EOS is a smart contract cryptocurrency platform that has attracted attention for two claims: it seeks to completely eliminate transaction fees as well as allowing users to conduct millions of transactions per second.
Launched in 2018, EOS is superficially similar to other smart contract platforms such as Ethereum and Ripple, but it promises to supersede them through the aforementioned features.
The ultimate goal of EOS is to provide a platform that supports industrial-sized decentralized application hosting, decentralized enterprise storage solutions, and smart contract capability, combining existing smart contract functionality with cloud computing for an all-in-one technology solution.
While EOS has technically not launched yet, it is currently possible to buy EOS tokens on the Ethereum blockchain, the sale of which will fund the launch of the EOS blockchain itself later in 2018.
EOS’ developers are making bold claims, but they have shown themselves capable of backing those claims, making EOS a worthwhile investment for crypto investors interested in smart contract platforms.
EOS launched on January 31, 2018 by Block.one, a cryptocurrency development firm based in the Cayman Islands. The specifics of EOS were revealed in a white paper published in 2017, with the full platform set to launch as open-source software on June 1, 2018. To fund development, Block.one initiated a sale of EOS tokens on the Ethereum blockchain. EOS also boasts one of only two B-ratings from U.S.-based financial rating agency Weiss, with the other being awarded to Ethereum. (1, 2, 3)
As mentioned above, Block.one seeks to use EOS to solve two of the biggest problems with cryptocurrencies: transaction fees and transaction speed. Most cryptocurrencies have slow transaction times due to the nature of blockchain technology, with Bitcoin speeds in particular becoming increasingly slow due to the size of its blockchain. Fees are used to speed things up by paying miners to prioritize certain transactions, but these too have become increasingly expensive with certain cryptocurrencies such as Bitcoin. (4)
EOS aims to solve the scalability problem of currencies like Bitcoin by using multi-threaded technology, allowing it to run on multiple computer cores. Additionally, EOS uses a decentralized proof-of-stake system for its consensus protocol, making it similar to systems such as Cardano and Stellar that utilize all machines connected to their network to verify transactions, keeping the network from becoming centralized. (5)
EOS also seeks to function as an operating system, much like Windows or OS X, allowing programmers to develop decentralized applications. Two examples of platforms that utilize EOS technology are Steemit, a Medium-like blogging and content creation platform that is based on blockchain technology, and BitShares, a fully decentralized cryptocurrency exchange. (6) (7)
In addition to this, EOS’ native token, in additional to serving as currency, also doubles as bandwidth and storage, allowing anything contained on the EOS network to be instantly delivered to anyone who is connected to it. How much storage and bandwidth is allocated to each EOS user is determined by how many tokens they own. EOS tokens will allow users to participate in governing the blockchain, also in proportion to how many tokens the user owns. (8) (9)
Although not formally released, EOS has become popular among cryptocurrency enthusiasts and developers. As mentioned above, both Steemit and BitShares are being developed with EOS technology. Everipedia, a Wikipedia-like online encyclopedia, is also using EOS technology to incentivize content creation on its platform as well as defeat censorship. By using decentralized EOS tokens to store and deliver their site, Everipedia will be able to evade censorship from countries such as Turkey and Iran that ban Wikipedia and similar sites. (10) (11)
EOS is effectively positioning itself not merely as a cryptocurrency, but as a software development suite and content delivery system. EOS’ potential to host decentralized websites and applications as well as combat online censorship have made it a hot commodity among traders and a worthwhile investment.
EOS cannot be mined due to the proof-of-stake system it will use to verify transactions.
Much like Cardano, EOS’ proof-of-stake system verifies transactions not through mining, but through achieving consensus from all users on the network. This is part of what makes EOS’ claims of faster transaction speeds and no transaction fees possible, but it precludes users from being able to mine their own EOS. (12)
While it is technically possible to mine EOS at the moment, this is because the EOS tokens available for sale right now are based on the Ethereum blockchain, meaning that EOS miners are technically mining Ethereum. Once EOS’ own blockchain launches, this will no longer be possible. (13)
1. What is EOS? EOS, or EOS.io, is a smart contract-based cryptocurrency platform that is focused on providing laser-fast transactions and eliminating transaction fees. It purports to do this through the use of multi-threaded technology, which will greatly speed up computing bottlenecks. This feature distinguishes it from other cryptocurrencies and has spurred interest on the part of investors and developers.
2. What makes EOS different than Bitcoin or Ethereum? EOS is primarily distinguished through its aim to eliminate transaction fees and speed transaction times, two issues which have long plagued cryptocurrencies. Aside from this, EOS is functionally similar to Ethereum because it aims to be an all-encompassing computer platform and not just a cryptocurrency.
3. Who created EOS? EOS was developed by private company block.one based off a white paper published in 2017. The actual EOS platform was not released until 2018, but EOS tokens based on the Ethereum blockchain were made available for sale before the launch of the actual EOS blockchain, with the intent of funding EOS’ operations. Released as open source software in June of 2018, EOS was intended to solve scalability problems present in existing cryptocurrencies such as Bitcoin. Its speed and reliability have led to it being adopted by various websites and services, such as Steemit, a popular blogging platform, and Everipedia, a Wikipedia-like encyclopedia. EOS’ nature allows for the creation of decentralized websites and platforms that do not rely on a central server, making them resilient to cyber-attacks and Internet outages as well as routing around country-level censorship.
4. Why was EOS created? EOS’ developers were inspired by scalability problems with existing cryptocurrency technology. Bitcoin and other cryptocurrencies can only process a limited number of transactions per second due to the fact that each transaction results in the creation of additional blocks on the blockchain, a process that takes time. Additionally, because new blocks are generated through mining, cryptocurrency users must pay a mining fee in order to incentivize the processing of their transactions. As cryptocurrencies grow in popularity and more people begin using them, transaction times lengthen and mining fees skyrocket. This in turn hinders the cryptocurrency’s growth, as users are reluctant to use a currency that takes a long time to process transactions and charges outrageous fees for doing so. While a number of solutions have been proposed to increase transaction times, such as increasing block size and implementing technologies such as segwit, no cryptocurrency has yet managed to eliminate fees entirely and make transactions instantaneous. EOS is the first cryptocurrency to solve this problem.
5. How does EOS speed transaction times and eliminate fees? Unlike other cryptocurrencies, EOS’ blockchain is designed to use the RAM, CPU, and network bandwidth of computers that are connected to its network; indeed, it cannot function without using these resources. While this makes running and EOS-enabled system more taxing in terms of computer power, it greatly speeds transactions through the use of all available power. EOS utilizes multi-threaded technology, which allows it to be run on multiple computer cores simultaneously, greatly increasing the amount of computing power it has access to. To incentivize users to contribute computing power to the EOS blockchain, EOS periodically rewards users with additional EOS tokens proportionate to the amount of EOS that they hold. This is known as “proof-of-stake” due to the fact that EOS users are “staking” tokens as part of the network’s operation. In effect, this eliminates user fees and replaces them with inflation, allowing users to send and receive money for free at the cost of a potentially infinitely expanding supply of coins.
6. Who controls EOS? While EOS’ development is guided by block.one, its open-source nature means that anyone can contribute to its evolution. EOS users who stake their tokens are also allowed to participate in governing the network through a form of direct democracy, with each user having a vote proportionate to the amount of EOS that they own. This also makes it impossible for any one user to gain disproportionate control over the network, preserving the currency’s nature as a decentralized, worldwide computing system.
7. What is proof-of-stake? Proof-of-stake is a system for generating new tokens on a cryptocurrency blockchain by using the computing power of existing users. It is distinguished from proof-of-work, also known as mining, in that users of a proof-of-stake cryptocurrency merely need to stake their tokens in a wallet in order to benefit. As such, proof-of-stake cryptocurrencies do not require specialized, expensive computing hardware in order to use. Individuals who stake their tokens will receive additional tokens periodically in proportion to the amount of tokens that they have staked, in a fashion similar to how a savings account will accrue interest over time. Many proof-of-stake cryptocurrencies require a minimum stake amount in order to receive benefits, with this amount varying over time due to the size of the blockchain.
8. Is EOS safe to use? EOS has become a popular cryptocurrency because its fast transaction speeds and lack of mining fees guards it against many common cryptocurrency attacks, such as double-spending attacks. A double-spending attack is when a user spends the same digital token twice, akin to how some people will tie a string to a coin before putting it in a vending machine, allowing them to pull the coin out and spend it again while still fraudulently getting something from the machine. Double-spending attacks take advantage of the period of time when a cryptocurrency transaction is initiated and when it is completed. EOS’ instant transaction times mean that double-spending attacks are effectively impossible. While no computer system is 100 percent perfect, EOS has proven itself to be a safe and useful cryptocurrency.
9. Is EOS better than Bitcoin and Ethereum? “Better” has little meaning when it comes to cryptocurrencies with widely different functions and feature sets. EOS may be faster and cheaper to use than other cryptocurrencies, but it has other downsides that inhibit its utility in some situations. Bitcoin, as the most well-known cryptocurrency in the world, has an advantage in that it is accepted by more vendors and used by more people. Ethereum is a computing platform on which a large number of applications are built. Ultimately, you will need to determine what you are planning to use cryptocurrencies for before you can determine which one is best for your needs.
10. How do I get EOS? Like other cryptocurrencies, EOS can be purchased on an exchange using fiat currency or other cryptocurrencies. You can also receive it in transactions. If you already possess EOS, you can stake it in the EOS wallet to earn more of it, though you may have to stake a minimum amount in order to receive any benefits.
11. How do I send or receive EOS? Similar to other cryptocurrencies, EOS is kept in wallets, which can be digital or physical constructs. Wallets are identified on the EOS blockchain through wallet addresses, which are random strings of letters and numbers. To send EOS to another user, you need their wallet address; to receive EOS, you need to give your wallet address to the person sending it to you. Like other cryptocurrencies, EOS wallet addresses can be generated as QR codes that can be scanned with a smartphone or tablet.
12. What are the upsides of using EOS? As a cryptocurrency, EOS shares many advantages with other cryptocurrencies, such as total payment freedom, international availability, and 24/7 transactions. Unlike other cryptocurrencies, EOS lacks payment fees entirely, meaning you can make transactions for free. EOS transactions are also much faster than other cryptocurrencies, making it a useful investment for those who are interested in speed. Finally, EOS’ smart contract functionality, when combined with its speed, has made it popular among app developers.
13. What are the downsides of using EOS? EOS carries with it many of the disadvantages of other cryptocurrencies, such as price fluctuations. EOS also cannot be mined, unlike other cryptocurrencies, and is not as popular as Bitcoin and other competing currencies, meaning it is accepted by fewer vendors and is thus not the best when it comes to financial transactions. This may change in the future if EOS’ lack of transaction fees and fast transaction times become a selling point for more users.
14. Can I make money with EOS? Like any other investment, it is possible to make money trading EOS, though nothing is guaranteed. EOS’ primary selling point is its lightning-fast transaction times and lack of transaction fees, which have helped it carve out a significant niche in the world of cryptocurrency. However, like with any investment, there is no guarantee of what will happen in the future. Ultimately, it is up to you to determine whether EOS’ feature set makes it a good investment.
15. Can EOS be mined? No. Unlike most cryptocurrencies, EOS generates new coins through a proof-of-stake system instead of proof-of-work, aka mining. The primary difference between proof-of-stake and proof-of-work is that while proof-of-work requires machines to solve complex math problems to create new coins, proof-of-stake requires that users use their existing coins to contribute computing power to the network. Using proof-of-stake is why EOS lacks transaction fees; individuals who stake their coins (and thus contribute to the network’s functionality) are rewarded with additional coins as an incentive. This also means that in order to make money with EOS, you must already own EOS coins in order to stake them. While it was possible to mine EOS prior to its formal launch, this was because EOS was still operating on the Ethereum blockchain, meaning that EOS miners were technically mining Ethereum. Since the launch of the EOS blockchain, mining EOS is impossible.
16. Where does EOS’ value come from? EOS is like any other currency or commodity: its value is determined by the usefulness that its users find in it. As a cryptocurrency that has solved the problem of scale with fast transaction times and no fees regardless of how many users are on the network, EOS has carved out a place in the cryptocurrency economy. As long as users find EOS valuable in this regard, it will have monetary value on the market.
17. How is the price of EOS determined? Like any other commodity, EOS’ value is determined by the laws of supply and demand. Unlike other cryptocurrencies, EOS’ proof-of-stake system gives the currency continuous inflation, meaning that the supply of EOS will not level off in the future like Bitcoin’s will. This will have an effect of controlling how expensive individual EOS tokens get.
18. Could EOS ever become worthless? Yes. Any currency or commodity has the potential to become worthless if people stop seeing it as valuable or useful. While cryptocurrency users have embraced EOS due to its ability to solve problems of scale, there is no guarantee that it will grow in the future. It is a relatively young cryptocurrency that lacks the longevity of Bitcoin and other competitors. All investments are a risk, meaning you should be prudent with where you invest your money and how much of it you invest.
19. Is EOS a scam? No. EOS has proved itself to be a useful and adaptable cryptocurrency that is capable of fulfilling a wide variety of needs in the modern economy. Additionally, due to the decentralized consensus system that EOS users, all users have a say in the governance of its blockchain. Like other cryptocurrencies, it is virtually impossible for any single user or entity to gain control of the network, since doing so would require taking control of the majority of systems using the network. Indeed, one could argue that cryptocurrencies are less of a scam than regular fiat currencies due to their decentralized nature, lacking central banks and governments that can manipulate interest rates and currency supplies.
EOS represents a unique niche in the smart contract ecosystem: an all-in-one system for creating, hosting, and delivering Internet content.
EOS makes it possible to host any kind of web content—from blog posts to videos to podcasts and music—in a decentralized form that is impossible to censor. This makes it a valuable commodity in an era in which social media and the Internet is increasingly centralized and censorship is arguably becoming a problem.
Furthermore, EOS pledges to solve the problem of cryptocurrency scalability, which has dogged the growth of Bitcoin and other cryptocurrencies. By eliminating expensive fees and shortening transaction times, EOS could easily become as useful and indispensable as traditional financial systems.
EOS’ one major problem is that a good deal of what it promises is just that: a promise. Because the EOS blockchain has not launched yet, there is no definite way of seeing how the platform can live up to its claims. While Steemit and other platforms have achieved success through using EOS technology, there are no guarantees that EOS will work as advertised when it finally becomes available to the public.
Having said this, EOS has the potential to become one of the leading cryptocurrencies on world markets. Its unique niche of offering content creation and delivery services that can’t be censored by governments or corporations sets it apart from its competition, and its pledge to eliminate transaction fees and speed up usage have plenty of appeal to all crypto users.
Because of this, EOS is worth keeping an eye on for both smart contract enthusiasts and traditional investors alike. No other major platform is doing what it is doing.
Cardano, a top smart contract cryptocurrency
Cardano (ADA) is a blockchain smart contract technology platform known for running the Ada cryptocurrency.
Launched in 2017, Cardano aims to be an all-in-one cryptocurrency platform featuring smart contracts, side chains, multi-party computation, decentralized applications, metadata, and countless other functions.
Similar to Ethereum, Ripple, and Stellar, Cardano seeks to be far more than a cryptocurrency: its goal is to function as a complete technology and financial platform, meeting the needs of 21st century finance.
While still relatively young, Cardano’s rapid development, suite of features, and technological pedigree have caused it to become one of the hottest cryptocurrencies. Interest in Cardano is only sure to increase once more of its features come online.
Crypto investors with an interest in smart contract platforms would do well to check Cardano out, because it promises a number of innovations that will allow it to possibly outcompete Ethereum, Ripple, and other competitors in the market.
Cardano is primarily distinguished from Ethereum by its use of a Recursive InterNetwork Architecture (RINA), which allows for faster transactions and more security compared to other smart contract platforms. (3)
Similarly to Stellar, Cardano also uses a system of decentralized consensus in order to maintain order on the blockchain and verify transactions. All machines connected to the Cardano network participate in vetting transactions, making it impossible for any one actor to take control of the network and misuse it. Any machine connected to the Cardano network can participate in this process, though as with Stellar, not all machines will be treated equally. (4)
As part of its decentralized consensus model, Cardano uses the Ouroboros proof-of-stake algorithm to verify the integrity of transactions. Cardano designates anyone who participates in the verification of transactions as a “slot leader,” whose job is to generate new blocks in the blockchain. Anyone who owns a Cardano Ada coin is automatically regarded as a slot leader. (5)
Most notably, Cardano features a unique ledger design that was created to increase the flexibility of smart contracts utilized on the network. Cardano’s ledger separates account values from the logic behind why values are moved from one account to another, which distinguishes it from virtually every other cryptocurrency, where both entities are lumped together. This promises to make Cardano one of the best platforms for arranging sensitive financial transactions. (6) (7)
IOHK has stated that their primary objective with Cardano is to develop a platform that makes it possible to implement banking systems in areas where they have traditionally been too expensive to implement. Several practical implementations of Cardano have already been achieved. For example, Greece’s national education and research network has begun using Cardano to verify student diplomas. (9) (10)
While Cardano is still quite young, its pedigree as a creation of Ethereum’s co-founder, its existing features, and its ambitious development schedule have made it a cryptocurrency to watch. If you have an interest in smart contract platforms, Cardano is worth adding to your portfolio.
Like Ripple and Stellar, it is not possible to mine Cardano, but it is possible to increase your stash of it by using its unique architecture.
Cardano’s proprietary cryptocurrency Ada (named after Ada Lovelace, one of the inventors of the computer) uses a proof-of-stake algorithm instead of a proof-of-work algorithm like Bitcoin and most cryptocurrencies. This means that new coins are generated on the network not through mining, but through the coins that are already existent. (11)
What this means is that anyone who owns Ada coins and is connected to the Cardano network via a Daedalus wallet (the official wallet of Cardano) can receive additional Ada without doing anything. Even better, some Ada holders can receive transaction fees if their personal stash is large enough. It’s akin to receiving interest in a savings account, with the caveat that a user must keep their Daedalus wallet online in order for it to work. (12)
Effectively, this means that any Cardano holder can participate in the growth of the Ada supply and also make money without having to invest in expensive computer hardware.
1. What is Cardano? Cardano is a decentralized smart contract platform powered by blockchain technology and utilizing the ADA cryptocurrency. Cardano’s purpose is to serve as an all-purpose computing and currency solution, incorporating application development, smart contracts, metadata, and many other features. While still under development, Cardano has already attracted attention from major players due to its existing offerings and future potential.
2. What makes Cardano different from Bitcoin or Ethereum? As a smart contract platform, Cardano has more in common with Ethereum than Bitcoin, which is merely a cryptocurrency. Cardano’s main difference compared to Ethereum is that it uses Recursive InterNetwork Architecture (RINA), which makes transactions much faster and more secure.
3. Who created Cardano? Cardano was launched in 2017 by Charles Hoskinson, one of the co-founders of Ethereum. Development is managed by Hoskinson’s company, Input Output Hong Kong (IOHK), and was intended as a means to launch banking systems in areas of the world where they have traditionally been too costly or risky to implement. While initially similar to Ethereum, Cardano quickly distinguished itself by offering a low-cost, independently verifiable banking system that cannot be tampered with or is otherwise at risk of human error or corruption.
4. Who controls Cardano? Development of Cardano is handled by Input Output Hong Kong. Unlike other platforms such as Stellar, Cardano is not open-source.
5. How does Cardano work? In a fashion similar to Ethereum and other blockchain-powered platforms, Cardano uses a decentralized consensus process in order to verify transactions. All machines that are connected to the Cardano network are responsible for processing transactions, meaning that individual actors cannot hijack the network or otherwise take advantage of it. As part of this process, Cardano uses the Ouroboros proof-of-stake algorithm to check the integrity of all transactions. The Cardano network uses the term “slot leader” to describe any machine that participates in the verification process. Any user that owns Ada (Cardano’s native cryptocurrency) is eligible to become a slot leader and participate in the governance of the network. In addition to this, Cardano features a unique smart contract system which separates account values from the logic behind why those values are transferred between accounts, a sharp contrast from platforms like Ethereum where both of these entities are merged together. Because of this additional security feature, Cardano
6. What is Cardano used for? As mentioned above, Cardano’s original purpose was to make implementing banking systems less cumbersome and expensive. It has already seen a number of practical implementations; for example, Greece’s educational authorities use Cardano to verify student diplomas. IOHK is also developing a virtual machine for Cardano similar to the EVM system used by Ethereum, which will considerably strength the computing power of the network. In addition to this, IOHK plans to add a new smart contract programming language called Plutus that will further insulate users from security breaches, and it is also working on adding compatibility with more traditional programming languages such as C and Java. IOHK’s intent is for Cardano to serve as an all-purpose transactional and computing platform, which is what has drawn interest from crypto enthusiasts and serious banking clients.
7. What is Ada? Ada is the base token of the Cardano network, similar to how Ether is the base cryptocurrency of Ethereum and XRP is the base cryptocurrency of Ripple. Similar to other cryptocurrencies, Ada is kept in wallets and can be bought, sold, or traded via exchanges and direct transactions.
8. What makes Ada valuable? All currencies, including normal fiat currencies and cryptocurrencies, have value because people see them as valuable. Cardano’s potential as a computational and smart contract platform has given Ada value in the cryptocurrency community, and its practical applications have also drawn considerable attention.
9. Where does Ada come from? New Ada tokens are generated via a proof-of-stake mechanism, whereby existing Ada holders pool their computational power to ensure the network’s continued operation and receive newly generated coins in return. Machines who contribute to the Cardano network in this manner are called “slot holders” and all those who hold Ada coins are eligible to participate in the network’s governance. This is a stark contrast with Ethereum, where new coins are generated via mining, and Ripple, where the supply of XRP is fixed and unchanging.
10. How does one obtain Ada? Ada can be bought, sold, and traded via exchanges and direct transactions. To receive or send Ada, you must possess a wallet, a digital tool that is designed to store an infinite amount of Ada. Wallets can be found for free online and also come in hardware form. Wallets are identified on the Cardano network through wallet addresses. In order to send Ada to another user, you must possess their wallet address; the reverse is true if you wish to receive Ada. Wallet addresses are rendered as a series of numbers and letters, though as with other cryptocurrencies, they can also be generated as QR codes that you can use with a smartphone or other mobile device. If you already possess Ada, you can obtain more by staking your Ada via the Cardano network. While staked tokens cannot be moved or sold, you will receive additional Ada in proportion with the amount of Ada you have staked to the network. Think of it like a savings account, where you earn interest in proportion to the amount of money you have saved.
11. What are the upsides of using Cardano? As a smart contract platform, Cardano has greater utility and versatility than cryptocurrencies like Bitcoin, who lack its additional features. Cardano boasts a number of features that differentiate itself from other smart contract platforms such as Ethereum, most notably its separated contract validation system and Ouroboros proof-of-stake technology. For individuals who need to make sensitive financial transactions, Cardano’s focus on security makes it an attractive option, and its transaction speed is considerably faster than Ethereum’s due to its unique architecture. The implementation of the Plutus language will add a further layer of security and also potentially make Cardano a more appealing platform for those interested in smart contract transactions. Finally, as a cryptocurrency platform, Cardano possesses all the advantages that cryptocurrencies bring, such as low transaction fees, payment freedom, and worldwide availability.
12. What are the downsides of using Cardano? As a cryptocurrency platform, Cardano suffers all the problems associated with cryptocurrencies, such as constantly changing value, sluggish transaction speeds compared to more traditional banking methods, and a lack of acceptance among merchants. Cardano is not as well-known as other major cryptocurrencies and platforms such as Ethereum and Bitcoin and is subsequently more difficult to use. In addition to this, many of Cardano’s features are not fully implemented, meaning that much of its value is theoretical. Technological changes in the future may lead to Cardano becoming much different than its creators’ original plans, a factor that should be considered when investing in the platform. Finally, Cardano cannot be mined, which is a demerit for more hardcore cryptocurrency users.
13. Is Cardano safe? No currency or financial instrument is 100 percent safe. Investment carries an inherent risk; you are using some of your money to fuel growth in a business or asset with the hope that you will see a return on what you spent. Cardano’s attractiveness as an investment is fueled by its enhanced security protocols compared to other cryptocurrencies as well as its future potential, such as its implementation of a virtual machine and its use as a low-cost, low-risk banking platforms. While Cardano shows opportunity for growth, the future is unpredictable and many of its proposed developments may not work out as planned. This means that, like any other investment, there are no guarantees with Cardano. Before investing in any cryptocurrency—or indeed investing in anything at all—you should carefully consider the risks. By doing your homework and going into investing with a clear mind, you will be able to minimize your risk potential and improve your chances of earning a return on what you put in.
14. Is Cardano a scam? As noted above, Cardano’s security protocols have allowed it to avoid the scandals that have affected Ethereum, Ripple, and similar platforms. Cardano’s adoption by governments and financial institutions show that it possesses a level of trustworthiness that make it a worthwhile investment. While there is no telling how the platform might evolve in the future, Cardano’s basic structure gives it a value and security that few cryptocurrencies can rival.
15. If Cardano is more advanced than Ethereum and other cryptocurrencies, why don’t people use it instead? Cardano serves a different purpose than other cryptocurrencies. In contrast to Bitcoin, which is merely a store of value, Cardano offers a full-service computational and smart contract platform, making it attractive for developers and other individuals beyond investors. As for Ethereum, Cardano’s additional security features make it ideal for those who are concerned about security and privacy when it comes to their financial transactions. Finally, many of Cardano’s features are not fully implemented yet, meaning that some investors will favor more developed platforms such as Ethereum. This could change in the future as Cardano is improved by IOHK, but for now, Cardano occupies a separate niche in the cryptocurrency world, which is why it can coexist alongside other currencies and smart contract platforms.
16. Can Ada be mined? Ada cannot be mined due to the fact that Cardano uses a proof-of-stake system to generate new coins. Many cryptocurrencies such as Bitcoin use a proof-of-work system, in which computers solve math equations and process blockchain transactions in exchange for a share of new coins generated, a process colloquially known as “mining.” Proof-of-stake cryptocurrencies generate new coins by having existing coin holders stake their coins in the network to process transactions, receiving new coins in proportion to the amount of tokens that they stake. This considerably lowers the barrier to earning money with Ada, since you don’t need expensive computer hardware in order to generate new coins; you simply need a Cardano wallet with Ada that has been staked. However, because Cardano generates new coins in this fashion, you cannot mine Ada as a result.
17. Can I make money with Cardano? Cardano’s adoption by banking institutions indicates that major financial players consider it a worthwhile investment. While there are no guarantees of profit when it comes to investing, by researching carefully and not making any rash decisions, you can make money by investing in Cardano. An additional consideration is that many of Cardano’s promised features have not come online yet, and the value of Ada will likely increase when they do. Always do your homework before you make any financial decisions.
18. How is the price of Ada determined? Like any other currency or commodity, Ada’s price is governed by the law of supply and demand. The value of Ada and other cryptocurrencies is somewhat volatile due to the fact that supply is limited due to the fact that new coins are generated through a proof-of-stake mechanism. However, Cardano will retain a certain degree of value so long as other people find it to be a useful platform.
19. Could Ada ever become worthless? There is no such thing as a currency or commodity with an eternal, unfixed value. Numerous currencies have become worthless over the centuries due to government malfeasance, economic collapse, and other factors. As such, there will always be a risk that Ada’s value could drop to zero. Ada is currently valuable due to the fact that investors and financial institutions find it to be an attractive platform, but that could change in the future due to various unknown factors. As such, you should take this into consideration when making your investment decisions.
Smart contract cryptocurrencies represent the next generation of crypto: beyond merely serving as stores of value, they function as entire financial and banking systems unto themselves. Ethereum and Ripple have led the pack when it comes to smart contract cryptos, but Cardano is quickly catching up due to its advanced features.
Cardano’s unique programming language and use of decentralized consensus has helped build it into a robust smart contract system, offering security and speed beyond that of Ethereum and Ripple. Without a centralized authority to dominate the blockchain, Cardano’s growth is only limited by its userbase, which is exploding every day.
Most importantly, Cardano’s proof-of-stake algorithm makes it one of the easiest ways for long-term crypto investors to grow their bag. Without having to invest in ASIC miners or purchase expensive computers, Cardano users can participate in the network’s growth, verify transactions, and make a tidy profit all at the same time. Few cryptocurrencies can match this level of benefits to their users.
Cardano’s major demerit is that it is not very old and is untested to a certain degree. However, the currency has proven itself through both its suite of features and the unique ways that people have found to use it.
If you have an interest in smart contract cryptocurrencies, looking into Cardano is worth your time. It promises to be one of the leading currencies in its market and potentially a pillar of world finance in the future, so it behooves you to get involved now.
Stellar, the protocol for the future of money
Stellar (XLM) is an open-source value exchange protocol and cryptocurrency designed to make exchanging money simple and easy.
Founded in 2014 and based on Ripple, Stellar has since forked into its own project with an entirely separate network and modus operandi. Stellar’s primary purpose is to function as a real-time gross settlement and remittance system, making financial transactions simple and easy and backing them with the power of the blockchain.
Since its founding, Stellar has taken its place alongside Ripple, Ethereum, and other similar cryptocurrencies to provide an all-in-one network for exchanging money and value, giving it a stability and resiliency that many cryptocurrencies lack.
For these reasons, Stellar is a worthwhile investment for your crypto portfolio.
Stellar was founded in 2014 by Jeb McCaleb, one of the creators of Ripple and the creator of eDonkey, an early peer-to-peer file sharing protocol that preceded Napster, LimeWire and similar services. McCaleb is also known as the founder of the now-shuttered Bitcoin exchange Mt. Gox, though he sold it to Mark Karpelès not long after creating it. Stellar’s development is headed by the nonprofit Stellar Development Foundation. (1) (2)
Initially based on the Ripple protocol, Stellar introduced a number of changes to its code that fundamentally diverged it from Ripple. Not long after Stellar’s foundation, it was forked from Ripple and became its own entity. In response, the Stellar Development Foundation created a new consensus algorithm for the network, bringing it online in 2015. Stellar and Ripple have since diverged so much that there is no compatibility and almost no code shared between the two platforms. (3) (4)
Similarly to Ripple, Stellar is not simply a cryptocurrency, but is designed as an all-in-one network for financial transactions. Stellar exists as a software protocol on financial servers and uses the Internet to form a global network for exchanging money. Unlike Ripple, which is centralized and proprietary, Stellar is an open-source platform that utilizes an open ledger which anyone can view and contribute to. (5)
Stellar’s central ledger is changed whenever users on the network engage in transactions. Utilizing Stellar’s central consensus protocol, transactions are monitored and changes to the ledger are made according to agreement among all servers connected to the Stellar network. This is a fundamental difference from Ripple in that no one entity or individual can take control of the Stellar network, since agreement on ledger changes must be obtained from all parties involved in Stellar. (6) (7)
This open-source approach to transaction validation gives Stellar more flexibility than Ripple, since any machine connected to the Stellar network can participate in the validation of transactions, though not all machines will be treated equally. Additionally, Stellar is much friendlier towards third-party developers than Ripple, encouraging creators to design their own add-ons and projects for the Stellar network and helping to raise money for their work. (8)
Stellar’s open-source nature has made it a hit among financial institutions in the developing world who are seeking stable and reliable platforms to build on. For example, the banking software company Oradian has begun using the Stellar network to connect and coordinate operations between microfinance institutions in Nigeria, while other similar partnerships have since been unveiled in India, sub-Saharan Africa, and the Philippines. (9) (10)
Stellar has also gained traction in the developed world as an alternative to Ripple and traditional banking mechanisms. In 2017, Stellar and IBM formed a partnership designed to increase the speed of the Stellar network and improve the efficiency of transactions. IBM also seeks to use Stellar to develop a new “cross-borders payment solution” to make transferring money around the world an easy and painless process. (11) (12)
Stellar is also distinguished from Ripple by its inflationary structure. While Ripple works to keep the amount of currency in circulation stable, Stellar automatically increases its money supply by one percent each year. This rate of increase is hard-coded into the system and cannot be modified by miners or any other entity. (13)
It’s because of all this that Stellar has become a worthwhile investment option for cryptocurrency traders interested in “smart contract” currencies. Like Ethereum and Ripple, Stellar’s framework for financial transactions gives it a strength that gives it extra credibility in the world of traditional finance.
Like Ripple, it is not possible for individuals to mine Stellar.
At the inception of the Stellar network, 100 billion Stellars were created. The only way that additional Stellars can be made is through the aforementioned inflationary structure, which caps the increase by one percent each year. This inflation happens automatically on a weekly basis, with the new Stellars created distributed throughout the network via direct voting. (14)
Because of this, mining Stellar is impossible; the only way to obtain Stellar is to buy it via an exchange, buy it via the Stellar network directly, or receive it as a result of inflation voting.
1. What is Stellar? Stellar is a decentralized digital-to-fiat currency transfer protocol. Its original purpose was to facilitate money transfers between different currencies in a quick and inexpensive fashion. The Stellar network uses Lumens as its native token, similar to how Ethereum uses Ether or Ripple uses XRP. Stellar has since been embraced by various services who seek to offer multi-currency payment systems.
2. What makes Stellar different from Bitcoin or Ethereum? Stellar is similar to Ethereum in that it is designed to be a fully-fledged payment system and not merely a currency. In this, it is distinguished from Bitcoin in that it has a large number of functions beyond merely serving as a medium of exchange. Stellar is specifically designed to function as an intermediary for fiat currency transfers, making it an able tool for those who want to deal in multiple currencies easily.
3. Who created Stellar? Stellar was founded in 2014 by Jeb McCaleb, who is best-known for his role in founding Ripple. He was also responsible for creating eDonkey, a peer-to-peer file-sharing protocol similar to Napster, as well as the once-famous Bitcoin exchange Mt. Gox, though he sold the exchange to Mark Karpelès shortly after its founding. Initially similar to Ripple and sharing code and functionality with the platform, the two have since diverged considerably. Stellar is an open-source platform that allows any developer to contribute to its advancement. Additionally, in contrast to Ripple’s centralized system for verifying transactions, Stellar uses a ledger system that is more in line with Bitcoin and other cryptocurrencies that operate on a consensus model.
4. Who controls Stellar? The development of Stellar is officially helmed by the Stellar Development Foundation, a nonprofit. However, as an open-source platform, independent developers can freely contribute to Stellar if they wish. Additionally, Stellar operates on a consensus model, with changes to the system only possible if a majority of users consent to them. This makes Stellar more similar to decentralized crypto platforms such as Ethereum.
5. Why was Stellar created? Stellar’s original purpose was to serve as a middleman for fiat currency exchanges. Given the increasingly interconnected world economy, demand has increased for easy, low-cost exchange services, particularly among residents of developing economies who work for foreign clients. However, converting currencies can be difficult and costly, particularly when it comes to less-popular currencies that do not play a large role in international finance. Stellar was developed as a means to allow individuals to convert from one fiat currency to another without paying expensive fees or enduring long transaction times. This friendliness to finance in the developing world has made Stellar popular among banking institutions in poorer and less-developed countries. For example, the Stellar network is now utilized for microfinance transactions in Nigeria, the Philippines, and other developing countries. Given the often-shaky nature of finance in the developing world, Stellar lends a stability and trustworthiness that is badly needed in these countries. Stellar’s currency exchange functionality has also attracted the attention of international finance and technology firms, with IBM seeking to use the Stellar network to develop cross-border payment platforms that make transferring money around the world a simple process.
6. What are Lumens? Lumens are the base cryptocurrency of the Stellar network, akin to how XRP serves as the base cryptocurrency of Ripple. Like other cryptocurrencies, Lumens can be bought, sold, and traded at exchanges and via wallets.
7. What makes Lumens valuable? Lumens are valuable because people find utility in them, same as any other currency, fiat or crypto. Stellar’s usefulness as a cross-currency trading platform has helped Lumens become a valuable commodity in the cryptocurrency economy.
8. Where do Lumens come from? Upon the launch of the Stellar network, 100 billion Lumens were created. Additional Lumens are created through an inflationary structure in which the overall supply increases by one percent each year. This process is initiated once per week, and the new Lumens are distributed throughout the network via a direct voting process. This is another crucial difference between Stellar and Ripple, the latter of which has a fixed and unchanging supply of currency in circulation.
9. How does one obtain Lumens? Similarly to other cryptocurrencies, Lumens can be purchased, sold, or traded. Unlike other cryptocurrencies, Lumens cannot be mined due to the fact that the only way to increase the Lumen supply is through the inflationary process. Lumens are kept in wallets, digital or hardware units that can contain an infinite supply of Lumens. Wallet addresses are used to identify individual wallets on the Stellar network and transfer Lumens between users. To send Lumens, you must obtain the wallet address of the person you are sending it to; to receive them, you must provide your wallet address to the sender. Wallet addresses are rendered as a series of numbers and letters, though they can also be generated as QR codes to expedite transfers using a mobile device.
10. What are the upsides of using Stellar? Stellar, as mentioned above, is tailored towards users who need to quickly and cheaply convert money from one fiat currency to another. If you need to make frequent exchanges between various currency pairs, Stellar is an ideal platform to use. While similar to Ripple in many respects, Stellar’s open-source nature and its decentralized control structure give it an antifragile nature that make it better for certain types of computing and financial tasks. Finally, Stellar possesses many of the existing advantages of cryptocurrencies, including low transaction fees, worldwide functionality, and total payment freedom.
11. What are the downsides of using Stellar? As a cryptocurrency platform, Stellar suffers from many of its downsides, such as a lack of acceptance among merchants, sometimes-slow transactions due to the necessity of blockchain verification, and constantly fluctuating value. Additionally, as a relatively new platform, many of Stellar’s promised features have yet to be implemented or have only been implemented in a basic form. Because of the unpredictability with which the Stellar platform may evolve, the network may exist in an entirely different form years down the line. Finally, Stellar cannot be mined, which is a turnoff for some power crypto users.
12. What are some ways that Stellar is used? Due to its original function as a middleman for fiat currency transactions, Stellar is frequently used as a platform to exchange various types of fiat currencies. While Ripple has also been used for this purpose, Stellar’s decentralized, open-source structure makes it far easier to implement the platform for use in developing countries, where options to convert currency are far more limited. As mentioned above, financial and technology giants have also begun using Stellar in order to speed and simplify cross-border payment processing in a manner similar to more conventional platforms such as TransferWise. Due to Stellar’s relative newness, new uses for the platform are still being theorized and developed.
13. Is Stellar safe? No currency or financial system, including crypto and fiat, is 100 percent safe from abuse. However, Stellar has introduced a number of innovation that arguably make it safer than Ripple, from which it is descended. Decentralized control of the Stellar network makes it virtually impossible for individual actors to take control of Stellar due to the fact that network consensus is necessary in order to introduce major changes. Open-source development also allows a faster rate of innovation compared to Ripple, as users are able to contribute to the platform’s advancement instead of waiting for updates to be pushed forward by the Stellar Development Foundation. It is in part because of this that Stellar has avoided some of the scandals that Ripple has been involved in, including being fined for violating the Bank Secrecy Act in 2015. While the future of Stellar is not guaranteed, thus far it has been proven to be a reliable store of value and transaction system.
14. Is Stellar a scam? As mentioned above, Stellar has avoided many of the problems that have plagued Ripple, most of which stem from Ripple’s centralized control and opaque development process. Stellar’s widespread adoption among financial institutions in the developing world is precisely because it provides a level of banking security that is often hard to come by in these countries. While there is no telling how the platform will continue to evolve in the future, at the moment, Stellar has proven itself to be a trustworthy means of exchange.
15. If Stellar is more advanced than Bitcoin and other cryptocurrencies, why don’t people use it instead of Bitcoin? While Stellar may technically boast superior functionality in some areas compared to Bitcoin, Ethereum, or Ripple, it ultimately serves a different purpose. Pure cryptocurrencies such as Bitcoin are not designed to facilitate financial transaction or aid banking security; they are intended purely as a source of value and exchange. Stellar is designed not merely to be a currency, but to be an all-in-one network for the facilitation of cross-border payment exchange. This means that it will inevitably be used by those who are looking for different features and functions than other cryptocurrencies can offer. Ultimately, Stellar serves a different function than other cryptocurrencies that lack its feature set, and this means there will be a place for all of these currencies in the crypto ecosystem for the near future.
16. Can Stellar Lumens be mined? Unfortunately, no. This is because Stellar does not use a proof-of-work system for creating coins, in which miners are responsible for processing transactions. Uniquely, Stellar also does not use a proof-of-stake system either. Instead, additional Lumens are created through a process known as inflation voting. The Stellar network automatically increases the supply of Lumens by one percent each year, a process that occurs automatically each week in order to prevent rapid inflation and devaluation of the currency’s value. Systems that are connected to the Stellar network are eligible to receive additional Lumens through a voting process that occurs automatically. It is unlikely that this system will be changed, meaning that inflation voting is the only way to receive new Lumens, aside from purchasing them directly.
17. Can I make money with Stellar? It is possible to make money with any investment provided you do your research and make prudent decisions. Stellar’s adoption as a cross-border payments system has fueled much of its popularity, particularly with financial institutions in the developing world. It also possesses a number of inbuilt advantages over Ripple, namely its lack of centralization and its open-source nature. However, there is no such thing as a guaranteed payoff; all investments, including cryptocurrency investments, carry risks. To safeguard yourself, you should determine beforehand what your investment goals are and never invest money that you can’t afford to lose. If you go into it with a clear head, you can use the Stellar network to make money.
18. How is the price of Stellar Lumens determined? Like all currencies and commodities, Lumens are governed by the law of supply and demand. Due to Stellar’s unique system of increasing the monetary supply via inflation voting, Stellar Lumens have a more consistent price than other cryptocurrencies, though they are still subject to the peaks and valleys that are common in crypto investing. As mentioned above, however, Stellar Lumens will retain value so long as investors and financial institutions believe that Stellar has inherent value.
19. Could Stellar Lumens ever become worthless? Yes, due to the fact that many currencies and commodities have suddenly lost their value over the centuries. No currency that has ever existed has ever maintained a fixed, unchanging value; currencies retain value so long as users find them valuable. While Stellar Lumens have accumulated considerable value in the short time that Stellar has been active, there is no guarantee of what might happen in the future, so take that into consideration when making your investing decisions.
Stellar may have begun life as an offshoot of Ripple, but its developers have taken it in a decidedly different direction, establishing it as one of the hottest commodities in the “smart contract” tranche of cryptocurrencies.
Stellar provides the advantage of a robust computer network with which to process and tabulate financial transactions, coupled with a decentralized structure that makes the network impossible to hijack or hack. Stellar provides solid technical and economic backing for a wide variety of projects, particularly those reliant on open-source software and solutions.
Furthermore, the Stellar Development Foundation’s support for third-party development has helped the currency grow by leaps and bounds, allowing it to compete with Ripple’s superior marketing and centralized structure.
For cryptocurrency investors, Stellar is worth keeping an eye on for these reasons. Smart contract cryptos such as Stellar, Ethereum, and Ripple represent a new evolution in blockchain technology. Beyond serving as a store of value and a transaction mechanism, cryptocurrencies like Stellar provide all the necessary tools and infrastructure to serve as financial platforms in and of themselves.
It is because of this that Stellar is a worthy investment for crypto investors looking to diversify their portfolios. Few cryptocurrencies can match the stability, reliability, and potential for growth that it has.
Monero, the blockchain of anonymity
Monero (XMR) is an open-source cryptocurrency that emphasizes privacy and decentralization above all else.
Debuting in 2014, Monero’s main selling point is total anonymity. Unlike other cryptocurrencies such as Bitcoin or Ethereum, Monero transactions cannot be traced or tracked, making it ideal for users who value their online privacy above all else. Monero’s focus on privacy has made it popular on the black market and other people looking to keep their financial activities hidden from the prying eyes of police.
In addition to this, Monero’s egalitarian mining structure makes it one of the easiest and most lucrative coins to mine, with even low-end users able to get in on the action.
Monero’s unique features and potential for growth make it one of the most important cryptocurrencies for any investor to own.
Monero was launched in April 2014 by a pseudonymous BitcoinTalk forum user called “thankful_for_today” under the name “BitMonero,” a reference to both Bitcoin and “monero,” the Esperanto word for coin. The name was shortened to “Monero” not long after. (1) (2)
Monero is based on the CryptoNote protocol, a cryptocurrency design created by pseudonymous author Nicolas van Saberhagen in 2013. CryptoNote was designed to fix a fundamental flaw in Bitcoin and similar cryptocurrencies: while they promise anonymity, it is still possible to track transactions due to the ledger keeping a public record of everything that happens on the network. (3) (4)
Monero fixes this by using ring signatures to obscure spenders’ addresses with a randomly selected group of other spenders, making it far more difficult to narrow down who has conducted which transaction. Additionally, Monero also uses stealth addresses to make it impossible for anyone other than the sender and the receiver to uncover the destination address of a transaction. These features make Monero all-but impossible to trace and track through the network. (5)
Monero saw much of its growth in the year 2016, largely due to its adoption by black market traders, who were interested in its anonymity features. In particular, the popular darknet website AlphaBay used Monero as its primary currency until its shutdown in July 2017. (6)
In 2017, Monero further enhanced its privacy with the adoption of the RingCT protocol, based off of Confidential Transactions, an algorithm created by Bitcoin Core developer Gregory Maxwell. RingCT adds additional protections to Monero transactions by hiding the amounts of money being transacted in each exchange. This change further enhances Monero’s reputation as one of the most secure and anonymous cryptocurrencies available. (7)
Additionally, Monero has gained steam as a means of transaction due in large part to Bitcoin’s increasingly slow transaction times and high fees. Many online vendors that already accept Bitcoin have begun accepting Monero as well. Due to Monero’s unique features, cryptocurrency experts assert that it is one of the most important currencies and the most likely to survive a hypothetical crash in the market. (8) (9)
Even if you have no interest in black market transactions, Monero’s privacy features are worth considering. Given that online anonymity is fast becoming a thing of the past, Monero stands alone among cryptocurrencies in guaranteeing security to the vendors, traders, and buyers who use it.
Monero is perhaps the easiest major cryptocurrency to mine due to its unique, egalitarian design.
In contrast to Bitcoin and Bitcoin-derived currencies, Monero is based on the CryptoNight proof-of-work algorithm, which was explicitly designed to be accessible to a much larger range of computer hardware. While it is still possible to form and join mining pools like with other cryptocurrencies, Monero’s low barrier to entry means that pools cannot monopolize mining like they do with other coins. (10) (11)
Monero is notable in that it is one of the only major cryptocurrencies where CPU mining is still profitable. The official Monero client even includes a CPU miner built in, allowing casual users to mine coins without much effort, though users with access to GPU-enabled computers or an ASIC miner will be able to mine more coins more quickly, as is the case with all other cryptocurrencies. (12)
The egalitarian architecture of Monero allows websites to mine coins by installing services such as Coinhive, which pool the CPU processing power of all users who access the site. Both well-known sites such as Salon and black market ones such as The Pirate Bay have used Coinhive in order to mine Monero by taking advantage of their users’ CPU power. In particular, Salon has sold Coinhive as an alternative to ads, which most users block through the use of browser ad-blocking plugins. (13) (14)
Website Monero mining has come under fire due to the fact that many sites that use it do not inform their visitors of what is happening. Furthermore, cybersecurity experts have cited the possibility of hackers using Monero mining scripts to insert malware into websites and attacking users’ computers. Because of this, many anti-virus and anti-malware programs block Coinhive and other website mining scripts, and script-blocking browser plugins block them as well. (15)
1. What is Monero? Monero is an anonymous cryptocurrency targeted at consumers who want to make transactions in total privacy. While functioning similarly to other cryptocurrencies, its unique anonymizing features have made it popular among those who want as much privacy in their financial life as possible.
2. What makes Monero different from Bitcoin? Unlike Bitcoin, Monero transactions are completely anonymous and are not publicly viewable on the blockchain. Monero wallets are also anonymous and no users other than those who have access to the wallet itself can tell how much money is a Monero wallet or what transactions it engages in. Given the greater popularity of and scrutiny towards Bitcoin, this has led to Monero being adopted by privacy-conscious consumers.
3. Who created Monero? Monero launched in 2014 under the name “BitMonero” by Bitcointalk forum user “thankful_for_today.” The launch was poorly received due to severe problems with block time, block reward, and other issues, with “thankful_for_today” leaving the forum and ceding development to a team lead by “Johnny Mnemonic.” In 2016, Monero experienced rapid growth due to its adoption by darkweb markets such as AlphaBay and Hansa Market, who were attracted by its privacy features. In 2017, it experienced further growth after adopting Gregory Maxwell’s Confidential Transactions algorithm, which masks the amount of Monero in transactions.
4. Who controls Monero? Monero is still managed by the same development team that took over in 2014, but it is an open source cryptocurrency and anyone can contribute to its development.
5. How does Monero’s anonymity work? By default, cryptocurrencies are more anonymous than credit or debit card transactions because crypto transactions do not contain any identifying information other than the wallet addresses involved. However, in the case of Bitcoin and similar cryptocurrencies, all transactions are publicly logged on the blockchain and are visible to anyone who knows at least one of the wallet addresses involved. Moreover, it is possible to see how much Bitcoin is in a Bitcoin wallet by using publicly available information on the blockchain. This means that if someone knows your wallet address, they can track all of your Bitcoin transactions. Monero allows anonymous transactions through the use of ring signatures, which group multiple transactions together, making it much more difficult to determine which transaction is going to which wallet. Monero also uses “stealth addresses,” individually-generated addresses that make it impossible for anyone to determine the destination of a transaction. Finally, as mentioned above, Monero obscures the actual amount of money exchanged in transactions. Because of these features, Monero offers near-total anonymity in the realm of financial transactions, and is popular for primarily these reasons.
6. What is CryptoNote? CryptoNote is the proof-of-work hash algorithm that Monero is built upon, distinct from SHA-256, the algorithm that Bitcoin uses. It is because of CryptoNote that Monero has all of the privacy features that it is known for. Additionally, CryptoNote allows Monero mining to be more egalitarian than Bitcoin mining since it cannot be mined easily with dedicated hardware; the vast bulk of Monero mining is done with consumer-grade computers.
7. Is Monero safe to use? Monero has retained its place in the cryptocurrency economy due to its unique anonymity features. In a world in which people’s information is constantly being tracked, many users are looking for ways to protect themselves from unwanted snooping, be it governmental or from the private sector. Monero is one means by which these users are taking back their privacy from the prying eyes of social media sites and other online entities. While Monero is more difficult to obtain and use for newbie crypto users, its unique features make it worthwhile for those who want to minimize the risk of being snooped on while engaged in commerce.
8. Is Monero better than Bitcoin? “Better” is a subjective term. If your goal is to keep your transactions from being spied upon by outside forces, Monero is certainly better than Bitcoin. However, if you are looking to engage with the widest possible number of vendors and consumers, Bitcoin is a better option due to its greater popularity. Ultimately, Bitcoin and Monero serve entirely different functions and whichever one is better is based on what you want to accomplish.
9. How widely is Monero used? As mentioned above, Monero picked up steam in 2016 and 2017 due to its popularity among dark web markets, for whom privacy and anonymity are paramount. However, it has since been adopted by a wide variety of exchanges and vendors. It has also gained popularity because its transaction times are considerably faster than Bitcoin’s. However, Monero’s reputation as a “black market” cryptocurrency has impeded its adoption in certain markets due to the fear of being associated with illegal activity.
10. How do I get Monero? Like other cryptocurrencies, you can purchase Monero at an exchange using other cryptocurrencies or fiat currency, receive it as part of a transaction, or mine it using computer hardware.
11. How do I receive or send Monero? Much like other cryptocurrencies, Monero is kept in a wallet and sent and received via wallet addresses. Wallet addresses identify particular wallets on the Monero blockchain and consist of a string of random numbers and letters; for reasons of security, Monero addresses are much longer than other cryptocurrency addresses. Additionally, some Monero transactions require a payment ID, a separate string of letters and numbers that acts to further secure and anonymize the transaction. To send Monero to another user, you simply need their wallet address and a payment ID if necessary; if you are receiving Monero, the other person requires your address and ID. Much like other cryptocurrencies, Monero addresses can be generated as QR codes which can then be scanned by smartphones or tablets for ease of use.
12. What are the upsides of using Monero? As a cryptocurrency similar to Bitcoin, Monero shares many of that cryptocurrency’s upsides, including total payment freedom, low fees, and 24/7 transactions. In addition to this, Monero’s built-in privacy features make it ideal for those who require anonymity in their financial transactions. All Monero transactions are anonymous by default and there is no way to turn this feature off, meaning that you cannot accidentally expose yourself when using the cryptocurrency. If you want to take back control of your online life, Monero is an easy means to do so.
13. What are the downsides of using Monero? Like other cryptocurrencies, Monero is vulnerable to price fluctuations and other issues. Additionally, Monero’s anonymity features have led to it becoming associated with the black market, which has limited its penetration among merchants, who do not want to be seen as being affiliated with illegal activity. This stereotype is unfair, as there are many reasons why users might want to make purchases with an anonymous currency, but as long as it persists, Monero will have difficulty gaining acceptance in the wider world economy.
14. Can I make money with Monero? Like all investments, it is possible to make money if you are careful and do your research. As the only truly anonymous cryptocurrency in circulation, Monero has retained its value in the face of competition from other cryptocurrencies. As with all investments, this could change in the future, so always do your homework before you begin spending money.
15. Is Monero truly anonymous? While no computer system or online interaction is ever 100 percent anonymous, Monero’s anonymity features make identifying users on its blockchain next to impossible. As such, Monero can be regarded as anonymous, making it ideal if you want to conduct transactions without being tracked. However, even if individual Monero transactions cannot be tracked, if you are careless with personal security, all the anonymity protections built into Monero won’t protect you. Always safeguard your wallet information and make sure that your passwords for Monero-enabled exchanges and other platforms are hard to guess. By practicing basic security protocols, you can ensure that your transactions and money remain safe.
16. Is it legal to use Monero? Yes. Despite its reputation as a black market cryptocurrency, Monero is perfectly legal to use, though some countries have passed laws regulating the use of cryptocurrencies in general.
17. Can I use Monero for illegal transactions? Because of Monero’s anonymity, many individuals choose to use it to purchase drugs, weapons, and other illegal goods via dark web merchants. This is because it is nearly impossible to track Monero transactions with existing technology. Having said this, engaging in illegal activity is always risky and wrong, no matter how you do it. While we cannot control how you use Monero, we cannot advocate that you use it for illegal activity.
18. Can Monero be mined? Yes, and Monero is much easier to mine than other cryptocurrencies. This is because Monero’s proof-of-work algorithm is designed to work inefficiently on ASIC hardware, dedicated mining hardware that is used to mine Bitcoin and other cryptocurrencies. This means that Monero must primarily be mined using consumer-grade hardware. Modern CPUs and GPUs are the best ways to mine Monero; if you own a reasonably modern computer, you can likely use it to mine Monero in your spare time. Keep in mind that mining cryptocurrency is taxing on your computer, causing increased heat output; if your computer is inadequately ventilated, you could cause permanent damage to its internal hardware through Monero mining. Additionally, mining takes advantage of unused CPU or GPU cycles, meaning that it will naturally slow down when you are using the computer. Finally, mining Monero or any other cryptocurrency will increase your computer’s electricity usage, which will increase your electric bill. Depending on how much electricity costs where you live, mining Monero may not be worth the higher power costs, so check your local power supplier to see if the investment is worth it.
20. Where does Monero’s value come from? Monero derives its value from the same place all currencies do: its utility. Countless users rely on Monero to perform transactions all around the world, and Monero’s anonymity has allowed it to carve out a position for itself in the cryptocurrency ecosystem. While there’s no way to predict the future, Monero has established a strong track record over the course of its life, and it has proven itself to be a worthwhile means of storing and exchanging value among consumers and individuals.
21. How is the price of Monero determined? Like any commodity, Monero’s price is determined by supply and demand. Similar to Bitcoin, Monero is relatively limited in supply, meaning that the price frequently fluctuates.
Monero is easily one of the most important cryptocurrencies available today due to its rising popularity and original architecture.
In a world in which users are increasingly paranoid about their online security, Monero provides total privacy to its users, allowing people to conduct transactions without worrying about others spying on them. Monero has continuously added to its security features over the years, allowing it to stay one step ahead of attempts by hackers to crack its code.
While Monero originally had a shady reputation due to its popularity among black market vendors, its privacy and ease of use have made it increasingly popular among the general population. Due to Bitcoin’s increasingly high fees and lengthy transaction times, Monero is rapidly gaining traction as an alternative currency among vendors and merchants.
Monero’s privacy features set it apart from virtually every other cryptocurrency available today and make it a must-have investment for any crypto trader. Its resiliency in the face of a potential market crash makes it one of the top cryptocurrencies available, and its anonymity will further boost its popularity in an era where online privacy is increasingly under siege.
Cryptocurrencies6 months ago
Ethereum, the platform for decentralized apps
Cryptocurrencies6 months ago
Ripple, the blockchain for banks
Cryptocurrencies2 months ago
Cardano, a top smart contract cryptocurrency
Cryptocurrencies6 months ago
Bitcoin, the original blockchain
Cryptocurrencies3 months ago
Stellar, the protocol for the future of money
Cryptocurrencies5 months ago
Monero, the blockchain of anonymity
Cryptocurrencies6 months ago
Bitcoin Cash, the hard fork of Bitcoin
Cryptocurrencies6 months ago
Litecoin, the faster bitcoin