What is Monero? A step-by-step guide to XMR

If you’re looking for a secure, anonymous and untraceable currency, you should consider whether Monero has you covered.

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Monero (XMR) appears to have become synonymous with anonymity and secure transactions. While many people believe that bitcoin is already anonymous, this is definitely not the case as we’ll see in this guide. The anonymous nature of bitcoin is very much up for debate and Monero is the natural outcome of that debate.

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Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.

What is Monero?

IconSymbolInitial release dateAlgorithm typeMax. supply
XMRApril 2014CryptoNight18.4 million XMR

Rising from a need identified by developers to make a more secure, anonymous and untraceable cryptocurrency, Monero was released in April 2014. It presents itself as standing for three core values:

  • Security. Without trust, no cryptocurrency can survive and none of them are more reliant on that trust than Monero, whose users not only trust it with their money, but also with keeping their transactions anonymous.
  • Privacy. Monero claims that they need to be able to protect their users’ anonymity, even in a court of law – including, as their website states “in extreme cases, from the death penalty”.
  • Decentralization. Monero isn’t run by anyone. It’s unlike some other coins where there’s a central agency that runs the network, or blockchain. In the case of Monero, not only does this central, controlling agency or business not exist, but the development decisions and the developer meeting logs are published and available online for anyone to see.

How is Monero different from bitcoin?

Monero focuses on anonymity, and this is where it diverges significantly from bitcoin. Many believe that bitcoin already is anonymous, but that’s just a very common misconception, as we’ll see.

The problem with public transactions

Bitcoin is built over what is known as the public ledger, or blockchain. This was done so that users of bitcoin can verify other people’s transactions, especially in cases where these payments need to be transparent (eg, government spending and not-for-profit organizations (NPOs).

The issue is that once you share your bitcoin address, all past and future transactions and how much money you’re sending/receiving will always be linked with you. Buyers may not always find this desirable. It’s not only an issue of revealing that users may be purchasing or paying for illegal services/products. You just might not want your employer to know that you sent money to WikiLeaks, or maybe you don’t want to have freelance clients know how much you’re charging other clients.

Bitcoin’s solution

Bitcoin did come up with somewhat of a temporary solution or a user guideline, so to speak. The idea is that whenever you’re requesting money from someone, you should always provide them with a temporary wallet address. This address is related to your actual wallet, but would be a one-time-use address and then will be destroyed, making it harder to trace your wallet’s main address back to you. This solves the problem for one-off payments, but organizations and businesses who want a public address visible on their website, for example, would still have all of their transactions traceable back to them.

Monero presents a solution to this problem by using what is known as Ring Signatures and Stealth Addresses.

Ring Signatures

Monero mixes addresses for a user’s transactions with another user’s addresses making the path between the sender and receiver virtually untraceable. Analysis of the Monero blockchain would reveal nothing more than a cryptographic hash of the transaction.

Stealth Addresses

Similar to the explanation of bitcoin’s suggested solution, Monero hides addresses behind one-time-use ones, which are then destroyed so that the transaction cannot be traced back to a public address.

Today’s Monero price

Updated: 30 Mar 2020 20:55:47 UTC

Where can I use Monero?

Many of the merchants that currently accept bitcoin and the other more common cryptocurrencies already accept Monero.

How do I buy Monero?

Here’s a list of exchanges for you to consider:

Name Product Deposit methods Fiat Currencies Cryptocurrencies
Electronic Funds Transfer
Bank transfer (SEPA)
Wire transfer
Ethana Custody


Buy, sell and trade a range of digital currencies on this high-liquidity exchange – suitable for beginners right through to advanced traders.

UK residents: In addition to normal crypto trading, Kraken offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.


Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support.

US residents: As of September 2019, US-based users can only trade USD on the American dollar onramp of Binance, Binance.US.
UK residents: In addition to normal crypto trading services, Binance offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.
Credit card


CoinSwitch allows you to compare and convert over 250 cryptocurrencies across all exchanges.
Credit card
Debit card


Access competitive crypto-to-crypto exchange rates for more than 35 cryptocurrencies on this global exchange.


Cryptocurrencies are a highly volatile investment product. Your capital is at risk.
Spot trade all of the major cryptos on this full-featured exchange and margin trading platform.


Browse a variety of coin offerings in one of the largest multi-cryptocurrency exchanges and pay in cryptocurrency.
Express Polish Post Office 24/7
Wire transfer
GBP bank transfers


This Polish-based exchange offers a variety of accessible payment methods, including Express Polish Post Office 24/7 service and Express DotPay.


Buy and trade 100+ cryptocurrencies on this global cryptocurrency exchange.
ezBtc Cryptocurrency Exchange
Electronic Funds Transfer
Interac e-Transfer
Wire transfer


This Canadian exchange offers a wide range of payment options for buying and selling bitcoin at competitive rates.
Indacoin Cryptocurrency Exchange
Credit card
Debit card


Use your credit or debit card to buy bitcoin and other cryptocurrency without having to verify your identity.
Huobi Cryptocurrency Exchange


Huobi is a digital currency exchange that allows its users to trade more than 190 cryptocurrency pairs.
Bithumb Cryptocurrency Exchange
Wire transfer


A global platform where users can make KRW and cryptocurrency deposits to purchase up to 15 popular cryptocurrencies.
Bittrex Digital Currency Exchange
Wire transfer


Buy from one of the largest cryptocurrency exchanges with a selection of over 190+ cryptocurrencies and 3 USD pairings.
Poloniex Digital Asset Exchange
Credit card
Bank Wire


Trade various coins through a global crypto to crypto exchange based in the US.
Bitit Cryptocurrency Marketplace
Credit card
Debit card
Bank transfer (SEPA)
EUR, USD, JPY, DKK, GBP, SEK, NOK, TRY & 5+ more


Buy cryptocurrency with cash or credit card and get express delivery in as little as 10 minutes.
ShapeShift Cryptocurrency Exchange


Quickly swap between more than 40 cryptocurrency assets or use your credit card to instantly buy bitcoin.

Compare up to 4 providers

Using Monero to transfer money

Sending and receiving money with Monero is very similar to other coins, although XMR transactions are thought to be more secure. Here’s how installing a wallet and receiving money works:

  • Start with an XMR wallet. Some wallets let you have multiple different currencies stored in them. When working with XMR, you should ideally get the official wallet to avoid any conflicts and leakages of anonymity.
  • Store the seed. During the process of installing the wallet, you’ll get a 25-word mnemonic word seed. It’s imperative that you keep these words secret and safe. If your computer ever breaks down, they will be your only method of getting back your XMR.
  • Get your address. Your wallet will give you a Monero address. This is the address you will use to receive money. Share this address with your sender and they will send you money. While this address will always technically remain the same, on the Monero blockchain this address will be hashed and obfuscated and only you and the sender will know the actual address.

Can I make money with Monero?

The possibility of making money with Monero is very similar to the options for making money with other currencies. After all, the main difference is Monero’s focus on security and anonymity. Everything else is very much the same as other coins, such as bitcoin. As with any cryptocurrency, you need to consider the options carefully and make a wise decision.

Transactions in XMR

The best way to make money from a cryptocurrency is to buy it, provided you are satisfied that it’s the best plan for you. Buying XMR and paying in XMR should help the currency grow, and when the currency grows, your wallet should also increase in size.

How your wallet grows with the coin’s value

If you’re investing in cryptocurrencies in order to make money and little else, then understanding the way currency trading works (including things like FOREX) is imperative.

Say that 90 days ago you wrote an article for a business and they decided to pay you in Monero (XMR). 90 days ago, 1 XMR cost US$55.30. You wanted to get paid US$60 for your article, so you charged the business 1.08499 XMR. This amount goes into your wallet and you move on.

90 days later, today, you decide to withdraw that money from your wallet. But today, 1 XMR costs US$121.17. This means that your wallet now has a value of US$131.47 instead of US$60.

Congratulations! You just bought cryptocurrencies and more than doubled your money!

Be aware, though, that XMR can go down as well as up and caution is recommended.

What to watch out for

No cryptocurrency is without its concerns, and Monero is no different.

  • Mining Centralization
    Mining is currently controlled by four large pools. While no particular pool controls more than 20% of the entire hash rate, this is still a problem as decentralization is of utmost importance. Luckily, the Monero development team has stated that this is as important to them as to Monero users. Since a hack on a blockchain requires convincing 51% or more of the users that your data is the correct one, with only four pools you would only need to hack three mining pools to control 60% of the blockchain, at which point you control the entire blockchain.
  • Large Transactions
    Since Monero has to add overhead to every transaction to make sure they’re anonymous and secure, the system is quite noticeably slower and the transactions are larger and consume more space on a user’s computer.

What’s next for Monero?

Monero should be watched for its growth potential and whether the developers are placing a focus on decentralization and security.

We are told that in the works is a bigger effort to push adoption by merchants – especially in certain areas of the world where adoption has been slow – and a better platform for developers to build upon.

Frequently asked questions

Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Image sources: Shutterstock, CoinMarketCap

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