- what is the difference between monero and bitcoin?
- lost bitcoin
- should I use monero or bitcoin?
- impact on value
- xmr vs btc: do criminals use monero?
- pros and cons
monero vs bitcoin – what is the difference?
well, bitcoin (btc) is the cryptocurrency that started it all, way back in 2009. btc has a fixed supply of 21 million tokens, and these coins are gradually being released through bitcoin mining.
Reading: Monero vs bitcoin
Although BTC is the undisputed champion when it comes to overall market capitalization and trading volume, Monero (XMR) offers something unique as it is a privacy coin: a cryptocurrency that hides data about its users.
what is the difference between monero and bitcoin?
Contrary to popular belief, bitcoin transactions are not anonymous. these payments are fully traceable on the public blockchain; in fact, it’s even possible to keep tabs on stolen btc, as we’ve seen after a number of high-profile hacks over the years.
What distinguishes the blockchains from monero and bitcoin is the cryptography that is used when transactions are executed. monero (xmr) uses a technology known as ring signatures to ensure that the senders and recipients of a cryptographic payment cannot be identified.
The premise behind ring signatures is simpler than you might think. the person responsible for authorizing a transaction is included in a group that contains people who have authorized transactions in the past. this creates decoys that make it difficult for outside observers to determine where a payment is coming from.
In recent years, the number of ring signatures used by Monero has increased, substantially increasing the level of anonymity users can expect.
When it comes to monero vs bitcoin, there are other key differences regarding their tokenomics.
btc currently has a circulating supply of around 19.11 million coins, although it is feared that a sizeable portion of these may be lost forever. some btc holders have lost the keys to their wallets, while an unlucky man in wales accidentally left thousands on a hard drive that ended up in landfill.
that means about 1.89 million remain to be discovered in the next 120 years or so. in other words, around 9% of the total supply is yet to be exploited.
compare this to monero: there are over 18.1 million tokens in circulation and it has reached its full supply, but logistically it does not have a maximum supply. As of June 2022, block rewards have been fixed at 0.6 xmr per block, and as per new software rules, new block rewards will never drop to zero. this is also known as “queue broadcast”.
however, because the xmr supply is known, users can prove ownership of their coins and secure value.
should i use monero or bitcoin?
When it comes to using monero vs bitcoin, and which would be better for you personally, a lot will depend on your personal circumstances.
You may value xmr because it gives you privacy when completing transactions, the kind of anonymity often seen with cash. this does not necessarily suggest that you are buying something illegal; it may simply be that you are concerned that your activities are being monitored.
However, it’s fair to say that the existence of monero creates some pretty tricky problems when it comes to regulation. Countries around the world have raised concerns that XMR could be used to finance terrorism, launder money, or evade taxes. the decentralized nature of monero means that it can be difficult to uncover these illicit transactions.
In 2020, the United States Internal Revenue Service (IRS) announced that it would offer a $625,000 reward to anyone with the means to crack the XMR code. The contracts were awarded to cryptocurrency chainalysis and integra fec forensic data analysts.
impact on value
If these companies are able to develop solutions to break the privacy of monero transactions, it could have a substantial impact in the xmr vs btc battle.
Any evidence that the monero crypto is not as effective as once thought could affect the overall value of this privacy coin, causing its value to drop. We’ve already seen how much of an impact regulatory activity can have on an altcoin’s value, with XRP falling over 50% after the US Securities and Exchange Commission. uu. (sec) announced that it was filing a lawsuit against ripple.
But there is another problem when comparing xmr vs btc: its availability on cryptocurrency exchanges. Concerned about regulatory compliance, many trading platforms do not offer Monero to their clients. As a result, most major clients will only be able to invest in bitcoin.
kraken phased out monero for UK customers in November 2021, so the coin could face availability issues in the future, depending on how regulation evolves with the market.
xmr vs btc: is monero used by criminals?
A common question when it comes to Monero is whether criminals regularly use this privacy coin to fuel their illicit activity.
In 2021, research from chainalysis suggested that btc remains the cryptocurrency of choice for criminals, primarily because it is easier to use. however, there has been a marked increase in the number of darknet marketplaces (commercial websites on the dark web, operating as a black market) that accept xmr. this has been a concern for governments.
Unfortunately, the emergence of “blended services” for bitcoin, which combine tainted crypto with clean assets, has meant that many criminals still have a way to cover their tracks. The IRS has also expressed interest in addressing this trend.
advantages and disadvantages
Beyond the old privacy debate, there are other pros and cons associated with these two digital assets.
Typically, transactions on the xmr blockchain can take up to 20 minutes, meaning this altcoin isn’t really practical as a means of payment. the bitcoin block chain averages about 10 minutes. while this is still much slower than more conventional alternatives such as visa and mastercard, it does represent a considerable improvement on the monero blockchain.
One way xmr redeems itself is through transaction fees, which are substantially cheaper than those of the world’s largest cryptocurrency. In general, monero can be sent for a couple of cents, while, depending on congestion levels, sending bitcoin can cost 20 times as much.
And to get back to the privacy issue, let’s focus on fungibility. this basically means that you cannot trace how an asset has been used in the past. xmr is fungible because these funds lack a trail, while each btc has a unique identifier which means its journey can be traced back to the inception of the coin.