overall proved ineffective, as most cryptocurrency addresses and transactions are recorded on the blockchain. This makes them publicly available, and even though an individual bitcoin address is pseudonymous, it can attach to many transactions over time. This leaves a paper trail, which makes it easier for friends, family and even government agencies to get a better sense of the address owner’s purchasing trends.
Many think that bitcoin keeps their transaction history completely private. Unfortunately this is often not true, agencies such as law enforcement have used blockchain analytics to track down bitcoin transactions and its users.
Monero is an open-source cryptocurrency that was launched in April 2014, with the aim of solely being focused on user privacy. When the developers involved released this innovative cryptocurrency into the wild, they decided not to keep any aside for themselves. The team has relied on user donations and the wider community to help further development of the currency.
A Focus on Privacy
Monero’s unique privacy features come in the form of ring signatures and stealth addresses, which obscure the identity of senders and recipients. Ring signatures combine or ‘mix’ user account keys with public keys that are obtained from Monero’s blockchain. These create a ‘ring’ of possible signers, meaning outside observers, such as law enforcements, cannot link a signature to a specific user.
The idea of the ring signature was first described by academics from MIT and The Weizmann Institute in a 2001 paper. Using this technology has helped provide legitimacy for Monero at a critical time when much of the cryptography used in blockchains has not withstood the test of time.
While Monero users do have the ability to keep their transaction history private, they also have the option to share this information if they so desire. Each Monero account has, what is known as, a view key. This permits anyone holding it to look at the account’s transactions.
While the original ring signatures obscured the senders and recipients involved in Monero transaction, it does not hide the transaction amount. However, a recent update called RingCT implemented a new ring signature that conceals the value of individual transactions and the identity of senders and recipients, thus making it even more private.
In addition to leveraging ring signatures, Monero enhances privacy through what is known as stealth addresses. These are randomly-generated, one-time addresses created specifically for each transaction on behalf of the recipient. With this feature, recipients can create a single address and any transactions they receive goes to separate, unique address. As a result of this, Monero transactions cannot be linked or traced to the published address of the sender or recipient, making tracking practically impossible.
Adoption and Fungibility
Because Monero provides such a high-level of privacy, it can offer what is known as fungibility. This means that each individual unit of currency can be substituted for another. Another way of putting this is that every coin has equal value.
Because a transaction history of individual bitcoins is recorded on the blockchain. Coins that have been associated with certain events, such as fraud or theft, can be shunned by merchants and exchanges. Similar to stolen fiat currency and what is known as “marked notes”.
However due to monero’s untraceable nature, no two coins are distinguishable from one another. Because of this, Monero has enjoyed an interesting adoption since its inception. Many dark web marketplaces such as AlphaBay and Oasis have embraced the cryptocurrency, due to popular demand by its users.
“Following the demand from the community, and considering the security features of monero, we decided to add it to our marketplace,
Like many other cryptocurrencies, Monero offers interested users the opportunity to mine blocks for currency. Many individuals also have the ability to join mining pools, so they can also mine monero by themselves.
Monero uses a proof-of-work (PoW) algorithm, which was designed to be accessible to a wide range of processors. This specification that was included to make sure that mining was open to many different parties instead of just large mining pools. This makes it ideal for beginners with an interest in mining cryptocurrency.
Due to the private nature of Monero, wallets are a much sought after commodity, however two of the most popular cold wallets: TREZOR and Ledger, currently do not support it. However there have been reports it will be supported on TREZOR 2, while Ledger have claimed that support for the currency is in it’s roadmap.
If you would like the store your Monero outside of an exchange, the community favourite seems to be a web wallet called MyMonero. This is owned and created by Richard Spagni, one of the leading developers of the cryptocurrency.