What Is Monero (XMR) Coin? How to Buy Monero With Bitcoin or Cash?
Monero (symbol XMR) has already been moving upwards for quite some time. Some of us have made a lucrative profit from Monero, whilst many of us are still wondering why the price outpacing actual growth. What is Monero coin? Is it worth buying and investing in Monero as part of your cryptocurrency investment portfolio? My quick answer is yes but never invest money you can’t afford to lose. If you are wondering how to buy Monero from exchanges like Poloniex or Kraken, read on and find out.
Although Bitcoin and Ethereum have both been performing extraordinarily well, there is this a lesser-known digital currency that was quietly created by an anonymous developer on a message board in 2014 was the best performing digital currency in the world at the time of writing. That digital currency is Monero.
What Is Monero (XMR)?
Monero is an innovative cryptocurrency that solves privacy and fungibility issues that persist in the dominant cryptocurrency, Bitcoin. Monero is basically an improvement on Bitcoin’s core principles of decentralization and anonymity. It solves them by automatically mixing transactions with previous transactions and does this by implementing ring signatures.
It is an open-source pure proof-of-work cryptocurrency created on 18th April 2014 that mainly focuses on privacy, decentralization, and scalability.
The source of that explosive growth seems to be Monero’s unique privacy properties that go well beyond the decentralization that makes Bitcoin so resistant to control by governments and banks.
You may think it is just another Bitcoin derivations. However, Monero has its own entity. Monero has the technical capability to provide the same or similar functionalities to those which are Bitcoin provides by virtue of its core design purpose.
Contrary to the mainstream media portrayal of Bitcoin, the Bitcoin blockchain does not offer strong privacy protection for people who don’t want their transactions known to the world. Here’s why Monero is more superior than Bitcoin.
Monero uses a technique called “stealth addresses” to generate addresses for receiving Monero that are essentially encrypted. In other words, there is an absolute privacy of both sender and, receiver. Not only that, the amount for each transaction anonymous too. The blockchain is opaque, and by default every transaction is private which ensures that opaqueness.
Just think about it, complete privacy makes it realistic digital cash. Coins don’t have a history, you can’t know how much money your neighbor/competitor has and so on. Right?
That simply means you are your own bank, you control and are responsible for your funds, and nobody can trace your transfers.
One of the most interesting aspects of Monero is that the project has gained traction without a crowd sale pre-launch, without VC funding and any company or well-known investors and without a pre-mine. Like Bitcoin in the early days, Monero has been a purely grassroots movement that was bootstrapped by the creator and adopted organically without any institutional buy-in.
What Are the Advantages of Monero?
#1 It satisfies the 3 important properties of electronic cash: decentralized, private, digital.
#2 Monero is able to make transactions untraceable is through a technology called ring signatures, was created to mask the source of funds so that the specific signers of transactions can’t be specified.
#3 It’s auditable. By giving your private view key to an auditor, he would be able to see all your incoming transactions.
#4 Dynamic fees. The fees are dynamically adjusted to scale with the network.
#5 Monero has a strong core developer team of seven people, five of which are pseudonymous and two are known to the public — Riccardo Spagni and Francisco Cabañas along with many contributors.
#6 Separation of the wallet and node software, which makes it a much better foundation to build upon.
#7 CryptoNight PoW, which is an ASIC-resistant algorithm and to this day no known ASICs exist.
#8 Monero client has the ability to export the key images for each of the received outputs, which allows, in conjunction with the view key, to determine if those outputs were ever spent.
#9 Most cryptocurrencies are derived from the Bitcoin codebase and thus have a “block size limit.” Monero doesn’t suffer from this block size debate, because it has a dynamic block size limit.
#10 Monero transaction outputs have “plausible deniability” about their state: you can’t tell if they are spent or unspent in a certain transaction or not. This leads to an opaque (non-transparent) blockchain making all coins “equal.” fungibility is built into Monero at protocol level, making it real “digital cash.”
Where Could Monero Go? Any Real Potential?
Apart from anonymizing payments, another key feature of Monero is that it is the only cryptocurrency to be on StackExchange apart from Bitcoin and Ethereum. This will boost the already strong public source code repository, indicating Monero has a good chance of continuing to innovate and serve the cryptocurrency market. With relatively high interest and effort from the developer community, it is expected that Monero to be a good long-term investment.
Let’s have a look at the long-term time frame of Monero price. Even though the price of Monero has already appreciated significantly in 2017, there is still significant upside from current levels.
Cryptocurrencies, like social networks, have extremely strong network effects. As the adoption of Monero continues to grow, its utility and value will grow exponentially.
There will likely be some growing pains along the way, but Monero has a great development team.
Its privacy is the key to the growth. Scams aside, it seems likely that Monero will “bottom out” in the near or medium term, especially in consideration of these price-supportive factors:
- the current excitement over Monero’s acceptance as “legal” tender on the Darknet. Despite the scam, the precedent for markets acceptance has been made.
- the coin’s acceptance by cryptocurrency traders, many of whom have taken to Monero as a coin to trade when Bitcoin markets are dull. Popularity as a trading instrument now represents a separate source of demand for XMR.
How to Buy Monero?
Users interested in purchasing Monero with USD on an exchange may visit Bitfinex.
There also exists the option to buy Monero directly with fiat currencies EUR, GBP, USD, CAD, and CNY at MoneroDirect.
Poloniex, Bittrex, and Bitsquare
If you would like to buy Monero through Poloniex, Bittrex, or Bitsquare follow their instructions for setting up an account and depositing funds. As cryptocurrency exchanges, Poloniex and Bittrex offer a different environment for acquiring Monero in that you must buy it by fulfilling other traders’ sell orders. This means that prices may vary, sometimes widely.
There are very few direct fiat gateways into Monero, for those who reside in countries that don’t have direct access to Monero. That means the vast majority of people who buy Monero did it with Bitcoin. Bitcoin is the first coin that most people buy so it’s hard for a different crypto to overtake the value.
STEP 1: BUY BITCOIN
Registration is pretty straightforward, requiring things like your name, email, and a verification of your identity (eg: pictures of your driver’s license, etc). Once your account is created and verified, you’ll need to add a funding source like a bank account and/or a debit card. Once this is set up, you can buy some Bitcoin.
The reason I encourage my readers to buy BTC from Coinbase because you will get $10 free BTC once you trade your first $100 through Coinbase.
STEP 2: Set Up the Trade on Shapeshift
Exchanges of Bitcoin and Monero can be done through Shapeshift. Their service is super simple; you don’t even need to register on their website. You just send them some Bitcoin and they send you back some Monero. Unfortunately Shapeshift charges really high fees, which is fine for something like a $5 test purchase, since losing 7% to fees isn’t a big deal when it means losing 40 cents.
To do this, you will first need a 95-character Monero address, so that Shapeshift can send the Monero back to you. For test purchases, a web wallet at MyMonero.com works great. Alternatively, you can open an account on Poloniex.
Then go to Poloniex “Balances, Deposits & Withdrawals” from the “Account” button on the top right menu. Then click “Deposit” from XMR. Then you will see a string of characters will pop up and that’s your Monero Deposit Address. It looks like this:
Next, you’ll want your Bitcoin address from Coinbase, which can be found on your main account screen. In the upper right click on the link “Wallet address”. A string of characters will pop up like this.
That is the address you’ll need for Shapeshift. In case your trade has a problem, they will send the Bitcoin back to that address.
Next, you’ll go to ShapeShift.io and set it up for Bitcoin-to-Monero trades by clicking on the two big currency logos, and then click “Continue”.
Now Shapeshift will ask you for your Monero and Bitcoin addresses. Paste both of these into the boxes (ignore Payment Id) and click “I agree to the Terms”. When everything is ready, click “Start Transaction”.
STEP 3: Send Bitcoin to Shapeshift
With Shapeshift awaiting a deposit, go back to Coinbase. On the “Send Funds” page, paste the Shapeshift address into the “Recipient” box and type the amount of Bitcoin to send into the “Amount” box. Type the BTC amount into the box and click the blue “Send Funds” button. Click “Confirm” on the box that pops up, and your Bitcoin is officially sent to Shapeshift.
Finally, go back to your Shapeshift trade. Hopefully everything went smoothly, and the white “Deposit Received” has turned green with a checkmark, meaning Shapeshift got your funds. Eventually both “Exchange Complete” and “All Done!” should receive checkmarks too, which means Shapeshift has exchanged your Bitcoin and sent Monero to your wallet.
STEP 3 (Alternative): Send Bitcoin from Coinbase to Poloniex Exchange
there are some weaknesses with the Shapeshift process outline above, specifically that their exchange rate is pretty bad. Therefore, you can choose to send Bitcoin from Coinbase to Poloniex (the biggest exchange for Monero) directly.
Begin by creating an account at Poloniex, which basically just means giving them your name and email. They don’t touch government currency (unlike Coinbase, for example) so their registration process is much more relaxed.
Then go to Poloniex “Balances, Deposits & Withdrawals” from the “Account” button on the top right menu. Then click “Deposit” from BTC to get your BTC address.
Now paste the Bitcoin deposit address you got from Poloniex into the “Destination” box and type in the amount of Bitcoin you want to send.
Just one click and your funds should be on their way to Poloniex. It will take a bit of time, perhaps 15 minutes or more, for your Bitcoin transfer to complete.
Step 4: Trade Bitcoin for Monero on Poloniex
Now that your Poloniex account is set up and you’ve transferred some Bitcoin over, it’s time to actually get some Monero! To do this, go to Poloniex’s BTC-XMR exchange. Here you’ll be greeted with a historical graph of Monero’s changing price.
To trade your Bitcoin (BTC) for Monero (XMR):
- Click the underlined number next to “You have”. This will set your trade to include your entire Bitcoin balance.
- Click the underlined number next to “Lowest ask”. This will set your trade price to the lowest current seller.
- Click “Buy”.
You just exchanged Bitcoin for Monero. Be aware that there often isn’t much Monero for sale at the very lowest price, so you may need to repeat steps 1-3 a few times until all your Bitcoin is exchanged.