This year is considered the year of cryptos focused on privacy and anonymity of the coin holders. There are several anonymous coins and we’ve posted a small comparison of Monero vs Verge previously. Now we’d like to compare our favorite Monero vs Bitcoin, the Cryptocurrency King.
Privacy coins evolved essentially from the Bitcoin as the answer for public demand for the truly anonymous cryptocurrency. Let’s start with the definition of an ‘anonymous cryptocurrency':
Anonymous cryptocurrency is a privacy coin that inherits the basic blockchain features* and secures the identity of a coin holder.
*Basic blockchain features are:
– Decentralized network
– Immutability of data
– Participants must reach a consensus before any data is added to the blockchain
Why Bitcoin (BTC) isn’t anonymous?
Bitcoin transactions are broadcasted publicly on blockchain and contain some additional information about the sender and recipient. This way your ID can be revealed simply if you buy a product or a service with your bitcoins that has your personal data like IP address, email, anything similar that links directly to you.
Some advanced security techniques may hide your identity, but make just one mistake and that’s it – your wallet is compromised and previous transactions signed by your private key are connected to you. Thus said, Bitcoin (BTC) is a pseudonymous cryptocurrency.
What about the privacy of Monero?
Monero (XMR) transactions are stored publicly on blockchain as well, however, the sender address is hard to reveal. First, every wallet has the option called Stealth Address. It is a unique wallet address that can be used for each transaction you make.
Secondary, there is a built-in option called RingCT or Ring Confidential Transactions, a Monero analog of Bitcoin mixing services. Mixing = Signing transactions by a group of spontaneously chosen XMR owners with the same amount of coins. In result, a transaction is signed, but no one can tell who exactly did it.
The third privacy feature is the Kovri project, a special security layer protocol based on I2P’s features: garlic encryption and garlic routing. Works the same way as onion routing in the infamous Tor Browser.
“In an onion network, messages are encapsulated in layers of encryption, analogous to layers of an onion. The encrypted data is transmitted through a series of network nodes called onion routers, each of which “peels” away a single layer, uncovering the data’s next destination. When the final layer is decrypted, the message arrives at its destination. The sender remains anonymous because each intermediary knows only the location of the immediately preceding and following nodes.” – wikipedia.org [https://en.wikipedia.org/wiki/Onion_routing]
The Kovri project alpha release date is unknown. Still, you can observe the development process and even read developers meeting logs at the official Kovri’s project website.
XMR vs BTC: Exchange rates & Fees
Monero currently is the top 10 cryptocurrency based on total capitalization ($4,5 billion). XMR trading is available on 20+ exchanges, including major ones (Bitfinex, Poloniex, HitBTC, Bithumb).
On the other side, It’s hard to find at least one cryptocurrency exchange that doesn’t list BTC and his position on the market is indisputable, for the time being.
The price of XMR does not depend on any of the real assets (like Ripple, Tether or SONM, for example), so the price depends on the popularity of the currency. BTC does the same and its exchange rate depends on supply and demand.
Monero (XMR) current tx fee: $2
Bitcoin (BTC) current tx fee: $1.28
However, when the hype is strong fees grows exponentially.
Max. BTC tx fee: $55
Max. XMR tx fee: $20
These coins are different in their core missions. Bitcoin was adopted by masses because it was the first coin and its mission was to create a “Peer-to-Peer Electronic Cash System”. Monero was born on a different field as “the leading cryptocurrency with a focus on private and censorship-resistant transactions”.
In short, Bitcoin is the King and Monero is the Anonymous King. Do you agree? 😉