What is Monero and How Are Cryptocurrencies Mined?

What is Monero and How Are Cryptocurrencies Mined?

Cryptocurrencies use blockchain-based operating systems to provide their services. A blockchain is a ledger that records information related to cryptocurrency transactions. Chances are, if you’re a frequent internet user then you already know about cryptocurrencies like Monero and the most popular, Bitcoin, due to the surge in prices in 2017. Trading in cryptocurrencies can definitely be an extremely lucrative investment, and there are plenty of self-made cryto-millionaires to prove it.

However, this investment isn’t without its risks. In fact, cryptocurrencies are actually the riskiest possible investment to make currently. This is partly due to the fact that there isn’t any reliable way to predict which ones will be successful. Their prices are volatile in nature, and it’s basically a guessing game to choose a winner.

Their lack of regulation must be factored in, too. So far, no world government has adopted cryptocurrencies because of concerns for their potential for criminal exploitation. In a worst case scenario for investors, cryptocurrencies may not even be legal in future years.

Monero wallet
Image Credit: Monero.how

What is Monero?

Monero is a cryptocurrency that stands out from the rest of the market due to its in-depth privacy features. Anyone can send transactions with Monero, but no one can determine the source or destination. Additionally, in an extremely unusual move, Monero makes it impossible to view individual account balances. These features make Monero particularly attractive to investors who place a high value on their personal information.

Unfortunately, these privacy features help justify concerns about cryptocurrency in general. In 2016, it was discovered that Monero was being used for black market transactions. While these transactions were rooted out and done away with, it shows why governments are wary of implementing crypto fully.

What does “mining” mean?

Mining in cryptocurrency is a difficult concept to explain. It can be somewhat oversimplified as a method of finding coins, and it requires complex software. Mining software essentially examines individual blocks in the blockchain, which function sort of like complex puzzles, and ensure that the transactions within are legitimate. Typically, each block is examined by multiple miners, and coins are distributed fairly to each miner once the process is completed. This piece compares blockchain technology to Google docs as a shared ledger multiple parties can see and interact with.

The purpose of miners is to basically keep blockchain networks going and increasing the supply of coins. Without miners, the entire system falls apart. There are plenty of reasons to look into it from simply being a hobby, to believing in the team behind a certain coin’s platform. For example, some of these believe in and are trying to create a completely decentralized internet that would give control of content flow to users rather than corporations.

Surviving the 2018 crash

While cryptocurrencies saw a surge in activity and value in 2017, all has not been well this year. In fact, there has been a general crash in cryptocurrencies across the board. The reasons for this could be anything, from a general perceived lack of security, to bad press caused by decreased values or illegal transactions. It’s also not helped that social media outlets generally ban ads for coins, so it could partially be caused by a simple lack of information.

Some cryptocurrencies are recovering better than others, and Monero is one of them. As of now, the price of Monero sits at $106.10. That’s a 1.39% increase in the last 24 hours at the time of writing. It will be interesting to see what sort of role Monero and other cryptocurrencies play, as we transition into an even more ever-present internet.

Cover photo credit: descryptive.com/

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