Is Monero a Good Investment? Things to Know Before Buying XMR

By | June 23, 2022

The crypto markets are clad with coins that have different use cases. Bitcoin, for example, is considered to be a great store-of-value asset that is resistant to bear markets. Tron, on the other hand, provides the world with a decentralized supercomputer for deploying open-source applications. As such, comparing TRX vs BTC can be an interesting argument depending on the type of investment you are looking for.

Monero is a crypto coin that addresses the privacy issues of other blockchains. Privacy is an underrated concept, especially regarding payments and investments. Not everyone wants their dealings exposed to criminals, or in the case of businesses, to the competition.

In this article, we analyze the fundamentals of the XMR coin and the technology that makes its private transactions possible. We explore its unique features and provide reasons why you might want to consider investing in this crypto asset.

Understanding Monero

Monero is one of the pioneers in the market, as it was released to the public in 2014, nearly a decade ago. Over the years, it has conserved a comfortable spot in the top 50 cryptocurrencies by market cap.

This is mainly because of its unique feature to render all transactions on its network completely untraceable. Many think Bitcoin is an anonymous cryptocurrency. This is a misconception, as BTC is pseudonymous, and all transaction data is entirely transparent. It doesn’t take long for hackers or governments to trace back BTC transactions to their source.

This is where Monero comes into play. The digital ledger of the Monero network is completely opaque. This means that, to an external observer, XMR transactions have no relevant data regarding their sender and receiver, nor the amount that has been sent.

This is in contrast to all other cryptos that publicly broadcast every transaction, together with all the data. While this transparency is almost always welcome, some users wish to hide this information.

What Is Unique About XMR?

The Monero network uses ring signatures to obscure the transaction data. This means that it takes multiple transactions from multiple users, past and present, and mixes this data to render the end result completely untraceable.

The protocol creates stealth addresses that act as cover-ups for the sender’s and receiver’s addresses. Consequently, external observers are unable to distinguish who signed the transaction and where it was sent. What’s more, these features are activated by default, meaning that privacy is conserved at all times.

It’s worth noting that Monero is a mineable cryptocurrency that uses the proof-of-work consensus. The algorithm is ASIC-resistant, which allows for more democratic and decentralized mining that doesn’t favor huge mining farms.

Finally, we can state that Monero retains high popularity as a payment currency. However, for those that require faster transactions, you can also swap XMR to NANO for lower fees and instant payments.

Should I Invest in Monero?

Monero has shown some great resilience to the ups and downs of the crypto markets over the years. It has managed to remain quite high in the crypto rankings and has conserved much of its value, even during market downfalls.

While it remains certain that Monero will not disappear in the near future, you should understand that, like any cryptocurrency, it’s a risky investment. In recent history, the coin’s price skyrocketed from $35 in 2020 to $475 in 2021. For long-term holders, this was a great time to bank some profits.

Conversely, the price has since fallen to around $160 per XMR coin, proving that even pioneering coins still experience high volatility. With that being said, Monero is still gaining popularity. Its privacy features become increasingly sought-after as more regulation rumors in the crypto space come out to the surface.

What Else to Consider Before Buying Monero?

XMR is appreciated as both an investment vehicle and payment cryptocurrency. It has been in the markets long enough to prove that it provides value to its users.

One thing that you need to consider is that many view it as a black market coin due to its privacy features. It has often been adopted by criminals and drug traffickers to exchange value without the possibility of being detected. As such, government agencies aren’t too fond of Monero.

This doesn’t change the fact that this crypto has considerable upside potential and staying power in the markets.

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About Joanna Tan

Joanna Tan is the Senior Editor at VOIVO Infotech. She looks after the editing work of the blog. She has previously worked in National Newspaper in Abu Dhabi. She has worked with various popular agencies globally. To get in touch with Joanna for news reports you can email her on [email protected] or reach her out on social media links given below.