When Monero was first introduced to the public, people became interested in it because of its privacy features. Ever since it was created, privacy has been on as its default setting. Unlike Bitcoin, which is only pseudonymous, Monero is entirely anonymous. It means that it allows untraceable transactions and users remain anonymous all the time.
Since it cannot be tracked and users are unidentified, nobody will know how much you have at the current time or even in the past. For an additional layer of security, you can go to XMRWallet.com where you can also create a Monero account. This online wallet allows you to store your XMR coins using your original seed or paper wallet seed. Every single transaction you make with the online wallet is secure and only happens in your local browser.
Monero has three different algorithms that allow it to achieve privacy and secure transactions:
Ring signatures: This technology is where the cryptocurrency’s privacy is centered on. These signatures hide the sender’s information in which it utilises a technique where users sign the operation. The ring signatures make it impossible for anyone to tell who the real sender was for a specific transaction that took place.
Ring Confidential Transactions (RingCT): This privacy algorithm was available on the network since January 2016. It allows users to keep their transaction amounts private. With this technique, you can send someone some Monero, and you two are the only people who will know the exact amount that you sent. The transaction, however, will remain detectable on the blockchain but there is no way for anyone to determine the amount that was transacted.
Stealth addresses: To keep accounts anonymous and untraceable, Monero has added privacy to the transaction’s receiver. Using stealth addresses activates what is known as a “spend key” which will keep the receiver’s address obscure. A sender is required to create a spend key address for the transaction receiver. This spend key is where the sender will direct the funds. To see the Monero coins, the receiver needs a “view key,” which will allow him or her to check the blockchain and locate the funds. This method will cause the transaction to be recorded on the blockchain. However, the receiver and the sender are the only ones who can determine where precisely the payment was sent.
Fungibility
Fungibility is an essential currency function, which means that you cannot tell one coin apart from another. Out of all cryptocurrencies, Monero is considered as the true fungible coin in the crypto industry. Others, such as Bitcoin, can be tainted, which is why they can be used in criminal activities, such as paying off ransomware hackers.
If the funds are stolen, or an individual transaction was hacked, the Bitcoins used in the exchange can be tracked. As a result, merchants and trading platforms can reject these coins. In other words, cryptocurrencies without fungibility are not necessarily interchangeable, so some of them can no longer be spendable.
Monero has an inherent ability to go untraced, which preserves the privacy of the users. This safety feature also gives you peace of mind since you do not have to be concerned about how or where your Monero was used before it came into your possession.
