SteemitCryptoAcademy week 8-Homework Post For Professor (@levycore)|| privacy Coins (Monero)

Thank you @levycore for this great lecture

Choose a Privacy Coin and do a detailed fundamental analysis of the coin.

Privacy coins are a set of cryptocurrencies that support transactions made in private blockchains by hiding their destination and origin. What happens is that the user’s wallet balance, address, and transactions are obscured. Unlike Bitcoin and other non-private blockchains, this blockchain in question makes it difficult for any random person to view their transactions either withdrawals or deposits. There are two main features of private coins;

• Anonymity
• Untraceability

Anonymity: this is hiding the identity of the person behind a transaction

Untraceability: this makes it impossible for third parties to know the transactions done in the blockchain.

List of privacy coins

There are a good number of private coins and they are as follows:
Dash
Monero
Zcash
Beam
Grin

My choice Private coin

Source

MONERO is my choicest private coin. It is a private coin released in 2014 by Nicolas van Saberhagen. It is an open-source protocol that uses CryptoNote as its white paper. Anyone can send or broadcast transactions because it uses a public ledger but the beautiful thing about it is that no outsider can know the source, amount, or even more details about the transactions. It uses a proof of work mechanism with the hash function RandomX to issue new coins and validate transactions. Monero is actually decentralized, fungible, and anonymous and does this using privacy-enhancing technologies. Since its creation, it has been used by people holding other cryptocurrencies such as Bitcoin to break the link between transactions and other coins first converted to Monero.

Fundamental Analysis of Monero

The people behind Monero are a 9-man team although it is speculated to have over 200 people collaborating on the project together with Bitcoin’s founder -Satoshi Nakamoto. The team has the best engineers and researchers in the world of cryptocurrencies, among them: It also has a team of amazing researchers and engineers and amongst them are; Snipa, Selsta, BynaryFate, Xiphon, Riccardo Fluffypony Spagni, Luigi 1111, Justin Ehrenhofer, Pigeons, and Rehrar.

In January 2021, Monero was trading for about $155.94 with a market cap of $2.788 billion but at the time of writing this post, it now trades for $288.99 and has a market capitalization of $5.1 billion. it is ranked #26 in the market and has a market dominance of 0.31%. Monero block time is 2 minutes with a block reward of 4.99 XMR which is 24 seconds per XMR. It has a trading volume of $402,009,695.86 per 24hours.

This private coin was created with the good purpose of concealing the user’s identity hence its name and it achieves this using various technologies such as

• Stealth addresses which are used to protect the recipient’s privacy
• Ring signature which is used to protect the sender’s privacy
• Ring Confidential Transactions which hide the amount of transaction made

There is a misconception about this private coin as it is opined that it is used for illegal purposes since it is almost impossible to track who uses the cryptocurrency and the destination. It is built on three ideals which are security, privacy, and decentralization. Monero ensures a high level of security for both users and their assets. There is total protection of everything and it is not run by anyone and its development is community-based.

Explain the steps in creating a wallet for the Privacy Coin of your choice. (Screenshots required)

Firstly, I opened the Monero official site to download the software on my PC link.
On the site, I downloaded a suitable Monero software; GUI for my PC.

I begin downloading the wallet and then click on finish

The wallet has successfully been downloaded and installed on my PC as shown on the desktop page

I open the Monero software and I get a display and simply click on continue

A new page will open, select "simple mode" and you will be required to read the privacy terms and then proceed by ticking the box provided and clicking on Next

On the next page, click on 'Create a new wallet'

On the create a new wallet page, input your desired wallet name, save your mnemonic seed and your wallet restore height. Thereafter, you click the 'Next' button

Create and input a strong alphanumeric password, ensure to remember it as it can not be restored. after that, click on 'Next' to continue

On the next page, click on 'create wallet'

To begin using your wallet, you will be required to input that your password which you just created and then click 'Ok'

And your wallet is all set up for use.

Provide an explanation for the reason you chose the Privacy Coin. (Mention the advantages and disadvantages)

There is an array of privacy coins but I chose Monero because of all it stands for and its popularity. After going through the professor’s lecture, I felt it was the best coin to choose.

Advantages of Monero

• Good mining algorithm
  Mining Monero is quite easy and cost-efficient. It doesn’t necessarily require special mining equipment and just anyone can download a Monero wallet and begin mining using their mobile devices.

• Adaptive block size limit
  Blocks in Monero have produced an average of two minutes which is advantageous, unlike Bitcoin that takes about 10minutes. The block size limit is very flexible and there will always be room to handle the increasing number of transactions in the future without unnecessary delays and this will be achieved by expanding the size of the blocks to accommodate transaction volumes.

• Solid team
  There is a solid team behind the success of Monero and research has it that there are over 180 contributors to this project.

• Decentralization
  Monero is highly decentralized, doesn’t have anyone running it and there are no intermediaries.

• Privacy
  This is a highly private coin. The identity of both the recipient and sender is adequately hidden together with the transaction amounts. It is reliable and secure.

Disadvantages of Monero

• Difficult to use
  There isn’t a lot of wallets that is developed for Monero and it is hard to develop applications that work with the blockchain.

• Theft
  Due to it being untraceable, it can be used for so many illegal transactions which gives a bad reputation to the blockchain. It can also be hacked and used by cybercriminals to make the computers of other users mine coins for them.

Conclusion.

Everyone loves privacy and that is what gives private coins especially Monero an edge over other cryptocurrencies. Investments and transactions are preferred to be kept discreet. Monero is really an amazing cryptocurrency especially for the values it stands for which are privacy, security, and decentralization. Assets are safe and the blockchain isn’t run by anyone. A loophole that should be looked at is tightening up its security systems which will make it difficult or almost impossible for cybercriminals to steal or use the blockchain for illegal acts. With these, it is going to grow fast and will become one of the most appealing cryptocurrencies for people who love anonymity, independence, and freedom.

cc: @levycore