What is Monero (XMR)? Explanation of this privacy coin
Monero (XMR) is a privacy coin: a cryptocurrency specifically designed to make transactions fully anonymous. While most cryptocurrencies allow transactions to be viewed publicly, Monero hides the sender, the recipient, and the transaction amount. This clearly distinguishes Monero from well-known coins such as Bitcoin or Ethereum. Although Monero (XMR) is widely used by people who value privacy, it is important to understand how the coin works technically, why it is so difficult to trace, and which alternatives exist that use similar technologies.What is Monero (XMR)?
Monero is a digital currency that runs on its own blockchain, just like other cryptocurrencies. The key difference lies in privacy and anonymity. While most blockchains are fully transparent, Monero uses multiple technologies to shield transaction data. As a result, outsiders cannot see who is sending funds, who is receiving them, or how much is transferred. Monero was launched in 2014 as a fork of another project called Bytecoin. Since then, it has built an active community and developer base focused on privacy, security, and decentralization. Monero (XMR) is not available on Coinmerce, but there are similar projects that focus on privacy or security. These are discussed later on this page.Summary
- Type of cryptocurrency: Privacy coin
- Purpose: Full anonymity for transactions
- Network: Own blockchain
- Launch year: 2014
- Key features: Stealth addresses, ring signatures, confidential transactions
- Use cases: Private payments and protection of financial data
Price and history of Monero (XMR)
Like other cryptocurrencies, the price of Monero is determined by supply and demand. Although XMR is not pegged to fiat currency like a stablecoin, the project has remained resilient thanks to its dedicated community and continuous technological innovation. Over the years, Monero has experienced various price movements. It saw strong growth during periods when privacy and anonymous payments gained attention, such as around 2017 and 2021. However, the Monero price remains sensitive to regulation and market sentiment, especially because governments often scrutinize fully anonymous transactions.Why is Monero a privacy coin?
Monero is often considered the most privacy-focused cryptocurrency. This is because it combines three core technologies to make transactions untraceable.What makes Monero transactions private?
Each Monero transaction uses three layers of privacy:- Stealth addresses: The recipient receives a unique, one-time address for every transaction, making it impossible to link payments to a single wallet address.
- Ring signatures: This technique mixes the sender‘s signature with those of others, so it is impossible to determine who the real sender is.
- RingCT (Ring Confidential Transactions): This feature hides the transaction amount, so no one can see how much XMR was sent.
Difference compared to transparent blockchains like Bitcoin
On Bitcoin or Ethereum, all transactions are visible on a public blockchain. With Monero, the blockchain is still public, but the transaction data itself is fully encrypted. This allows the network to remain verifiable while preserving user privacy.How does Monero work technically?
The technology behind Monero may sound complex, but it revolves around three core principles: privacy, security, and decentralization.Addresses, transactions, and shielding explained
Every user has a unique Monero address, but for each transaction a new temporary address (stealth address) is created. Transactions are signed using ring signatures, which use multiple public keys to hide the true sender.What does this mean for traceability?
Due to these privacy layers, Monero is extremely difficult to trace. Even specialized blockchain analytics firms cannot reliably track transactions. This makes Monero attractive to privacy-conscious users, but it also raises concerns among regulators.What is Monero used for?
Privacy in payments
Monero allows users to make payments without revealing who is involved or how much is transferred. This is useful in situations where financial privacy is important, such as donations or international payments.Privacy for wealth and transactions
Because addresses and balances are not publicly visible, it is impossible to see how much XMR someone owns or spends. This protects users from unwanted financial scrutiny.Monero mining and the network
Monero uses a Proof-of-Work (PoW) mechanism similar to Bitcoin, but with a key difference: it uses the RandomX algorithm, designed to promote fairness and decentralization.How Monero mining works
Anyone with a standard computer can participate in mining Monero. This prevents the network from being dominated by large mining farms or specialized hardware.Importance of decentralization
Monero‘s design ensures that the network is globally distributed and resistant to censorship, which is a core principle behind privacy-focused cryptocurrencies.Monero wallets: what you should know
Wallet types and secure storage
- Desktop wallets – such as the official Monero GUI Wallet
- Mobile wallets – apps for managing XMR on your smartphone
- Hardware wallets – physical devices that provide extra security
